Delhi High Court
Luv Kumar Kaul Etc. Etc. vs Tosh Apartments Pvt. Ltd. And Ors. on 20 February, 2009
Author: A.K.Sikri
Unreportable
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO (OS) No. 400 of 2007
FAO (OS) No. 514 of 2007
and
FAO (OS) No. 324 of 2008
% Reserved on : November 18, 2008
Pronounced on : February 20, 2009
1. FAO (OS) No. 400/2007
Luv Kumar Kaul . . . Appellant
through : Mr. P.S. Patwalia, Sr. Advocate
with Mr. Amit Kumar, Mr. Ritesh
Ratnam and Mr. Sumesh C. Jha,
Advocates.
VERSUS
Tosh Apartments Pvt. Ltd. & Ors. . . . Respondents
through : Dr. A.M. Singhvi and
Mr. Sanjay Jain, Sr. Advocates
with Mr. Mahendra Rana and
Mr. M.S. Vinayak, Advocates
for the respondent No.1/Tosh.
Mr. Yakesh Anand with
Mr. Sanjeev Anand, Mr. Kajal
Chandra and Mr. Murari Kumar,
Advocates for respondent No.2.
Mr. Arjun Pant, Advocate
for the respondent No.3.
2. FAO (OS) No. 514/2007
M/s. Bhagwati Developers Pvt. Ltd. . . . Appellant
through : Mr. C. Mukund with
Mr. Shashank Sharma, Advocates.
VERSUS
Tosh Apartments Pvt. Ltd. & Ors. . . . Respondents
through : Dr. A.M. Singhvi and
Mr. Sanjay Jain, Sr. Advocates
with Mr. Mahendra Rana and
Mr. M.S. Vinayak, Advocates
FAO (OS) Nos. 400/07, 514/07 & 324/08 nsk Page 1 of 38
for the respondent No.1/Tosh.
Mr. Yakesh Anand with
Mr. Sanjeev Anand, Mr. Kajal
Chandra and Mr. Murari Kumar,
Advocates for respondent No.2.
Mr. Arjun Pant, Advocate
for the respondent No.3.
Mr. P.S. Patwalia, Sr. Advocate
with Mr. Amit Kumar, Mr. Ritesh
Ratnam and Mr. Sumesh C. Jha,
Advocates for respondent No.4.
3. FAO (OS) No. 324/2008
Vidur Impex & Traders Pvt. Ltd. . . . Appellant
through : Mr. Dushyant Dave with
Mr. Sandeep Sethi, Sr. Advocates
Mr. Ashok Jain and
Mr. Amit Kasera, Advocates
VERSUS
Tosh Apartments Pvt. Ltd. & Ors. . . . Respondents
through : Dr. A.M. Singhvi and
Mr. Sanjay Jain, Sr. Advocates
with Mr. Mahendra Rana and
Mr. M.S. Vinayak, Advocates
for the respondent No.1/Tosh.
Mr. Yakesh Anand with
Mr. Sanjeev Anand, Mr. Kajal
Chandra and Mr. Murari Kumar,
Advocates for respondent No.2.
Mr. Arjun Pant, Advocate
for the respondent No.3.
Mr. P.S. Patwalia, Sr. Advocate
with Mr. Amit Kumar, Mr. Ritesh
Ratnam and Mr. Sumesh C. Jha,
Advocates for respondent No.4.
Mr. C. Mukund with
Mr. Shashank Sharma, Advocates
FAO (OS) Nos. 400/07, 514/07 & 324/08 nsk Page 2 of 38
for the respondent No.5.
CORAM :-
THE HON‟BLE MR. JUSTICE A.K. SIKRI
THE HON‟BLE MR. JUSTICE MANMOHAN SINGH
1. Whether Reporters of Local newspapers may be allowed
to see the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the Digest?
A.K. SIKRI, J.
1. Against the order dated 3.9.2007 passed by the learned Single Judge,
these appeals have been preferred by different parties, though their
grievance is not the same. It is for this reason that these appeals were
heard together, which we are deciding by this common judgment.
2. Before we mention the applications in which the impugned order is
passed, it would be necessary to give the narration of the pleadings
in the main suit and the manner it has progressed in the last 15 years,
as the suit was filed way back in the year 1993.
3. M/s. Tosh Apartments Pvt. Ltd. (respondent No.1 in these appeals) is
the plaintiff in the original Suit No. 425/1993. It has filed this suit for
specific performance, damages and injunction. Specific performance
of Agreement to Sell dated 13.9.1988 between the plaintiff and Shri
Pradeep Khanna (defendant No.1 in the suit and since deceased) is
sought. Other two persons arrayed as defendants in the said suit are
Shri Arun Kumar Bhatia as the defendant No.2 and Shri Luv Kumar
Kaul as the defendant No.3. For the sake of clarify and to avoid any
confusion, we are maintaining the same nomenclature as appear in
the suit by describing the aforesaid parties as plaintiffs, defendant
No.1, defendant No.2 and defendant No.3 respectively. We may,
however, point out that the LRs of Shri Pradeep Khanna have been
brought on record and the expression defendant No.1 would include
reference to them as well.
4. As per the averments made in the plaint, vide aforesaid agreement
dated 13.9.1988, property bearing No. 21, Aurangzeb Road, New
Delhi, constructed on a plot of land measuring 0.91 acres, i.e. 4418
sq. yds., was agreed to be sold by the defendant No.1 to the plaintiff
for a total consideration of Rs.2.5 crores. The plaint avers events
anterior to the execution of the said agreement but it is not necessary
to go into all those details. Suffice is to point out the basic facts
pleaded by the plaintiff, as noted by the learned Single Judge, which
are as under:
The Pleadings
(a) It is the case of the plaintiff that the aforesaid property had
been previously let out to Sudan Embassy by the defendant No.1.
Since the defendant No.1 wanted to sell this property, efforts had to
be made to get back the possession of the property. A No-Objection
Certificate was also to be obtained from Income-Tax Authorities, as
required under Chapter XX-C of the Income Tax Act, 1961 coupled
with few more sanctions and permissions from the competent
authority for completion of the sales transactions. Defendant No.1
though assured the plaintiff that to obtain no objection and other
permissions was his obligation, yet defendant No.1 advised the
plaintiff that it would be better if the plaintiff, in order to have early
transfer of the property, hire the services of defendant No.3 for
speedy permission and No Objection Certificate and also for vacant
possession of the property.
(b) It is further the case of the plaintiff that the defendant No.3
also represented that he was capable to execute the aforesaid jobs
and for completion of the said task, he demanded Rs.1.25 crores as
his service charges. Defendant No.3 also insisted on being inducted
as Addl. Director in the plaintiff company as in that capacity he
represented that he would be in a better position to operate for
obtaining possession of the property from Sudan Embassy as well as
other sanctions.
