Mr . Tilak Raj & Anr vs Mr. Rajendra Kumar & Anr
2009 Latest Caselaw 4317 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                                      Pronounced on: 26.10.2009

+                       I.A.-3371/2009 (O-39, R-1&2), I.A.-11958/2009 (O-1, R-10)
                                    & I.A.-5208/2009 in CS (OS) 484/2009

       MR . TILAK RAJ & ANR                                                    ..... Plaintiffs
                         Through: Ms. Amrita Sanghi, Advocate.

                       versus

       MR. RAJENDRA KUMAR & ANR                                  ..... Defendants
                      Through: Mr. Vikas Dhawan, Advocate.
                      Mr. Ravi Gupta, Sr. Advocate with Mr. Ankit Jain, Advocate for
                      applicant in I.A.-11958/2009.

CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT

1.

     Whether the Reporters of local papers                    Yes
       may be allowed to see the judgment?

2.     To be referred to Reporter or not?                       Yes

3.     Whether the judgment should be                           Yes
       reported in the Digest?

HON'BLE MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)

%

1. This order proposes to dispose certain pending applications. The undisputed position

emerging from the pleadings may be briefly stated as follows.

2. The first plaintiff (who subsequently died during the course of the proceedings and is

hereafter referred to as "Late Tilak Raj") was concededly the owner of various properties and

held extensive interest in the business of M/s Diwan Chand & Sons Ltd. These included, inter

alia, ground floor of W-48A, Greater Kailash-II, New Delhi, a plot measures 836.13 Sq. mtrs.

That property also has a first floor with half constructed second floor. The parties are ad idem as

to a family settlement arrived at on 7.1.2008 which was recorded in writing on 12.1.2008. The

IA NO. 3371/2009, 5208/2009 and 11958/2009 IN CS(OS) 484/2009 Page 1 terms of the family settlement in its material particulars briefly were that: -

(i) Tilak Raj was to execute and register transfer papers/sale deed in respect of the ground

floor with servant quarters of the said property in favour of the first defendant and his

wife (hereafter referred to as "Rajendra" and "Ravesh").

(ii) The first floor and further rights in respect of the constructed portion of the second floor

and roof rights were owned by the second plaintiff - Vikram Kumar (referred to as

"Vikram") and his family members. The plan was attached to the documents.

(iii) By clause-F, the parties stipulated that in the event the property was sold to an outsider,

the sale proceeds were to be divided between the VIkram third party on the one hand and

Ravesh on the other in the manner spelt-out. The said stipulation also contained a

preemption clause entitling either of the co-owners, i.e., Vikram, and the defendants to

purchase the property in the event of the proposed sale.

(iv) The 45% share in GL-7A measuring 300 Sq. Ft. lower ground floor commercial property

in Ashoka Estate building, Barakhamba Road was to devolve in equal shares upon the

two brothers i.e. Vikram and Rajendra.

(v) Tilak Raj owned 15% share of the ground floor and basement of the property - M-10,

Greater Kailash-II which had been rented out for Rs.75,000/- per month. It was agreed

that 1/3rd of the said rent with proportionate property rights was to be enjoyed by the

Rajendra family (through Ravesh) and the rest i.e. 2/3rd was to enjoyed by the Vikram

family branch (though his wife Mrs. Anita Phalpher, applicant in I.A.-11958/2009 and

referred to as "Anita" hereafter).

(vi) In terms of clause L - Q, the business with assets and liabilities concerned of late Tilak

Raj were to be taken over by Vikram, who was also to bear a liability to the extent of Rs.

IA NO. 3371/2009, 5208/2009 and 11958/2009 IN CS(OS) 484/2009 Page 2 One crore, a lien created in favour of State Bank of Indore.

3. A registered sale deed was executed on 14.1.2008, which expressly stated that it was in

effectuation of the family settlement dated 12.1.2008. The document conveyed right title and

interest in respect of the ground floor portion to Rajendra for a consideration of Rs.1.28 Crores.

The plaintiffs allege that the consideration agreed upon in the sale deed was never paid by

Rajendra. They consequently approached this Court seeking an injunction to restrain Rajendra

from transferring or parting with possession of the said ground floor portion. It had also been

alleged that Rajendra was trying to sell the ground floor property, and an attempt to enforce the

pre-emption clause, met with a response that the said property could be sold for Rs. 11.5 crore,

an exorbitant demand. Initially interim order was refused which led to the plaintiff approaching

the Division Bench. The latter by its order dated 30.03.2009 indicated that Rajendra and Ravesh

should not encumber property or create any third party rights, and required the single judge to

decide the interlocutory applications. It is a matter of record that the said defendants were not

heard and apparently the plaintiffs' appeal was disposed of on the same date.

