Delhi High Court

Sunil Chopra & Anr. vs M/S. Zamil New Delhi ... on 23 September, 2009

Author: Manmohan Singh

*          HIGH COURT OF DELHI : NEW DELHI


+    IA No.3331/2009 & IA No.6232/2009 & IA No.6237/2009
     in CS (OS) No.480/2009

                      Judgment reserved on:      1st September, 2009

%                     Judgment decided on :        23rd September, 2009

Sunil Chopra & Anr.                                ......Plaintiffs
                      Through: Mr. Sudhanshu Batra, Adv. with
                               Mr. Bhuvan Gugnani, Adv.

                      Versus

M/s. Zamil New Delhi Infrastructure Pvt. Ltd.      .....Defendant
                    Through: Mr. Sandeep Prabhakar, Adv. with
                                Mr. Amit Kumar and Mr. Ravi Kumar,
                                Advs.

Coram:

HON'BLE MR. JUSTICE MANMOHAN SINGH

1. Whether the Reporters of local papers may
   be allowed to see the judgment?                                 No

2. To be referred to Reporter or not?                              Yes

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


MANMOHAN SINGH, J.

1. By this order, I shall dispose of three applications being I.A.

No.3331/2009 filed by the plaintiffs under Order 39 Rules 1 & 2 of

Code of Civil Procedure, 1908, I.A. No.6237/2009 filed by the

defendant under Order 39 Rule 4 CPC seeking vacation of the ad

interim injunction order dated 13 th March, 2009 and I.A. No.6232/2009

filed by the defendant under Order 7 Rule 11 CPC for rejection of the

plaint.

2. Brief facts are that the plaintiffs have filed the present suit

for mandatory injunction praying that a decree be passed against the

defendant with a direction to register the Lease Deed dated 5th

September, 2008 in terms of the covenants contained in the Letter of

Intent dated 21st August, 2008.

3. The case of the plaintiffs is that in the month of August, 2008

the plaintiffs were approached by the defendant through one property

dealer for taking the suit premises on rent. After negotiations between

the parties, the defendant agreed to take the suit premises on rent and

thereby issued a Letter of Intent dated 21 st August, 2008 which is duly

signed by the plaintiffs and the defendant for a period of five years at a

monthly rent of Rs.3,45,342/- i.e. @ Rs.150/- per sq. ft. + service tax.

4. After issuing the Letter of Intent as aforesaid, the defendant

paid two months rent i.e. Rs.6,90,684/- in favour of the plaintiffs which

was adjusted towards the security deposit. The exit clause provided

three months notice after the expiry of 24 months locking period from

the effective period i.e. 1st October, 2008.

5. The plaintiffs contended that in view of the Letter of Intent,

they completed the interior work which was under progress and made all

necessary changes as per the requirement of the defendant and in the

said process, they incurred about Rs.20 lakhs expense for the same. On

5th September, 2008 a Lease Deed on the stamp paper of Rs.66,000/-

was duly executed between the parties. The plaintiffs handed over the

possession of the suit premises to the defendant on 1st October, 2008

and thereafter the defendant started paying rent to the plaintiffs in terms

of the said Lease Deed.

6. The plaintiffs requested the defendant a number of times to

complete its part of the obligation by registering the said Lease Deed in

terms of covenants i.e. Clause 8(vii) but on one pretext or the other, the

defendant failed and neglected to do so. Therefore, the present suit was

filed by the plaintiffs against the defendant.

7. As per the relief prayed for registration of the Lease Deed

dated 5th September, 2008 in the suit, the plaintiffs have also filed an

application under Order 39 Rules 1 & 2 CPC being I.A. No.3331/2009

and ex parte ad interim injunction was issued on 13 th March, 2009

directing that the defendant shall continue to act upon the terms and

conditions contained in proposed Lease Deed dated 5 th September,

2008.

8. The defendant filed its written statement as well as an

application being I.A. No.6232/2009, under Order VII Rule 11 r/w

Section 151 CPC and another application being I.A. No.6237/2009

under Order 39 Rule 4 CPC for vacation of the abovementioned ex-parte

interim injunction.