(c) The plaintiff believed in such a representation and pursuant
thereto the defendant No.3 agreed to render his services and
confirmed so by writing a letter to the plaintiff on 30.9.1988.
(d) Pursuant to the said arrangements, the plaintiff paid two
cheques bearing No. 297959 and 297960 of Rs.5 lacs each to the
defendant No.3.
(e) As regards sales transactions between the plaintiff and the
defendant No.1, the plaintiff paid a sum of Rs.25 lacs to defendant
No.1 on 13.9.1978 by bankers‟ draft issued by the Dena Bank, Karol
Bagh. Details of the terms of agreement to sell entered into between
the plaintiff and the defendant No.1 find mention in para 15 of the
plaint.
(f) As regards the arrangements done with defendant No.3, it was
agreed that defendant No.3 shall do all acts, deeds and things
necessary and shall obtain sanction as well as obtain vacation of the
suit property from the Sudan Embassy.
(g) Despite having paid the aforesaid amounts to defendant No.3,
neither the defendant No.1 nor defendant No.3 took steps for
necessary permission, sanctions, etc.
(h) Later on, the plaintiff came to know that defendant No.1 had
taken the vacant possession of the property from Sudan Embassy and
was in actual and vacant possession thereof. The plaintiff, thereafter,
immediately approached defendant Nos. 1 & 3 and asked defendant
No.1 to execute sale deed in its favour, but defendant Nos. 1 & 3
represented that though vacant possession of the property had been
taken from Sudan Embassy, but necessary permission/No Objection
Certificate had not yet been obtained and assured the plaintiff that as
soon as the same was obtained, the sale deed will be executed.
(i) To the utter surprise of the plaintiff, he came to know that
defendant No.1 & 3, with evil designs, were negotiating and making
efforts to sell the suit property on a much higher price that it was
agreed with the plaintiff.
5. Along with the plaint, the plaintiff also preferred an application for
interim injunction under Order XXXIX Rule 1 & 2 of the CPC in
which ex-parte order dated 18.2.1993 was passed restraining
defendant No.1 & 3 from transferring, alienating and parting with
possession of the suit property. However, even when this injunction
was operating, the defendant No.1 executed six sale deeds in favour
of six purchasers on 20.5.1997. These six purchasers are the closely
held limited companies of Shri Mahesh Sharma, M/s. Haldi Ram
Bhujia Bhandar, M/s. Panchvati Plantation Pvt. Ltd and M/s.
Convenient Tours & Travels Pvt. Ltd. The events that occurred
thereafter can be stated in capsulated manner in chronological order
as they have bearing insofar as the present appeals are concerned:
The Events:
(i) 29.05.1997 - Six sale deeds by defendant No.1 though the
injunction orders were operating.
(ii) 15.09.1998 - IA No. 8145/1998 filed by the plaintiff seeking
restraint against defendant Nos. 1 & 3 from handing over and
delivering possession of the suit property to the said purchasers.
- Defendant No.1 filed reply to this application stating that he
had not executed any such sale deeds nor created any third party
rights. He rather blamed that it was the handy work of the plaintiff
and the vendees in collusion with each other. Defendant No.2 in his
reply stated that he had already parted possession to the defendant
No.3 on 12.5.1992.
(iii) CCP No. 118/1998 filed by the plaintiff. In reply to this CCP,
defendant No.1 again reiterated that he had not executed any sale
deed. He also stated that he had filed a suit in January 1999 seeking
declaration that alleged sale deeds were forged and fictitious
documents. (This suit was, however, later withdrawn by him).
(iv) 15.09.1998 - The plaintiff moved IA No. 8146/1998 under
Order XXVI Rule 9 read with Order XXXIX Rule 7 and Section 151 of
CPC in Suit No. 425/1993 seeking inspection of the suit premises by a
Local Commissioner to ascertain as to whether defendant No.1 and 3
are in possession of the premises or not.
(v) 15.09.1998 - IA No. 8147/1998 filed by the plaintiff under
Order XL Rule 1 read with Section 151 of the CPC seeking
appointment of a Receiver
(vi) 31.01.2000 - Ad interim injunction granted on 18.2.1993 was
confirmed and the defendant No.3 was restrained from creating any
third party interest in the suit property.
(vii) 08.02.2001 - One Mr. Lodha, Advocate declaring himself to be
Receiver appointed by the Calcutta High Court, sought to dispossess
the defendant No.3 on 2.2.2001. The defendant No.3 moved IA
No. 1211/2001 in Suit No. 425/1993 seeking ex-parte injunction
against the defendant Nos. 4 to 13 therein from dispossessing the
defendant No.3. The learned Single Judge of this Court allowed the
application of the defendant No.3 and restrained the defendants
from disturbing the possession of the defendant No.3 from the suit
property. Counsel for the plaintiff got the statement recorded in the
order of the learned Single Judge stating that the defendant No.3 is
in possession of the property only as a caretaker.
(viii) 31.01.2000 - The learned Single Judge passed orders dated
31.1.2000 in IA No. 8146/1998 appointing the Local Commissioner
to submit his report with regard to the possession of the suit
premises. The learned trial court also recorded in its order the
statement of the counsel for the plaintiff that the possession of the
suit premises was given to the defendant No.3 on 12.5.1992.
(ix) 10.02.2000 - The Local Commissioner submitted his report
dated 10.2.2000 recording that the defendant No.3 is in actual
physical possession of the entire suit property.
(x) 22.01.2001 - The plaintiff filed IA No. 625/2001 under Order
XXXIX Rule 1 & 2 read with Section 151 CPC seeking order to restrain
the defendant No.3 and defendant No.1 from delivering the
possession of the suit property to six vendees. The learned trial
court, on the same date, also referred to the statement of counsel for
the defendant No.1 made on 31.1.2000 regarding handing over of
the possession of the property to the defendant No.3.
(xi) 18.03.1997 - Six purchasers/vendees entered into an agreement
to sell the property with Bhagwati Developers, Kolkata (hereinafter
referred to as „Bhagwati Developers‟). This agreement contained an
arbitration clause. Purported disputes were referred to the Arbitrator
named therein, namely, Shri Debashish Kundu, Advocate, Calcutta
High Court.
(xii) 07.01.1999 - Arbitrator gave consent award directing six
purchasers to hand over peaceful and vacant possession of the suit
property to Bhagwati Developers on or before 31.1.1999. Bhagwati
Developers was also directed to make payment of Rs.1,20,90,000/-
to the six vendees.
(xiii) 17.8.2000 - Bhagwati Developers filed execution petition under
Section 36 of the Act seeking execution of the award. In this
execution petition, the Calcutta High Court passed orders dated
17.8.2000 appointing a Receiver with a direction to take physical
possession of the suit property.