4. In the above circumstances, when the case was listed on 24.04.2009, this Court heard

counsel for the parties. The Court was of the opinion that the statement of late Tilak Raj required

to be recorded. Accordingly, he was summoned to appear in the Court, which he did on

30.04.2009. The statement recorded on that date reads as follows: -

"STATEMENT OF SHRI TILAK RAJ SON OF SHRI DIWAN CHAND, R/O W-48-A, GREATER KAILASH PART II, NEW DELHI-110048, AGED ABOUT 87 YEARS, PLAINTIFF, ON SA: -

The ground floor of the property has not been sold by me to my elder son. It was rather given to him for the purpose of residence. I had not executed any sale deed in respect of the ground floor of the property in favour of my son. Whatsoever consideration was received by me was returned by me to my son. The amount was returned about five to six months back. The receipt on a stamp paper of Rs.50/-

was executed by me about five/six months back. When I had signed the receipt

IA NO. 3371/2009, 5208/2009 and 11958/2009 IN CS(OS) 484/2009 Page 3 dated 20th January, 2008 no amount was received by me. The receipt, Exhibit P1, is signed by me. The receipt is also in my handwriting.

I have not filed any suit in any court. The plaint in the present case is, however, signed by me. I do not remember at whose instance I had signed the plaint. The contents of the plaint were not read over to me nor I had read the same. The ground floor of the property has been rented out by my elder son and he is getting a rent of Rs.2.50 lakh per month. He has shifted to Gurgaon."

5. The plaintiffs, through Ms. Amrita Sanghi, their counsel, contend that this Court should

with a view to protect their interest in the property - since Tilak Raj has now died, during the

pendency of the present Suit, pass an appropriate order injuncting the defendants from creating

any third party rights or encumbering the property. It is emphasized that the documents on the

record as well as the statement of Tilak Raj clarify that the amount of Rs.1.28 Crore was never

received and that consequently the document styled as a sale deed is not binding and an

appropriate declaration or cancellation has to be made. Learned counsel relied upon the judgment

reported as V.A. Tech Esheer Wyss Flovel Ltd. v. Nippon Power Ltd. & Ors. 2002 62 DRJ 502 to

contend that if a contract is not supported by consideration, it is void and unenforceable. As the

matter has been tried and ultimately the Court has to consider the merits of the case, it would be

appropriate that the property is preserved and defendants are restrained through an appropriate

injunction.

6. The defendants, Rajender and Ravesh contend that the plaintiffs do not deny the

execution of the family settlement which expressly states that the ground floor portion of the

Greater Kailash property was to vest in them. It is submitted that the said document significantly

does not mention any consideration. Mr. Vikas Dhawan, defendants' counsel, relied upon the

late Tilak Raj's statement, recorded by the court and argued that the Suit was never authorized

by him and that he conceded to returning the amount received by him to his son (i.e. Rajendra).

Reliance is also placed on that part of the statement of Tilak Raj that the receipt on a paper was

IA NO. 3371/2009, 5208/2009 and 11958/2009 IN CS(OS) 484/2009 Page 4 executed by him and that Ex.P/1 a receipt (dated 21-1-2008) for having received Rs. One lakh (in

lieu of the cheque for Rs. 1.28 crores) has been placed on the record.

7. The defendants submit that an overall reading of the family settlement would indicate

that the younger son i.e. Vikram was given the first floor, second floor and further roof right in

respect of the Greater Kailash property; it is contended that Vikram and his wife were given a

major share in the assets of the Late Tilak Raj as they were entitled to 2/3rd share of the

commercial property at M-10, Greater Kailash market (in which the father had 15% share, and

was fetching a monthly rental of Rs. 75,000/-). It is submitted that Vikram also was given the

entire business of Late Tilak Raj. Learned counsel emphasized that late Tilak Raj in his

statement clearly submitted not having filed the Suit and not being aware of it.

8. The defendants also submitted that the plaintiffs were fully aware about the leasing of the

suit property on 14.11.2008 despite which they neither complained nor protested. The

defendants contend that the offer made to Vikram, to sell the Greater Kailash property for

Rs.11.5 Crores was a fair market price and that the premises would fetch amounts in excess of

that sum. It was submitted that in these circumstances, granting any interim order of the kind

sought would be highly inequitable and would unduly burden the defendants.

9. The defendants also opposed the application of Ms. Anita- I.A.-11958/2009 and submit

that the reliance placed upon the gift deed dated 30.09.2005 by Late Tilak Raj in respect of

portion of a ground floor cannot be of any avail since Anita was a party and signatory to the later

family settlement of 12.01.2008.

