Rajinder Singh And Anr. vs Manjit Singh And Anr.
2009 Latest Caselaw 2839 Del

*              HIGH COURT OF DELHI AT NEW DELHI

+              IA No.9240/2007 and IA No.11548/2007
                    in CS (OS) No.1480/2007

                                     Date of decision : July 27, 2009

RAJINDER SINGH AND ANR.            ..... PLAINTIFFS
             Through : Mr. B.T. Singh Advocate with
                       Mr. D.S. Anand, Advocate.


                                   Versus


MANJIT SINGH AND ANR.           ..... DEFENDANTS
              Through : Mr. Sandeep Sethi, Senior
                        Advocate with Ms. Prathiba M.
                        Singh, Adv. Mr. Maninder
                        Singh, Mr. Manik Dogra,
                        Ms. Surbhi Mehta Advocates
                        for D-1 & D-2.
                        Ms. Amrit Kaur Oberio Adv. for
                        D-3/DDA.
%
   CORAM:
   HON'BLE MS. JUSTICE ARUNA SURESH

      (1) Whether reporters of local paper may be
          allowed to see the judgment?

      (2) To be referred to the reporter or not?                  Yes

      (3) Whether the judgment should be reported
          in the Digest ?                                        Yes

                                JUDGMENT

ARUNA SURESH, J.

IA No.9240/2007 (Order 39 Rule 1 & 2 CPC) and IA No.11548/2007 (Order 39 Rule 4 CPC) in CS (OS) No.1480/2007

1. By this common order, I shall dispose of two

applications; one filed by the plaintiff under Order

39 Rule 1 & 2 CPC and the other filed by defendants

No. 1 and 2 under Order 39 Rule 4 CPC for vacation

of the ex-parte ad interim order passed by this court

on 17th August, 2007.

2. Briefly narrated the case of the plaintiffs is that

Plaintiff No.1 and defendant No.1 are real brothers.

Plaintiff No.2 is the wife of Plaintiff No.1 whereas

defendant No.2 is the wife of defendant No.1.

Parties to the suit purchased a residential plot

No.43, Jasola, Pocket 1, behind Apollo Hospital

Delhi, admeasuring 250.14 sq. metres jointly from

the DDA in an auction. Perpetual Lease Deed dated

22nd June, 2005 duly registered in favour of the

parties was executed by the DDA/defendant No.3.

Defendant No.1 had acted for and on behalf of the

plaintiffs as their Special Power of Attorney holder

at the time of execution and registration of the

Perpetual Lease Deed by virtue of Power of Attorney

executed by the plaintiffs in favour of defendant

No.1 on 1st October, 2004 duly registered at the

office of the Sub Registrar. Plaintiffs along with their

children left for USA in the year 2004 after

execution of Power of Attorney and Letter of

Authorization, etc. including Power of Attorney

dated 1.10.2004 in favour of defendant No.1

empowering him to act on their behalf in respect to

their half un-demarcated share in the said

immoveable property. Plaintiffs also executed a

Power of Attorney and Letter of Authorization, etc.

in favour of defendant No.1 in USA and sent them to

defendant No.1 and 2 to act upon the same as they

had trust and confidence on defendant No.1 being

Plaintiff No.1's younger brother.

3. In the month of May, 2007, plaintiffs came to know

that defendants No.1 and 2 were negotiating for the

sale of the suit property without informing and

without obtaining consent of the Plaintiffs. Plaintiffs

therefore, executed Deed of Revocation of General

Power of Attorney dated 24th May, 2007 whereby

they revoked Power of Attorney dated 1.10.2004

issued by them in favour of defendant No.1 and also

all other Power of Attorneys given in favour of

defendant No.1 thereafter. Plaintiffs also got issued

a Public Notice dated 24th May, 2007 in 'Sunday

Statesman' informing the public that defendant

No.1 had no authority to do any act, deed of

transaction on Plaintiffs behalf in respect of the suit

property. Necessary intimation was also sent to

Sub Registrar, Mehrauli, Sub Registrar Aruna Asaf

Ali Road and DDA. Plaintiffs apprehended, on the

basis of reliable information received by him that,

defendants would in illegal manner sell, alienate,

transfer or part with possession of the half un-

demarcated share of the plaintiffs in the suit

property, thereby causing wrongful loss to them and

undue gain to themselves. Hence, the present

application seeking temporary injunction against

defendants No.1 and 2 for restraining them from

alienating the suit property in any manner or

creating any third party interest in the same.