9. The main contention of the defendant is that the suit filed by

the plaintiffs for injunction is specifically barred under Section 14(1)(c)

r/w Section 41(h) of Specific Relief Act, 1963. It has been contended

that the Lease Deed provides a termination clause and any such contract

which is by its nature determinable cannot be specifically enforced

under Section 14(1)(c) of Specific Relief Act, 1963.

10. It has been further contended by the learned counsel for the

defendant that the Lease Deed provides for the amount of rent as well

as for the interest to be charged in case of any delay or breach or non-

performance of any terms and conditions of the lease deed, therefore,

compensation can be claimed in case of default and is an adequate relief.

Therefore, no injunction can be granted in view of Section 41(h) of the

Specific Relief Act, 1963.

11. Learned counsel for the defendant has also argued that the

suit filed by the plaintiffs is further not maintainable as there is a proper

and equally efficacious remedy available under various provisions of

Registration Act, 1908 for registration of a lease deed incase the party

which is the executant of the document refuses to register it by having

recourse to the provisions of Section 73 of Registration Act, 1908 which

is a condition precedent for institution of such suit. No relief as claimed

by the plaintiffs in their suit can be passed.

12. In support of his contentions, learned counsel for the

defendant has referred various provisions of the Registration Act. It

has been further argued by the learned counsel for the defendant that

since the present suit is merely a suit for mandatory injunction, it is not

maintainable and the plaintiffs are not entitled to the relief claimed for.

13. Lastly, the learned counsel for the defendant has argued that

the plaint is also liable to be rejected as the suit property is situated in

Gurgaon which is outside the jurisdiction of this court and the same is

liable to be rejected under Order VII Rule 11 CPC for want of territorial

jurisdiction in view of the provisions of Section 16(d) of Code of Civil

Procedure.

14. In view of the above mentioned facts and circumstances, the

questions for determination by this court in order to decide the three

pending applications are summarized as under:-

i) Whether the suit for mandatory injunction or direction to get

the lease deed dated 5th September, 2008 registered is

maintainable ?

ii) Whether the suit filed by the plaintiffs for injunction is

specifically barred under Section 14(1)(c) read with Section

41(h) of the Specific Relief Act in view of the fact that the

lease deed contains a termination clause and as such is a

contract which is by its nature determinable under the Specific

Relief Act ?

15. The main contention of the learned counsel for the plaintiffs

is that the defendant acted contrary to Clause 8(vii) of the Lease Deed

and has not come forward to register the said Lease Deed in view of the

said clause, therefore, the present suit has been filed by the plaintiffs for

mandatory injunction to pass the order against the defendant to register

the Lease Deed dated 5th September, 2008.

16. Learned counsel for the plaintiffs has argued that the

provisions of Registration Act referred by the counsel for defendant are

not attracted in the present matter as for the purpose of registration of

the lease deed, the presence of both the parties i.e. executants are

necessary. Since the defendant has refused to register the document,

this court is empowered to pass the orders in this regard as prayed for.

17. The other submission of the learned counsel for the plaintiffs

is that since the defendant has breached the contract between the parties,

therefore, the plaintiffs are entitled for the relief claimed for in the plaint

as well as for injunction.

18. It is also necessary to look at Section 73 of the Registration

Act which reads as under:-

"Section 73. Application to Registrar where Sub- Registrar refuses to register on ground of denial of execution

73. Application to Registrar where Sub-Registrar refuses to register on ground of denial of execution.-- (1) When a Sub-Registrar has refused to register a document on the ground that any person by whom it purports to be executed, or his representative or assign, denies its execution, any person claiming under such document, or his representative, assign or agent authorized as aforesaid, may, within thirty days after the making of the order of refusal, apply to the Registrar to whom such Sub- Registrar is subordinate in order to establish his right to have the document registered.

(2) Such application shall be in writing and shall be accompanied by a copy of the reasons recorded under Section 71, and the statements in the application shall be verified by the applicant in manner required by law for the verification of plaints."