10. Learned Senior counsel for the applicant in I.A.-11958/2009 submitted that Mrs. Anita is

a necessary party since concededly the Late Tilak Raj had gifted the front half portion of the

ground floor by registered deed dated 30.09.2005. He relied upon a copy of the said gift deed

IA NO. 3371/2009, 5208/2009 and 11958/2009 IN CS(OS) 484/2009 Page 5 and submitted that the sale deed dated 14.01.2008 relied upon by Rajendra and Ravesh,

therefore, cannot be of any avail. It is submitted that once title to the front portion of the ground

floor vested in Anita by virtue of the gift deed, which has remained unchallenged till date, the

Late Tilak Raj could not have sold the very same property through the registered sale deed dated

14.01.2008.

11. Late Tilak Raj, when he approached the Court was of advanced age; concededly he was

about 87 years. The parties do not dispute certain essential facts such as existence of a family

settlement, arrived at on 07.01.2008; its being reduced into writing on 12.01.2008 and pursuant

to such settlement, the execution of a registered sale deed is dated 14.01.2008. The terms of the

settlement clarify that the ground floor portion of the Greater Kailash property was to be owned

by Rajendra and Ravesh. The relevant stipulation in the family settlement merely stated that

transfer documents would be executed; there was no explicit mention of any sale consideration.

The family settlement also recorded that:

(1) Vikram was the owner of the first floor and the partly constructed second floor as

well as terrace rights of the same property.

(2) Pertinently, the settlement mentions about the property to which late Tilak Raj

had title or interest, i.e., ground floor of the W-Block (Greater Kailash property); a

commercial property - M-10, Greater Kailash; and the Barakhamba Road flat. Besides

these, the business, its assets and liabilities in which Late Tilak Raj had any interest were

to be exclusively that of Vikram.

12. Shri Tilak Raj's statement recorded on 30.04.2009 mentions that he did not intend to sell

the ground floor of the property to Rajendra; he denied executing any sale deed. In the same

statement, however, he stated that whatever consideration was received by him was returned

IA NO. 3371/2009, 5208/2009 and 11958/2009 IN CS(OS) 484/2009 Page 6 "about five or six months back". He even mentioned about a receipt on a stamp paper dated

21.01.2008. However, he clarified that no amount was received by him. Tilak Raj also stated

that the plaint in the Suit had not been signed by him and later mentioned that he did not

remember at whose instance he signed the plaint. All this prima facie present a confusing

picture because the Suit seeks a declaration that the sale deed is a nullity and further claims its

cancellation. In the same breath, Tilak Raj states that the Suit was not filed by him. Similarly,

after asserting that he did not signed the sale deed, he states that whatever consideration was

received by him was returned to Rajendra and that a receipt was executed on 20.01.2008. He

admits the receipt Ex./P-1, which mentions payment of Rs.1,00,000/- (to him), yet denies that

any amount was received by him.

13. It is prima facie evident that the Late Tilak Raj either due to old age or for some other

medical reasons was unable to recollect what transpired earlier or was not aware of what he was

doing. In these circumstances, it would be unsafe to place much significance on what he stated

in the Court.

14. A reading of the family settlement discloses that the ownership of the ground floor was to

vest in Rajendra; his wife Ravesh was entitled to 1/3rd share of the M-10, Greater Kailash

commercial property, and proportionate rental rights. Apparently, the other floors of the

residential (W-48A) property belonged to Vikram; his wife was entitled to 2/3rd share in the

rental proceeds of the M-10 commercial property and similar share of that property rights.

15. Clause-A of the family settlement which speaks of ground floor of W-48A, Greater

Kailash property significantly does not mention any sale consideration payable to Late Tilak Raj;

it clearly states that the transfer papers in respect of the ground floor with servant quarter in

accordance with the plan annexed to the family settlement were to be signed by him (Late Tilak

IA NO. 3371/2009, 5208/2009 and 11958/2009 IN CS(OS) 484/2009 Page 7 Raj). The said document also clarifies to Clauses S & T that its terms are binding upon all

members of the family. None of the parties to the present suit dispute the family settlement. The

sale deed - cancellation of which is sought in this Suit, also clarifies that it is in furtherance of

the family settlement. The entire basis of the Suit is that the conditions in the sale deed as regards

payment of Rs.1.28 Crores were not satisfied and consequentially that document has to be

cancelled. The Suit nowhere alleges that apart from the mention of that consideration in the sale

deed itself (which concededly was executed pursuant to Clause-A of the family settlement), there

was any obligation upon the defendants to make any such payment either in terms of the

settlement or otherwise.