(xiv) 22.1.2001 - According to the plaintiff, agreement to sell in
favour of Bhagwati Developers, arbitration proceedings and
execution petition were also collusive and fraudulent, in conspiracy
with the defendant No.3. The plaintiff, therefore, filed IA No.
621/2001 in the Calcutta High Court seeking injunction against all
these parties from taking possession of the said property by force
through court order or decree.
In this application, ex-parte ad interim injunction was passed
restraining the defendant Nos. 1 & 3 from delivering possession of
the suit property to the six purchasers and Bhagwati Developers.
Thereafter, on 15.2.2001, the Calcutta High Court adjourned the
proceedings sine die observing that the orders passed by it shall be
subject to the orders that may be passed by the Delhi High Court in
the suit.
(xv) 3.9.2007 - Impugned orders passed by the learned Single Judge
allowing IA No. 8147/1998 of the plaintiff for appointment of a
Receiver and appointed Mr. Rajesh Gupta, Advocate, as the
Receiver. By reason of the same order, IA No. 7373 preferred by the
defendant No.3 for amendment of the written statement is
dismissed.
(xvi) 18.9.2007 - On the strength of the orders dated 3.9.2007,
Receiver visited the suit property and took possession.
6. Defendant No.3 has filed FAO (OS) No. 400/2007 whereby he has
challenged the order of appointment of Receiver as well as rejection
of his application for amendment.
7. FAO (OS) No. 514/2007 is filed by Bhagwati Developers. This
appellant is also aggrieved by the appointment of Receiver on the
ground that in the proceedings taken out by it in the Calcutta High
Court, Receiver has already been appointed and, therefore, there
could not have been such order passed by the Trial Court appointing
any Receiver disregarding the orders of the Calcutta High Court, that
too in the absence of Bhagwati Developers, which is not a party in
the suit filed in the Delhi High Court, as the order directly and
adversely affects Bhagwati Developers.
8. The six vendees, in whose favour purported sale deeds were
executed on 20.5.1997, had filed application under Order I Rule
10(2) of the CPC for their impleadment. This application has,
however, been dismissed by the learned Single Judge vide orders
dated 3.9.2007. Assailing this order, FAO (OS) No. 324/2008 is
filed.
9. These are, thus, the subject matters of the three appeals. With this
background, we take up each appeal separately for consideration.
10. FAO (OS) No. 400/2007 & FAO (OS) No. 514/2007
The Arguments
Mr. Patwalia, learned counsel appearing for the defendant
No.3 (appellant in this appeal), submitted that the defendant No.3
was put in possession of the suit property on 12.5.1992 with the
specific consent and permission of the original owner, namely,
defendant No.1. He was, thus, in such possession even before the
filing of the suit and remained in possession till he was evicted by the
Receiver appointed vide impugned orders. In order to show his
possession, learned counsel referred to the pleadings, namely, para
(b) of prayer clause. He also submitted that at various places and in
various pleadings, the defendant No.1 had admitted that he had
given possession of the premises to the defendant No.3 on
12.5.1992. Even the Local Commissioner appointed by the Court
had found defendant No.3 to be in possession. He also referred to
orders dated 8.2.2001 passed by the learned Single Judge in IA No.
1211/2001 whereby the respondents in the said application were
restrained from disturbing the possession of the defendant No.3
(applicant in the said application) from the suit property. He, thus,
submitted that admitted position was that the possession of the
appellant/defendant No.3 was acknowledged and he was given
possession by the owner. Thus, such a possession was legal
possession.
Mr. Patwalia also submitted that the defendant No.3 was put
in possession by the defendant No.1 because of the reason that
defendant No.1 owed substantial amounts to the defendant No.3.
According to him, defendant No.1 had approached him in February
1992 seeking his services for getting the suit property vacated from
the Embassy of Sudan. For rendering these services, it was agreed that
defendant No.1 shall pay defendant No.3 a sum of Rs.4 crores
towards service charges and expenses to be borne by the defendant
No.3 in getting the suit premises vacated. These terms were duly
recorded and signed by the defendant No.1 as well as defendant
No.3. It was also agreed by the defendant No.1, as Karta of HUF,
that in the event of non-payment of the service charges to the
defendant No.3, after the suit property is vacated, the defendant
No.1 would deliver peaceful vacant possession of the property to the
defendant No.3 and the defendant No.3 would be entitled to retain
its possession without any charges and by way of security for the
payment of the dues until such time the dues of defendant No.3 are
paid.
The suit premises was vacated by the Embassy of Sudan on
12.5.1992 and since the defendant No.1 was not in a position to pay
the service charges to the defendant No.3, he was put in possession
by the defendant No.1 and simultaneously deposited the original
supplementary lease deed, along with other documents such as pro-
note and letter confirming deposit of original supplementary lease
deed, by way of an equitable mortgage.
Further, the defendant No.3 advanced to defendant No.1 and
his wife a sum of Rs.1,75,16,669/-, which included payments made to
tax authorities, and the said fact has been admitted by the defendant
No.1 in Suit No. 161/1999 filed by him before this Court. As the suit
property was in a dilapidated condition, at the instance of defendant
No.1, the defendant No.3 carried out extensive repair work in the
said property.
On this basis, it is claimed that not only defendant No.3 has to
recover substantial amount, which adds up to Rs.200 crores, after
including interest accumulated thereupon, the appellant/defendant
No.3 is in fact the mortgagee in possession.
On the aforesaid premise, right to remain in possession of the
suit premises is claimed on the following basis:
(a) Defendant No.3 was given the possession of the suit
premises by the owner himself, which was legal possession, and,
therefore, he was not a trespasser. Such a person in settled
possession could not be ousted, except in due course of law, i.e. by
filing a suit and obtaining decree of possession.
(b) As the defendant No.3 was a mortgagee in possession, his
possession could not be disturbed without clearing the mortgage, i.e.
paying him the entire amount which was due to him.
(c) There was no occasion to appoint a Receiver in the year
2007 in an application which was filed almost 9 years ago in the year
1998. More so, when there was no allegation regarding danger to
the property or it being frittered away.
11. As far as rejection of the application for amendment of the written
statement is concerned, we may note that the defendant No.3
wanted to add certain facts in the written statement on the plea that
these were relevant facts but could not be incorporated in the
written statement filed in 1993-94 by his earlier lawyer. The plea
which the defendant No.3 wants to add by amendment is that the
defendant No.1 had agreed to pay a sum of Rs. 4 crores to the
defendant No.3 and requested him to help seeking vacation of the
said property from the Embassy of Sudan for a consideration of Rs.4
crores as service charges. According to him, it was further agreed
that in the event defendant No.1 failed to pay the said amount, he
would be liable to pay interest on that amount @ 2% p.m. It was
further agreed that on failure to pay the amount, the defendant No.1
would deliver actual vacant and peaceful possession of the suit
property to defendant No.3, who would be entitled to retain the
same without any charges thereof, by way of security for payment of
its dues. As defendant No.3 succeeded in getting the property
vacated, but defendant No.1 expressed his inability to pay the service
charges or part thereof, he handed over actual vacant peaceful
possession of the suit property to defendant No.3 as security for
repayment of that amount. That is how defendant No.3 is in
possession of the premises.