4. Defendants have contested the application and also

as stated above, filed an application seeking

vacation of the ex-parte ad interim injunction

granted in favour of the plaintiffs. Defendants have

contended in their reply that plaintiffs had no right,

title or interest in the suit property in view of

Memorandum of Understanding (MOU) executed

between the parties on 1.10.2004, pursuant to

which the plaintiffs sold their entire right and claim

over the property and gave up their 50% undivided

share in the suit property in favour of defendant

No.1 on receipt of payment of Rs.14,50,000/- vide

receipt dated 1.10.2004. The Plaintiffs also

executed General Power of Attorney and Special

Power of Attorney in favour of defendant No.1

granting all rights and interest in the suit property

including the sale, alienation, etc. of the property.

Besides, plaintiffs also executed Indemnity Bond

and a Notarized Will in favour of defendant No.1 on

1.10.2004 itself to the exclusion of their right, title

or interest in the suit property by bequeathing the

same in favour of defendant No.1. The Plaintiffs

also executed another Irrevocable General Power of

Attorney (IGPA) and Irrevocable Special Power of

Attorney (ISPA) in favour of defendant No.1 on 18 th

March, 2005 pertaining to the suit property duly

notarized by the Indian Embassy USA empowering

defendant no.1 to sell, mortgage, gift or release the

said property in any manner.

5. It is further averred that the defendants had paid

the entire consideration amount of Rs.80,50,000/- to

the DDA for the purchase of the suit property. In

lieu of plaintiff No.1 depositing EMI of Rs.51,974/-

for the repayment of the loan taken from the Bank

for the purchase of the property, defendant No.1

had been depositing the amount of Rs.52,000/- in

the account of Plaintiff No.1 and Plaintiffs did not

pay any amount even for repayment of the loan and

that plaintiff No.1 was facing criminal charges and

he fled to USA and has been declared Proclaimed

Offender in the criminal proceedings pending

against him. Defendant No.1 vide two registered

agreements to sell dated 26th May, 2006 sold 50%

share of the suit property to defendant No.2 and

that defendant No.2 is the owner of 75% of the

property and defendant No.1 is the owner of 25% of

the property. The defendants have no intention to

sell the suit property but intend to build a

residential house in the said property and reside

with their mentally retarded child.

6. The defendants have also challenged the

maintainability of the suit on the principle of

acquiescence and estoppels and it is prayed that

the application filed by the plaintiffs under Order 39

Rule 1 and 2 CPC deserves dismissal and the ex-

parte ad interim order granted in their favour be set

aside.

7. I have heard Mr. B.T. Singh, learned counsel for the

plaintiffs, Mr. Sandeep Sethi, learned senior counsel

for defendant No.1 and 2, Ms. Amrit Kaur Oberio,

learned counsel for defendant No.3 DDA and have

carefully perused the record.

8. The admitted facts in the case are:-

(a) Parties jointly purchased a plot No.43, Jasola,

Pocket 1, behind Apollo Hospital Delhi,

admeasuring 250.14 sq. metres from DDA in

an open auction.

(b) DDA executed a Perpetual Lease Deed dated

22nd June, 2005 duly registered with the

registrar in favour of the parties which was

signed by defendant No. 1 as attorney of the

plaintiffs.

(c) Plaintiffs had executed a Power of Attorney on

1.10.2004 in favour of defendant No.1 which

was also got duly registered on the same day

with the Sub Registrar Aruna Asaf Ali Road in

respect of the suit property.

(d) The Plaintiffs also executed a MOU, Indemnity

Bond, a Will and a receipt for Rs.14,50,000/-

which he had received on 1.10.2004 itself in

favour of defendant No.1. The Plaintiffs

executed another General Power of Attorney

and Special power of Attorney in favour of

defendant No.1, at USA where they are

residing, duly notarized by Indian Embassy at

USA on 18th March, 2005.

(e) Defendant No.1 entered into two separate

agreements to sell dated 26.5.2006 for sale of

the half portion of the plot in dispute in favour

defendant No.2, his wife for a total

consideration of Rs.21,00,000/- each (total

Rs.42,00,000/-) by virtue of Power of Attorney

dated 18th March, 2005.

(f) Plaintiff No.1 revoked the Power of Attorney

dated 1.10.2004 in favour of defendant No.1

vide revocation deed dated 30th May, 2007

and Plaintiff No.2 revoked the Power of

Attorney dated 1.10.2004 on 31st July, 2007

duly attested by Assistant Consular Officer,

Consulate General of India, New York.