16. Interestingly, plaintiffs are relying upon another earlier document i.e. partition deed dated

13.08.1998 to which Late Tilak Raj and Vikram were parties. Through that document, Vikram

was to be exclusive owner of the first floor, second floor and terrace with terrace rights together

with northern driveway with separate and exclusive entry gate to the W-Block, Greater Kailash

property. Tilak Raj was thus left with only the ground floor which became among other assets

the subject matter of the family settlement.

17. If one were to keep in mind all these admitted facts what emerges is that the Late Tilak

Raj wanted to settle his affairs since he was of an advanced age; the family settlement dated

12.01.2008 was arrived at with this objective. It conferred exclusive ownership of the ground

floor upon the defendant Rajendra - concededly Vikram was owner of the rest of the property.

The other properties were, however, divided in a different manner; Vikram was also given the

business with their assets and liabilities.

18. Having regard to the overall conspectus of the facts on the record, the Court is of the

opinion that it is for the plaintiffs to establish that the sale deed could not and did not convey the

IA NO. 3371/2009, 5208/2009 and 11958/2009 IN CS(OS) 484/2009 Page 8 title as they now allege. That it is in effectuation of a valid and binding family settlement as

admitted by all. That the defendant Rajendra Kumar got possession of the ground floor is also

not denied as well as the fact a lease deed to a third party in November, 2008. In these

circumstances, the Court should be careful in interdicting the parties in the operation of a family

settlement by importing its own notion of what is fair and equitable. As long as a family

settlement is shown or established and its terms are not unlawful, the Courts could not look or

scrutinize into their terms too closely to determine their rights and wrongs to the parties.

19. Undoubtedly, Section-25 of the Contract Act stipulates that a contract without

consideration is void. However, here if one sees the sale deed as an effectuation of the family

settlement (which in turn does not require payment of any amount by Rajendra to the late Tilak

Raj), the question of any payment being made prima facie does not arise. The situation perhaps

could have been different if the plaintiffs had asserted that such amount was payable as a part of

the overall family settlement, though not articulated in writing. However, that is not the case

here.

20. The above prima facie observations would under normal circumstances have been

conclusive for a determination of the interim injunction application. However, the court cannot

be oblivious to a stipulation in the sale deed, as well as conditions admitted by the parties, i.e a

kind of right of pre-emption, in the event property is to be sold. If the sale deed were executed, as

is understood by all parties, as part of the overall family settlement, the defendants were duty

bound to first offer to sell the ground floor, and indicate a price. The cost indicated by them is

alleged to be exorbitant. In these circumstances, even if the claim, at present relates to

cancellation of the sale deed, the court cannot be blind to the possibility of the defendants - if

left to their own resources, proceeding ahead, and disposing of the property, defeating the

IA NO. 3371/2009, 5208/2009 and 11958/2009 IN CS(OS) 484/2009 Page 9 concededly binding pre-emptive terms. In such eventuality, the plaintiff would have to also

initiate further legal proceedings. The suit does aver that the offer to sell, made by the

defendants was based on a wholly unjustified price. In these circumstances, the court is of

opinion that the overall circumstances require that an interim order is called for, to avoid

irreparable injury.

21. As regards the application of Anita, the Court is of the opinion that since she is setting up

a case of some kind of interest, in the W-block Greater Kailash property, she has to be impleaded

in the Suit. However, at this stage itself it would be relevant to notice that she was the signatory

of the memorandum of family settlement dated 12.01.2008.

22. In the light of the above discussion, the defendant is hereby restrained, through an ad

interim injunction, from selling, alienating, or encumbering the ground floor of W-48A, Greater

Kailash-II, till disposal of the suit. This will, however, not mean that the present lease

arrangement entered into by him, with a tenant, should be discontinued. The said tenancy can

continue. In the event of its expiry, the defendants are directed to seek permission to let-out the

premises, afresh, if they need to so. The defendants shall also file an affidavit enclosing a copy of

the subsisting lease/rent deed, and disclose the monthly rental received by them; they shall

further undertake to abide by the terms of this order. The affidavit undertaking shall be filed

within three weeks. I.A. Nos.3371/2009, 5208/2009 and 11958/2009 are disposed of in the above

terms.

CS (OS) 484/2009

List the suit on 16.02.2010.

S. RAVINDRA BHAT (JUDGE) OCTOBER 26, 2009 /vd/

IA NO. 3371/2009, 5208/2009 and 11958/2009 IN CS(OS) 484/2009 Page 10