12. While dismissing the application and refusing the permission to the
defendant No.3 to incorporate the aforesaid pleas, the learned Single
Judge has given the following reasons:-
"3. I have heard learned counsel for the parties on this
application. True, law of amendment is quite liberal and
Courts ordinarily permits amendment provided such
amendments are not mischievous in nature with a view to
delay the legal proceedings and setting up entirely new case
than the one pleaded earlier but in this case, I may say that
written statement was filed way back in 1993 and good
number of years have passed, but it never struck the defendant
to make such amendment simply by putting the blame on
earlier lawyer. Even otherwise, amendment which is sought to
be made was well within the knowledge of defendant No.3.
During all these years when proceedings were continuing that
he was being termed as trespasser. What prevented him to
explain his true position at the earliest is not explained at all.
To me it seems that when arguments were being heard and the
counsel for the parties put up their respective claims then it has
struck the mind of defendant No.3 to apply for such
amendment as it might work to his advantages. If at all he was
in possession because of defendant No.1‟s consent he should
have pleaded so at the earliest. Such belated amendment
which is otherwise totally inconsistent to the stand taken earlier
in the written statement cannot be allowed as in that case it
would amount to take the case back to the year 1993 when the
suit was filed. Therefore, this application has no merit, it being
full of malice, the same is dismissed."
13. Mr. Patwalia submitted that the approach of the learned Single Judge
was clearly erroneous inasmuch as: (i) defendant No.3 was treated as
a trespasser, which was factually incorrect, (ii) no new case was set
up by the defendant No.3 since delivery had already been taken,
which was only expanded/substantiated further, (iii) there was no
delay in filing the application inasmuch as only issues were framed
and trial had yet to commence, and (v) in dealing with the
amendment of pleadings, particularly written statement, liberal
approach is required, as held by the Supreme Court in the following
cases :-
(i) Baldev Singh & Ors. etc. v. Manohar Singh & Anr. etc.
(2006) 6 SCC 498
(ii) Usha Balasaheb Swami & Ors. v. Kiran Appaso Swami & Ors.,
(2007) 5 SCC 602
(iii) Andhra Bank v. ABN Amro Bank N.V. & Ors.
(2007) 6 SCC 167
14. Since in FAO (OS) No. 514/2007 preferred by Bhagwati Developers
the appellant has assailed the same very order, insofar as it relates to
the appointment of Receiver, it would be appropriate to note the
basis of challenge to the said order in this appeal at this stage itself so
that holistic view is taken while considering the submissions in both
the appeals relating to this aspect.
15. As already mentioned above, Bhagwati Developers is staking its claim
over the property on the basis of six sale deeds executed in its favour
by Vidur Impex & Traders etc. who had allegedly purchased the
property from the defendant No.1. We have also noted above that
on the basis of arbitration clause contained in the agreement to sell
entered into between the said six vendees in favour of Bhagwati
Developers, the matter was referred to the Arbitrator, who passed
consent award dated 7.1.1999 and execution petition seeking
execution of the said award was filed in the Calcutta High Court,
which passed orders dated 17.8.2000 appointing a Receiver with a
direction to take physical possession of the suit property.
16. On that basis, submission of learned counsel appearing for Bhagwati
Developers is that since the Calcutta High Court had already
appointed a Receiver, those orders could not be disregarded by this
Court thereby appointing another Receiver. According to the
learned counsel, such an order was, in fact, an order against the
Calcutta High Court and comity of jurisdictions should have been
respected. It was also submitted that Bhagwati Developers was not
even a party to the proceedings in the suit filed in Delhi and,
therefore, an order which affected its rights adversely could not have
been passed in its absence. Learned counsel further submitted that
pursuant to the orders passed by the Calcutta High Court, the said
Receiver had dispossessed Mr. Luv Kumar Kaul and it is the said
Receiver who was in possession of the property. No steps were
taken by Mr. Kaul that he be put back in possession. No steps were
taken by M/s. Tosh Apartments seeking vacation/variation of the
orders passed by the Calcutta High Court. Therefore, the impugned
order appointing another Receiver amounted to dispossessing the
Receiver appointed by the Calcutta High Court.
17. Mr. Mukund, learned counsel for the appellant also pointed out that
the defendant No.1 had filed Suit No. 161/1999 seeking declaration
that the six sale deeds executed by him in favour of Vidur Implex &
Traders etc. were void. However, this suit was dismissed as
withdrawn on 10.1.2001. Thereafter, IA No. 1537/2001 was
preferred seeking restoration of the suit. However, in the meantime,
the defendant No.1 died on 12.1.2002 and till date the said suit has
not been restored. Therefore, these six sale deeds in favour of Vidur
Implex & Traders etc. were to be treated as valid and sale deeds by
them in favour of Bhagwati Developers, in turn, were also to be
treated as valid while deciding the application for appointment of
the Receiver. Not only that, argued the learned counsel, the award,
even when it was a consent award, amounted to decree under the
provisions of the Arbitration and Conciliation Act, 1996 and as there
was no challenge to the same, this decree had become final. More
so, when no steps were taken to challenge that decree or the order
of the Calcutta High Court. Order dated 18.4.2001 of the Calcutta
High Court, therefore, should have been respected.
18. Dr. A.M. Singhvi appeared for Tosh Apartments and made his
detailed submissions rebutting the arguments of counsel for the
appellants in both the appeals. Mr. Yakesh Anand appeared for the
LRs of the defendant No.1 and supported the impugned order of
appointment of the Receiver. We shall take note of arguments of
Dr.Singhvi as well as Mr. Yakesh Anand while dealing with the
arguments of counsel for the appellants.
Orders of the Calcutta High Court and its effect:
19. The first and foremost question that would arise for consideration
would be the purport, scope and effect of the orders passed by the
Calcutta High Court, as the hurdle in the form of those orders, which
is sought to be created by the learned counsel for Bhagwati
Developers, has to be crossed over by Tosh Apartments before
examining the validity of the order of appointment of Receiver
passed by the learned Single Judge on merits.
20. In the execution petition filed by Bhagwati Developers in the
Calcutta High Court under Section 36 of the Arbitration and
Conciliation Act, 1996, it was averred that award was passed on
7.1.1999 and even when no appeal was preferred nor the award had
been challenged, sale deeds in favour of Bhagwati Developers were
not executed by the six vendees. In this petition, order dated
18.8.2000 was passed directing execution of the sale deeds in favour
of Bhagwati Developers within four weeks, failing which Mr. N.N.