9. Mr. B.T. Singh, Advocate appearing for the Plaintiffs

has argued that the earnest money for a sum of

Rs.20,12,500/- for the purchase of the suit plot was

paid to DDA out of the joint resources. Since the

plaintiffs had to travel abroad in connection with his

business, defendant No.1 taking advantage of the

circumstances prevailed upon the plaintiffs to leave

with him some signed blank papers and also

executed a GPA in his favour so that plaintiffs

interest in the property jointly owned by them could

be taken care of and management properly done. It

is submitted that Section 17 of the Registration Act

requires that all documents relating to immoveable

property, in case they contain a clause

extinguishing a right in such property, have to be

compulsorily registered and also receipts

acknowledging consideration on account of such

extinction of right have to be compulsorily

registered. None of the documents dated

1.10.2004, which have been fabricated by

defendants No.1 and 2, are registered and therefore

those documents cannot be looked into by the court

while deciding this application as they are

inadmissible in evidence. The receipt which is

shown to have been notarized was not actually

notarized on 1.10.2004 which could be seen after

summoning the record of the concerned Notary Shri

R.P. Gupta, Advocate.

10. It is emphasized that since DDA has refused to

accept the Power of Attorney dated 1.10.2004, the

plaintiffs had to execute a GPA and SPA on 18th

March, 2005 on the basis of which a Lease Deed

was executed by DDA on 22nd June, 2005 and

therefore the earlier Power of Attorney and other

documents executed on 1.10.2004 became non

actionable.

11. It is further argued that apprehension of the

plaintiffs that defendant No.1 would sell away the

property is proved to be true in view of the two

agreement to sell executed by defendant No.1 in

favour of his wife defendant No.2 on 26.5.2006 and

that since the interest of the four parties to the suit

as co-lessees are indivisible and they hold

impartible lease hold ownership rights, the

transactions of sale were in violation of terms of the

Perpetual Lease. No permission was obtained from

DDA and defendant No.2 could not have possessed

Rs.40,00,000/- on the date of the transaction. It

being a same transaction, Plaintiffs liability as

guarantor for the loan is still subsisting. Had the

plaintiffs really intended to relinquish their right in

the property in 2004, subsequent execution of

Power of Attorney dated 18.5.2005 by them was

invalid and could not have been invoked by

defendant No.1 for selling plaintiffs half share in the

property in favour of defendant No.2.

12. It is further argued that Defendant No.1 failed to

inform about his entering into agreement to sell

their share of the plot in suit in favour of his wife

defendant No.2 and the said two agreements have

been executed without the knowledge of the

plaintiffs. It is emphasized that since plaintiffs have

a right in the suit property and the Power of

Attorney executed in favour of defendant No.1 has

been revoked the balance of equities tilt in favour of

the plaintiffs. The Plaintiffs would suffer irreparable

loss and injury if their interest in the property is not

protected. Hence, it is prayed that the interim order

of this court dated 17th August, 2007 be made

absolute.

13. Mr. Sandeep Sethi, learned senior counsel for

defendants No.1 and 2 has argued that on

persistent harassment and pressure of the plaintiffs

the defendants made the plaintiffs as the co-sharer

to join in the successful bidding of the plot and the

entire earnest money was deposited by defendant

No.1 from his own personal resources. Defendant

No.1 has been paying the installments for

repayment of the loan amount of Rs.44,27,000/-

which was got sanctioned by the parties from the

Citibank for payment of the balance consideration

amount to the DDA. Plaintiffs were also shown as

co-borrowers. Plaintiffs contributed a sum of

Rs.14,50,000/- but subsequently they started

harassing the defendants and insisted to sell the

said property. It is argued that because of this

harassment, plaintiffs were repaid their amount of

Rs.14,50,000/- and MOU along with a Will, receipt,

Indemnity Bond, etc. were executed by the plaintiffs

in favour of the defendants thereby relinquishing

their half undivided share in the property in favour

of defendant No.1. A General Power of Attorney

along with Affidavit was also executed on 1.10.2004

by plaintiff No.1 in favour of defendant No.1

granting him all rights including but not limiting to

sale of the said property.

14. It is further argued that the MOU regarding a family

settlement does not fall within the ambit of Section

17 of the Registration Act and is not compulsory

registrable. The Plaintiffs withheld the necessary

documents and facts from the court while seeking

interim relief. It is further argued that the

installments of the loan amount were being paid

from the account of the Wall Décor in the Bank of

Rajasthan, the sole proprietorship of defendant No.1

and defendants have already paid substantial loan

amount to the bank whereas the plaintiffs have not

paid any installments to the bank. Once plaintiff

No.1 has admitted having executed a GPA, he

cannot be allowed to deny the rest of the

documents executed on the same day. It is argued

that plaintiffs have fled to USA with a view to avoid

their arrest and not for any business reasons. The

defendants are in need of a house because of their

mentally retarded child as at present they are

residing on the third floor which is not conducive to

the said needs of their son. The defendants also

claim that they have already obtained sanctioned

plan for the construction of the suit property.