Ganguly, Advocate, was appointed as the Receiver to take possession
of the suit premises. Thereafter, the Receiver came to Delhi to take
possession. Initially, he could not take possession because of
resistance put by the occupants. He, thus, requested for police help,
which was given by the Calcutta High Court. Order dated 15.2.2001
records that on the basis of police assistance the Receiver had taken
possession of the property and had sealed the same. At that stage,
application for intervention was filed by the defendant No.3 and
facts relating to filing of the present suit in Delhi High Court as well
as the various orders passed therein were brought to the notice of
the Calcutta High Court. It was, inter alia, pointed out that there
was an agreement to sell executed by the defendant No.1 in favour
of Tosh Apartments, on the basis of which suit for specific
performance was filed by Tosh Apartments in the Delhi High Court;
in the said suit, certain interim orders were passed, including the
order restraining the defendant No.1 from transferring or alienating
the property in question, which order was in force since 18.2.1993,
which was confirmed on 13.1.2000; certain orders were passed
recording that the defendant No.3 was in possession of the suit
property and he did not intend to part with the possession thereof.
21. After taking note of these facts in detail, the Calcutta High Court, in
its order dated 15.2.2001, inter alia observed as under :-
"The facts remain that these facts were neither disclosed to the
decree-holder nor to the Arbitrator and this question was not
necessary to be gone into while executing the decree and, as
such, it was also not placed before this Court and this Court
having not been apprised of such facts had passed an order for
taking over possession of the property. In the order dated
8.2.2001 the Delhi High Court had taken a note of this
position. Be that as it may, it is not necessary to many my
observation with regard to the findings made therein, nor this
Court can comment on the order passed by another Court on
the basis of the materials placed before it. But it appears that
there is every possibility of conflicting orders being passed in
respect of the self-same properties between the parties or those
claiming through one or the other of them by two High
Courts. Judicial propriety demands that the court should
maintain its decorum and dignity and should not pass any
order which will lie in conflict with each other. It is the parties
who may fight each other but not the courts. If some order is
passed, it is expected that another Court should pay proper
regards and respect to such order. Since it is pointed out that
these facts were not disclosed this Court, therefore, what
would have been the effect if these facts would have been
disclosed before this Court is a question which cannot now be
presumed, but in all probabilities it seems that if these facts
were disclosed before this Court, this Court might have been
slow in passing the order that had been passed earlier.
Therefore, the order passed by this Court, if it is in conflict with
the order passed by the Delhi High Court, the same shall
always be subject to the order that might be passed by the
Delhi High Court.
Since Delhi High Court has also passed an order by
which certain direction was given to the Receiver appointed by
this Court, therefore, it is no more necessary to pass any further
order. In my view, the decree-holder in this proceeding who is
added as defendant no. 10 in the Delhi High Court suit should
approach the Delhi High Court for obtaining the appropriate
orders if he is so advised. If there is a conflict of decree which
might affect a proceeding in another High Court, in that event
the same has to be thrashed out in an appropriate proceeding.
It is very difficult to enter into such question in an execution
proceeding unless such question be raised in a proceeding
under Order XXI Rule 97 CPC. From the records of this Court,
it does not appear that any such application under Order XXI
Rule 97 has ever been made in order to enable the parties to
resisting possession in execution of the decree, so that they
would have an opportunity to place their cases about the
executability of the decree against them."
22. It is clear from the above that the Calcutta High Court noted conflict
between the orders passed by it and by this Court. It laid emphasis
on maintaining comity of jurisdictions and giving respect to the
orders passed by the other High Court. It also expressed that there
was a possibility that it would not have passed the orders of
appointment of the Receiver had it been apprised of the orders
passed by Delhi High Court. In this context, aforequoted
observations came to be passed, including:-
"...Therefore, the order passed by this Court, if it is in conflict
with the order passed by the Delhi High Court, the same shall
always be subject to the order that might be passed by the
Delhi High Court."
The Calcutta High Court, thus, in no uncertain terms,
mentioned that since Bhagwati Developers and the vendors, who
had sold the suit property to Bhagwati Developers by six sale deeds,
were now parties in the suit filed in the Delhi High Court (defendant
Nos. 10 and 4 to 9 respectively) and thus, it is the Delhi High Court
which could be approached for necessary orders.
In view thereof, we are of the opinion that the learned Single
Judge was right in recording that the Calcutta High Court itself stated
that its order for appointment of Receiver was subject to the orders
that might be passed by the Delhi High Court. It is more so when,
after taking note of the aforesaid facts, the Calcutta High Court
deemed it proper not to pass any further orders and left the matter
to the Delhi High Court giving permission to Bhagwati Developers to
approach this Court for obtaining the appropriate orders, if so
advised.
23. The arguments of Bhagwati Developers or the so-called six
purchasers, namely Vidur Impex & Traders etc. based on the
proceedings in the Calcutta High Court and orders passed in those
proceedings would, therefore, be of no avail. No doubt, comity of
jurisdictions among the courts is to be given credence, but what is
seen in this case was that the Calcutta High Court, though passed
order appointing Receiver, when informed about the proceedings in
the Delhi suit, itself respected the comity and went to the extent of
observing that if the orders in Delhi suit were in the knowledge of
the Calcutta High Court, probably it would not have passed the
orders which it passed and that would include order for appointment
of the Receiver. Therefore, respecting this very comity, the Calcutta
High Court clarified that its orders would be subject to the orders
that may be passed by the Delhi High Court as all the parties were in
the Delhi High Court; suit in Delhi High Court was much prior in
time and Delhi High Court took a holistic view of the entire matter.
24. We may state at the cost of repetition here that when there was an
injunction against defendant No.1 to create third party interest in the
suit property, passed way back in the year 1993 and confirmed
thereafter, it would put a big question mark on the validity of the
purported sale deeds executed by defendant No.1 in favour of Vidur
Impex & Traders and others and consequently by Vidur Implex &
Traders etc. in favour of Bhagwati Developers. We do not want to
express our final opinion on this as the matter has to be gone into
either in the suit or in other appropriate proceedings finally.
The core issue
25. With this, we address the basic issue as to whether it was reasonable
and/or proper for the learned Single Judge to pass the order of
appointment of Receiver under the given circumstances.
26. Following developments and circumstances in this behalf need
mention and/or reiteration:
(a) The suit filed by the plaintiff is predicated on agreement to sell
dated 13.9.1988 purportedly executed in its favour by the defendant
No.1, owner of the suit property, which is earliest transaction in
point of time.
(b) Suit, on this basis, filed in April 1993 is also earliest legal
proceeding instituted by the plaintiff. In this suit, ad interim
injunction dated 18.2.1993 was passed restraining defendant Nos. 1 &
3 from transferring, alienating or parting with possession of the suit
property in any manner or creating third party rights therein.
(c) The plaintiff also filed another IA No. 9154/1993 seeking
restraint against the defendant No.1 as well as defendant No.3 from
changing the nature of the suit property by making structural
changes, additions or alterations therein. In this application orders
were passed directing them not to carry out any structural additions,
alterations and permitted only the renovations like painting,
polishing of the suit property.
(d) In spite of the restraint order dated 18.2.1993, the defendant
No.1 allegedly transferred the suit property by executing purported
six sale deeds on 28.5.1997 in favour of Vidur Impex & Traders and
others.
It is the submission of learned counsel appearing for the
plaintiff that intentionally six sale deeds were executed showing
consideration of Rs.48 lacs each keeping the same below the
prescribed limit of Rs.50 lacs with a fraudulent intent to avoid the
application of Chapter XX-C of the Income-Tax Act.
(e) On coming to know of the aforesaid sale transactions, the
plaintiff filed application under Order XXXIX Rule 1 & 2 CPC for
restraining the defendant Nos. 1 & 2 from transferring possession of
the suit property to the said six transferees under the alleged six sale
deeds. Restraint order to this effect was passed by the learned Single
Judge. Further orders were passed restraining these six transferees
(defendant Nos. 4 to 9) from acting upon the impugned sale deeds.
(f) Defendant No.1 in his reply took the stand that impugned sale
deeds were forged and fabricated and were not executed by him.
He even filed suit No. 161/1999 for declaration to this effect.
However, this suit was withdrawn on 10.1.2001 vide application IA
No. 255/2001 purported to have been moved by him through Shri.
Bhupinder Singh, Advocate, on the statement of Advocate without
the presence of the defendant No.1 or his statement. Thereafter, IA
No. 1537/2001 was moved by the defendant No.1 stating that he
had not authorized any counsel to make an application for
withdrawal of the suit and the whole proceedings were collusive,
fraudulent and that he had not entered into any compromise with
the said six transferees.
Though we are not concerned with these proceedings, this fact
is mentioned to highlight the manner in which the transactions are
taking place, that too in the teeth of injunction order passed in Suit
No. 425/1993 and the vacillating attitude of the defendant No.1
(since deceased).
(g) Though there was restraint order against defendant Nos. 4 to
9, i.e. Vidur Impex & Traders and others, not to act upon the
impugned sale deeds, they entered into agreement dated 18.3.1997
for transfer of their purported rights and interest in the suit property
in favour of Bhagwati Developers. This agreement contained an
arbitration clause, on the basis of which the Arbitrator was appointed
and consent award passed. Again, without commenting upon the
validity or otherwise of such proceedings, which would naturally be
thrashed out in appropriate proceedings, suffice it to state was that
all this was happening in violation of the injunction order passed in
the instant suit. Attempt was made to get the Receiver appointed
from the Calcutta High Court and take possession of the suit
property.
27. At this stage, when the plaintiff came to know of the appointment of
the Receiver by the Calcutta High Court, who had taken possession
of the property and was going to deliver it to Bhagwati Developers,
that the plaintiff pressed its IA No. 2625/2001, which was already
pending, for appointment of a Receiver. Aforesaid facts when taken
into consideration, would make it imperative for the court to protect
the property by appointing a Receiver. Mere passing of injunction
orders against the parties was not serving any purpose. Such
appointment under the aforesaid circumstances is clearly valid,
reasonable and justified exercise of power.
28. In the case of Surjeet Singh & Ors. v. Harbans Singh & Ors., JT 1995
(6) SC 415, the Supreme Court has held as under :-
"If an alienation or assignment is made in the defiance of a
restraint order passed by the court, such an alienation or
assignment is against the public policy and is void. It was held
that if the court was to let it go as such, it would defeat the
ends of justice and the prevalent public policy. It was further
held that "when the court intends a particular state of affairs to
exist while it is in seizin of a lis,that state of affairs is not only
required to be maintained, but it is presumed to exist till the
court orders otherwise. The court in these circumstances has
the duty, as also the right to treat the alienation/assignment as
having not taken place at all for its purposes. Once that is so,
Pritam Singh and his assignees, respondents herein, cannot
claim to be impleaded as parties on the basis of assignment.
Therefore, the assignees respondents could not have been
impleaded by the trial court as parties to the suit in
disobedience of its orders. The principles of lis pendense are all
together on a different footing."
29. Again, it will also be useful to extract the following observations of
the Apex Court in the case of Jayant Mudaliar v. Ayyaswamia &
Ors., AIR 1973 SC 569, which are to the following effect :-
"Lis pendense literally means a pending suit and the doctrine of
the lis pendense has been defined as the jurisdiction, power or
control which a court acquires over the property involved in a
suit pending the continuance of the action and until final
judgment therein."
It was further observed that :-
"Exposition of doctrine indicates that the need for it arises from
the very nature of the jurisdiction of courts and their control
over the subject matter of litigation so that parties litigating
before it may not remove any part of the subject matter
outside the power of the court to deal with it and thus make
the proceedings infructuous."
30. In yet another case decided by the Supreme Court entitled Rajinder
Singh & Ors. v. Santa Singh & Ors., AIR 1973 SC 2537, it was held :-
"The doctrine of lis pendense was intended to strike at attempt
by parties to a litigation to circumvent the jurisdiction of a
court, in which a dispute on right or interests in immovable
property is pending, by private dealings, which may remove
the subject matter of the litigation from the ambit of the
court‟s power to decide a pending dispute or frustrate its
decree. Alienees acquiring any immovable property during a
litigation over it are held to be bound by an application of
doctrine, by the decree passed in the suit, even though they
may not have been impleaded in it. The whole object of the
doctrine of lis pendense is to subject parties to the litigation as
well as others, who seek to acquire rights in immovable
property which are the subject matter of a litigation, to the
power and jurisdiction of the court so as to prevent the object
of pending action from being defeated."
31. This Court in Joginder Singh Bedi v. Sardar Singh & Ors., 26 (1984)
DLT 162 Del (DB) and Sanjay Gupta v. Kalawati & Ors., (1992) 53
DRJ 653 followed the aforesaid principle.
32. The conduct of Mr. Luv Kumar Kaul is also not above board and,
therefore, his so-called interest has to be ignored while confirming
the orders of appointment of Receiver passed by the learned Single
Judge. It appears that he has taken advantage of the weaknesses of
defendant No.1 who, during his lifetime, acted in contradictory
manner at the instance of one person or the other. Mr. Kaul came
into possession of the suit property as a caretaker when, according to
him, the so-called remuneration fixed for him for getting the premises
vacated from the Embassy of Sudan were not paid. As per Mr. Kaul,
whopping consideration of Rs.4 crores was agreed for this purpose
that too way back in the year 1992. Various kinds of pleadings filed
by the defendant No.1 admitting the claims of Mr. Kaul throw
suspicion about the voluntary nature of those pleadings/admissions.