15. It is emphasized by the learned counsel for the

defendants that Power of Attorney dated 18th March,

2005 empowers defendant No.1 to sell, mortgage,

gift or release the said property in any manner. It

is also pointed out that the suit is not properly

valued for purposes of court fee as the plaintiffs had

valued the half demarcated share of the suit

property at Rs.27,50,000/- and as per their own

admission, the suit property is atleast of the value

of Rs.1.5 crores and that too in the year 2004. It is

also argued that no prior permission as

contemplated by Clause 4 (a) of the Lease Deed is

required for an inter-lessee transfer of the suit

property, the application, therefore, is devoid on

merits and deserves dismissal.

16. The Plaintiffs though have claimed themselves to be

owner of 50% share of the suit property having

purchased the same jointly with defendants in an

open auction held by DDA for a total consideration

of Rs.80,50,000/-. Perusal of the plaint indicates

that plaintiffs have no where disclosed as to how

much money was contributed by them for the

purchase of the said plot, especially when

defendants have categorically taken a stand that

the entire plot was purchase by them from their

own money. During the course of arguments it is

stated that the amount of Rs.20,12,500/- for the

earnest money was paid to the DDA out of joint

resources. The plaint lacks material particulars.

Even the reply of the application under Order 39

Rule 4 CPC lacks particulars about the alleged joint

resources and also who was responsible for

handling the said joint resources.

17. It is not the case of the plaintiffs that they were

doing business with defendant No.1 or were having

any common resource of income. There are

sufficient documents to show that the sale

consideration amount was paid by the defendants.

The balance amount of sale consideration was paid

after obtaining loan from Citibank by the parties

jointly. According to the defendants the

installments are being paid by them from the firm of

defendant No.1. Admittedly, the plaintiffs have not

made payment of any single installment towards

the loan amount. He has tried to allege that he was

only a guarantor. The fact remains he being the

joint owner of the property was a joint borrower of

the loan and equally responsible to pay installments

to the bank to clear of the property from the

mortgage.

18. It is admitted case of the parties that Rs.14,50,000/-

were contributed by the plaintiffs for the purchase

of the suit property. This money was received back

by the plaintiffs as is evident from the receipt dated

1.10.2004. Prima facie, therefore, it is clear that

plaintiffs did not contribute any money for payment

of the sale consideration of the suit property.

19. Besides Power of Attorney, which is a registered

document executed by plaintiff No.1 in favour of

defendant No.1 on 1.10.2004, plaintiff No.1 does

admit his signatures on the other documents

namely, MOU, receipt for Rs.14,50,000/-, Indemnity

Bond, a Will, Affidavit along with Power of Attorney

executed on 1.10.2004 only. It is not the case of

the plaintiffs that the defendants had got his

signatures on some blank papers. He himself has

averred in the plaint that besides Power of Attorney

he had also executed Special Power of Attorney and

Letters of Authorization in favour of defendant No.1.

Defendants have placed on record copy of Affidavit

dated 1.10.2004 sworn in by Plaintiff No.1. This

affidavit confirms execution of various documents

like Power of Attorney, Indemnity Bond, Will etc. by

Plaintiff No.1 in favour of defendant No.1. Plaintiff

No.1 also admitted having executed Memorandum

of Understanding dated 1.10.2004 between the

plaintiffs and defendants in respect of the suit

property.

20. As per the terms contained in MOU, the plaintiffs

have agreed to relinquish their half undivided share

in the suit property in favour of defendants on

receipt of sum of Rs.14,50,000/- in full and final

settlement. The defendants were made liable to

pay balance cost along with interest to the bank for

which plaintiffs were not liable and responsible.

With the result defendants made payment of the

loan installments to the bank regularly without even

calling upon the plaintiffs to pay a single

installment. A joint owner or co-sharer of the

property is expected to pay half of the loan.

21. Prima facie all these documents indicate that since

plaintiffs wanted to settle in USA, they had no

intention to keep their interest in the suit property

alive and, therefore, they did not invest any money

for the purchase of the plot; rather executed aboved

noted documents on 1.10.2004.

22. By virtue of Power of Attorney dated 1.10.2004

plaintiffs authorized defendant No.1 to sell their

share in the suit property in whole or in part or

execute the Sale Deed, present the same for

registration, admit the execution, receive the

consideration amount, issue receipt and get the

same registered and also to transfer the share of

the plaintiff in the suit property in whole or in part,

to sell, gift, mortgage or release or otherwise and

execute relevant documents and papers, get the

same registered with the competent registering

authority. Besides, defendant no.1 was also given

other rights to deal with the property in his own

way.

23. Even if the submissions of the plaintiffs made for

the first time during the course of arguments while

seeking vacation of the stay order that defendant

No.1 had got some blank papers signed from him

which he subsequently forged in his favour is

considered, execution of Power of Attorney dated

18th March, 2005 at USA by the plaintiff belies his

own case. This Power of Attorney executed by both

the Plaintiffs was attested by Ramesh Chand,

Assistant Consular Officer, Consulate General of

India, New York. By virtue of this Power of Attorney,

the plaintiffs authorized defendant No.1 to sell the

suit plot whole or in part, gifts, mortgage, release or

otherwise, to execute the Sale Deed or any other

relevant docuemnt, to present the same for

registration, to admit the execution, to receive the

consideration amount, to issue receipt and to get

the same registered with the competent registering

authority. Not only this, defendant No.1 was also

authorized to apply and obtain permission to sell in

respect of the said plot of land from the Delhi

Development Authority or any other concerned

authority and execute the requisite documents.

Besides, defendant No.1 was also given all the

powers to deal with DDA and other authorities for

the execution of the documents for construction of

the property, etc.

24. Perpetual Lease Deed dated 22nd June, 2005 has

been signed by defendant No.1 for himself as well

as for and on behalf of the plaintiffs as their Power

of Attorney holder.

25. Revocation Deed dated 24th May, 2007 speaks

specifically of revocation of Power of Attorney dated

1.10.2004. True that, there is one line inserted at

the end of the document saying all other Power of

Attorneys signed and thereafter attested in USA

also stands revoked. The fact remains, Power of

Attorney dated 18th March, 2005 does not

specifically finds mention in the revocation deed.

Be that as it may, the merits of the case are not to

be looked into by this court at this stage. Only the

prima facie case has to be seen.

26. Two agreements to sell dated 26th May, 2006 were

executed by defendant No.1 in favour of defendant

No.2 much before the revocation of Power of

Attorneys. Therefore, prima facie at the time when

these two agreements were entered into between

the defendants, defendant No.1 had all the

authority to sell the share of the plaintiffs in favour

of anyone including defendant No.2. Perusal of the

agreements to sell indicate that defendant No.1

referred to Power of Attorney dated 18.3.2005

which authorized him as an attorney of the plaintiffs

to sell the property. Power of Attorneys dated

1.10.2004 and 18.3.2005 respectively are

Irrevocable Power of Attorneys.

27. Whether these attorneys could be revoked is a

question which is to be considered by the court at

the relevant stage while deciding the case on

merits.

28. Similarly, as regards compulsory registration of

MOU dated 1.10.2004 and other connected

documents by virtue of Section 17 of the

Registration Act is a question to be decided on

merits of the case at the relevant stage. Learned

counsel for defendant No.1 has referred to various

judgments to emphasis that MOU being a family

settlement did not need compulsory registration. I

need not go through these judgments at this stage

because any observations of the court at this stage

on this issue is likely to prejudice the rights of the

parties on merits of the case.

29. As regards valuation of the suit for purposes of

court fee and jurisdiction, again this shall be

considered at the relevant stage being a mix

question of law and facts.

30. Defendants in categorical terms stated in their

application that they have no intention to sell the

property but intend to raise construction on the

same as they need house because of their mentally

retarded son as at present they are residing on the

third floor of the house where they always have

sense of insecurity for the child who does not know

the consequences of his movements.

31. Under these circumstances, balance of convenience

tilts in favour of the defendants. The plaintiffs have

settled abroad and it is the defendants who are

deprived of the fruits of the property in which

admittedly they have half share if not full.

32. In view of my discussion as above and also

considering the defendants' statement made in the

application as well as at the time of arguments of

the case that they have no intention to sell the

property, to the contrary they intent to construct a

house on the same, I find no merits in the

application of the plaintiff seeking temporary

injunction, apprehension of the plaintiffs being

without any basis.

33. Hence, IA No.9240/2007 (Order 39 Rule 1 & 2 CPC)

filed by the plaintiffs is hereby dismissed. IA

No.11548/2007 (Order 39 Rule 4 CPC) filed by

defendants No.1 and 2 is allowed. Ex-parte ad

interim order of this court dated 17th August, 2007

is hereby vacated.

34. It is made clear that this order has no reflection on

the merits of the case and is without prejudice to

the rights of the parties.

CS (OS) No.1480/2007

Be listed before the regular Bench on 31st July,

2009.

ARUNA SURESH (JUDGE) JULY 27, 2009 vk