More importantly, it needs to be highlighted that with the passage of
time claims of Mr. Kaul kept on increasing in geometrical
progression. What started with a claim of Rs.4 crores in the year
1992 (which was in any case very huge even at that time) has
touched a startling figure of Rs.200 crores (approx.) today. All types
of possible rights are asserted over the property by him. He claims to
be a tenant and also in possession of the property as a mortgagee.
However, apart from self-serving admissions in the pleadings, which
he got from defendant No.1, there is no valid document in his favour
on the basis of which, prima facie, he can assert any right, title or
interest in the suit property. Fifteen years have passed since the suit
was filed. Proceedings are delayed on one account or other and
because of various developments which took place in the intervening
period, as narrated above, the suit has not been decided so far. In
case the suit is ultimately decreed in favour of the plaintiff/Tosh
Apartments, it may even become difficult to reap the fruits thereof in
case the property is tossed between Mr. Kaul, Vidur Impex & Traders
and others or Bhagwati Developers for that matter. That is yet
another justification for maintaining the order of appointment of the
Receiver.
33. In this behalf, we agree with the submission of Mr. Singhvi, learned
senior counsel for the plaintiff, that in a suit for specific performance,
the court has ample power and jurisdiction to appoint a receiver. In
Kerr on Receivers 16th Edition (on page 58), it has been laid down
that if a fair prima facie case for the specific performance of a
contract is made to appear, the court may interfere upon motion and
appoint receiver. In Foot Note No. 37, reference has been made to
case law including C Kennedy v. Lee (1870) 3 MER 441, M. Cloud v.
Phelp, (1838) 2 JUR 962. The appointment may be made in such
circumstances before the order for a sale is made absolute. (Re:
Stephard, (1892) 31 1R 95).
34. In „Law On Receivers‟ by S.K. Bose, 3rd Edn. (page 593, para 624), it
has been laid down that :-
"In a suit for specific performance of agreement of sale a
receiver can be appointed when the plaintiff has a good prima
facie case and the circumstances justify it."
35. In Halsbury‟s Laws of England, Vol. 44(1), 4th Edn. (Re-Issue), in para
931 (at page 545), it has been laid down that :-
"The Court has power to make an interlocutory order to
enforce the performance of a contractual obligation. In a
purchaser action, the defendant may be restrained in injunction
from disposing of the property or creating rights over it
inconsistent with the terms of the contract. The defendant
may also be restrained by injunction from damaging the subject
matter of the contract or taking it out of jurisdiction. The
court has power to make an order of detention or preservation
of any property which is the subject matter of the action or for
the inspection of any such property in the possession of a
party. If it is necessary for the preservation of the property,
the court may appoint some person to act as a receiver
pending the determination of the proceedings. If the subject
matter of the sale is the property (such as farm land) which
needs to be worked in order to prevent deterioration, the
receiver may also be appointed to act as a manager."
36. In Halsbury‟s 4th Edn. (Re-Issue) Vol. 39(2) in para 330, it has been
laid down as follows :-
"In an action for specific performance or recession of a contract
for the sale of land and especially for mining property, a
receiver and if necessary a manager is frequently appointed to
preserve the property until the right is decided."
37. In American Jurisprudence (Vol.75) Corpus Juris Secundrum (in para
7), it is held as under :-
"Generally receiver may, in proper case, be appointed in an
action involving real property, such as an action for partition,
specific performance."
38. It is also necessary to mention here that the instant suit is of specific
performance filed by the plaintiff on the basis of agreement dated
13.9.1988 executed in its favour by the defendant No.1. Mr. Luv Kr.
Kaul is staking his claim qua that property on different grounds that
cannot be the subject matter of these proceedings in which Tosh
Apartments is the plaintiff. Mr. Kaul can assert his rights, if any, by
way of independent and substantive proceedings. We may also
clarify that observations made in this order qua Mr. Kaul are totally
tentative keeping in view only the nature of the suit filed by Tosh
Apartments and these observations would not come in the way of
Mr. Kaul in the independent proceeding, if he chooses to institute the
same.
For this reason, even the amendment sought by Mr. Kaul
appears to be unnecessary and not relevant, keeping in view the
nature of suit filed by Tosh Apartments. In these proceedings, Mr.
Kaul cannot assert his rights on the basis he wants to do.
39. For this reason, as well as other reasons given by the learned Single
Judge, we affirm the order of rejection of the amendment
application as well. As a result, these appeals are dismissed.
40. FAO (OS) No. 324/2008
This appeal is filed by Vidur Impex & Traders and five others
against orders dated 26.5.2008 passed by the learned Single Judge
whereby their application for impleadment in the suit has been
dismissed by the learned Single Judge. These six appellants are the
same persons who alleged that six agreements to sell dated
20.5.1997 in respect of the suit property were executed in their
favour by the defendant No.1.
41. It is not necessary to repeat the facts, which we have already taken
note of, including the fact that thereafter these six appellants entered
into an agreement to sell with Bhagwati Developers, on the basis of
which consent award was passed and execution filed by Bhagwati
Developers in the Calcutta High Court. In the application filed by
the appellants for impleadment in the year 2008 (IA No.
1861/2008), they averred that they became aware of the injunction
orders passed in the suit only after orders were passed by the
Calcutta High Court in the execution petition filed by Bhagwati
Developers. Their application was contested by Tosh as well as LRs
of the defendant No.1.
42. The learned Single Judge has dismissed the application primarily on
the ground that in a suit for specific performance filed by Tosh
Apartments against the defendant No.1, predicated on agreement
dated 13.9.1988, these appellants, being third party or stranger to the
said contract/agreement, could not claim impleadment. It is also
recorded that the purported sale transactions by the defendant No.1
in favour of these appellants was after the injunction order passed
against defendant No.1 and Mr.Luv Kumar Kaul. It also noted that
on 22.1.2001, the said defendants were restrained from delivering
possession of the suit property to these very appellants (respondent
Nos. 3 to 8 in the application in which orders were passed). The
learned Single Judge took note of judgments of the Supreme Court,
as per which under these circumstances these appellants could not be
impleaded as defendants, which can be found from the following
discussion :-
"18. The applicants are correct in their submission that in
Kasturi‟s case, the Supreme Court considered as to who would
be necessary parties in a suit for specific performance.
Although, there are some observations in the decision which
seem to favour the applicants, at the same time, the Court after
noticing previous judgments, particularly, Anil Kumar singh vs.
Shivnath Mishra, (1995) 3 SCC 147, Vijay Pratap v. Sambhu
Saran Sinha, (1996) 10 SCC 53 held that a third party or a
stranger to a contract cannot be added to the proceeding so as
to convert its character into a suit of different character. The
Court further held that in a proceeding for specific
performance adjudication of collateral matters should not be
permitted, so as to change the nature of the proceeding into a
complicated suit for title between the plaintiff and others, who
were not parties to the contract for specific performance, but
claimed to have acquired title subsequently. Therefore, this
court is of the opinion that the Supreme Court in Kasturi‟s case
did not uphold a broad proposition that every subsequent
purchaser of property, which in a matter of suit for specific
performance of a contract, is a necessary party.
19. The decisions in Bibi Zubaida Khatoon and Surjit Singh
are in this context of some significance. Bibi Zubaida Khatoon
was a case where during pendency of the suit for specific
performance the vendor sold the property without seeking
leave of the Court. The Court upheld the rejection of
application (for impleadment of the transferee) by the trial
court as affirmed by the High Court on the ground that a
transferee pendente lite cannot, as of right, seek impleadment
as a party in such suit unless the sale was preceded by leave of
Court. Surjit Singh was a suit for partition where the Court had
restrained all parties alienating or otherwise transferring a suit
property. Contrary to that order, one of the parties sold his
share. The assignee sought impleadment in the suit. The
Court, although dealing with the issue under Order XXII Rule
10 CPC made observations which are quite apt in the present
context :
"In defiance of the restraint order, the alienation/
assignment was made. If we were to let it go as such, it
would defeat the ends of justice and the prevalent public
policy. When the Court intends a particular state of affairs
to exist while it is in seisin of a lis, that state of affairs is
not only required to be maintained, but it is presumed to
exist till the Court orders otherwise. The Court, in these
circumstances has the duty, as also the right, to treat the
alienation/assignment as having not taken place at all for
its purposes. Once that is so, Pritam Singh and his
assignees, respondents herein, cannot claim to be
impleaded as parties on the basis of assignment.
Therefore, the assignees-respondents could not have been
impleaded by the trial court as parties to the suit, in
disobedience of its orders. The principles of lis pendens as
altogether on a different footing. We do not propose to
examine their involvement presently. All what is
emphasized is that the assignees in the present facts and
circumstances had not cause to be impleaded as parties to
the suit."
20. The cumulative sequence of events noticed above leads
this Court to conclude that the vendor P.K. Khanna allegedly
sold the properties in 1997. The applicants also claim as such.
They were aware about the existence of this suit if not in 1999
at least from 2001 onwards, when they were made parties in
an application and subject to an injunction. Their conduct in
approaching, for impleadment, now seven years later, cannot
be countenanced. That apart, as held in Kasturi‟s case their
impleadment would completely alter the nature of the suit
which was instituted in 1993 for specific performance of a
contract, of 1988."
43. Mr. Dushyant Dave, learned senior counsel for the appellants,
referred to the orders dated 22.1.2001 passed in IA No. 625/2001
whereby injunction orders were passed against the present appellants
as well. Similarly, in IA No. 9576/2001, the learned Single Judge had
issued direction against the appellants to deposit the title deeds. On
this basis, he argued that it clearly showed that even as per the
respondents, the appellants were necessary parties. He also cited the
following judgments of the Supreme Court in support of his
submission :-
(i) Khemchand Shankar Choudhari & Anr. v. Vishnu
Hari Patil & Ors.
(1983) 1 SCC 18
(ii) Ramesh Hirachand Kundanmal v. Municipal
Corpn. of Greater Bombay & Ors.
(1992) 2 SCC 524
(iii) Razia Begum v. Sahebzadi Anwar Begum & Ors.
AIR 1958 SC 886
44. We are of the opinion that order of the learned Single Judge does
not need any interference and in the circumstances of this case the
trial court rightly refused the prayer of the appellants to implead
themselves as parties in the suit. Our conclusion is based on the
following reasons :-
(a) Even as per the version of the appellants, they have further
sold the property to Bhagwati Developers and, therefore, as of
today, they have no direct or commercial interest left in the
property.
(b) They never approached earlier for their impleadment and
application was filed only in the year 2008, by which date they
had, as per their own showing, lost interest in the suit
property.
(c) Defendant No.1 purportedly sold the property in their favour
even when there was an injunction order. In these
circumstances, it cannot be said that they were the bona fide
purchasers.
In Surjit & Ors. etc. etc. v. Harbans Singh & Others etc.
etc., JT 1995 (6) SC 415, the Supreme Court, in similar
circumstances observed as under :-
"4. .....In sum, it did not make any
appreciable difference whether the property
per see had been alienated or a decree
pertaining to that property. In a defiance of
the restraint order, the alienation/assignment
was made. If we were to let it go as such, it
would defeat the ends of justice and the
prevalent public policy. When the Court
intends a particular state of affairs to exist
while it is in seizing of a lis, that state of affairs
is not only required to be maintained, but it is
presumed to exist till the court orders
otherwise. The court in these circumstances
has the duty as also the right to treat the
alienation/assignment as having not taken
place at all for its purposes ...."
To the same effect is the judgment of this Court in Sanjay
Gupta v. Smt. Kala Wati, 85 (2000) DLT 828, and following
observations contained therein need a mention :-
"15. .....it is immaterial whether the alieneee
pendent lite had or had no notice of the
pending proceedings. Nor is it necessary that
the alienee must be impleaded as a party to
the suit. Such transferee has no prior equity
nor any pre-existing right ....."
16. The broad purpose of Section 52 is to
maintain the status quo unaffected by the act
of any party to the litigation pending its
determination [Gauri Dutt Maharaj v. Sukur
Mohammad, AIR 1948 PC 149 and Joginder
Singh Bedi (supra)]. Section 52 placed a
complete embargo on the transfer of
immovable property right which is directly and
specifically in question in a pending litigation
and applies irrespective of the strength or
weakness of the case on one side or other
(Kedarnath v. Sheonarain, AIR 1970 SC 1717)"
45. Insofar as orders passed by this Court in IA No. 625/2001 and IA No.
9576/2001 are concerned, those applications were moved when the
plaintiff/Tosh Apartments came to know that in spite of the
injunction orders, the defendant No.1 wanted to fritter away the
property and created third party interest and since such a move on
the part of the defendant No.1 was in favour of these appellants, in
order to secure effective implementation of the injunction order
passed earlier, these appellants were made respondents for limited
purpose. That would not mean that in a suit for specific
performance of agreement to sell, in which these appellants are the
strangers, they will have any right or so.
46. We, therefore, do not find any merit in this appeal and dismiss the
same with costs.
(A.K. SIKRI)
JUDGE
(MANMOHAN SINGH)
JUDGE
February 20, 2009
nsk