19. No evidence has been placed on record to show that the

plaintiffs have asked the defendant in writing within the prescribed time

to register the lease deed. In Para 10 of the plaint, it is mentioned that

the plaintiffs wrote an e-mail dated 27th February, 2009 requesting the

defendant to register the lease deed although in Para 9, it is stated that

the plaintiffs requested the defendant many times to complete its part of

the obligation by registering the above lease deed in terms of covenants

contained in Para 8(vii) of the agreement.

20. The defendant has specifically denied the statement made in

para-9 of the plaint. The defendant has argued that the lease deed is

dated 5th September, 2008 and the e-mail was sent by the defendant on

27th February, 2009 which is after the expiry of prescribed period,

therefore, the suit filed by the plaintiffs for mandatory injunction is not

maintainable.

21. Prima facie, this court is not impressed with the submission

of the learned counsel for the plaintiffs that the provisions of Section 73

of the Registration Act are not attracted in the present case for the

purpose of registration of lease deed.

22. As far as rejection of the plaint is concerned, the defendant

has filed IA No.6232/2009 under Order VII Rule 11 CPC contending

that the suit is not maintainable. It is well settled law that at the time of

considering such an application, the court has only to examine

averments made in the plaint.

23. Admittedly, there are positive averments appearing in para 9

of the plaint that the plaintiffs have requested the defendant many times

to complete its part of the obligation for registering the lease deed which

has been denied by the defendant, hence under this situation, the plaint

cannot be rejected. The said statement of fact is yet to be examined at

the appropriate stage of the case, thus, the prayer made in the

application of the defendant under Order VII Rule 11cannot be granted

and the same is rejected.

24. Dealing with the next submission of the defendant, it is well

settled law that when a contract is determinable by the parties, the same

cannot be treated as a contract as is referred in Clause (c) to sub-section

1 of Section 14 of the Specific Relief Act which is by its nature

determinable. Clause (c) of sub-section 1 of Section 14 states that a

contract which is by its nature determinable cannot be specifically

enforced. If it is found that a contract is by its very nature determinable,

the same is not only unenforceable, but in addition, in respect of such a

contract no injunction can be granted in view of Section 41(h) of the

Specific Relief Act. This is a mandate of law.

25. In the case of Techno Construction and Anr. Vs. Kunj

Vihar Co-operative Group Housing Society Ltd., 2005 (81) DRJ 233

it was held as under:

"9.........The first question requiring consideration is, whether the contract for construction of building can be ordered to be specifically enforced? Section 14(1)(a) of the Specific Relief Act, 1963 provides hat a contract for non-performance, of which compensation in money is adequate relief, cannot be specifically enforced. In a suit for enforcement of contract for construction of a building, the party seeking specific performance of the contract has to satisfy three conditions, contained in proviso to clause (c) of sub-section (3) of Section 14. These are

(i) the building or other work is described in the contract in sufficiently precise terms to enable the court to determine the exact nature of the building or work. (ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for non- performance of the contact is not an adequate relief; and (iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed. In short, before a construction contract can be ordered to be enforced, it has to be held that compensation in money is not the adequate relief. It cannot be disputed that where a contract which cannot be enforced by a decree for specific performance, the same cannot be negatively enforced by issue of an injunction."

26. In the case of Usha Sales Ltd. vs. Aruna Gupta, ILR

(1988) 1 Del 103 it was held as under :

"The right of the statutory tenant flows not from a contract but from a statute. The question is not whether an injunction can be granted to specifically perform a term of a contract or not and the provisions of Sections 14, 16 and 41 of the Specific Relief Act have therefore no relevance of application. The statutory tenant enforces his right under the statute and not under the contract. Ss. 14 and 16 of the Specific Relief Act, 1963 pertain to the specific enforcibility of a contract and not of a statutory right. S. 41(e) on which reliance has been placed by the defendants also talks of a contract. There is no bar with regard to the enforcement of such right to property and, particularly, such right flowing from a statute. (Paras 14 & 15)"

27. In the case of B.S.M. Contractors Pvt. Ltd. vs. Rajasthan

State Bridge & Construction Corpn. Ltd. & Anr., AIR1999 Delhi

117 it was held as under :

"9. On a consideration of the facts and circumstances of the case, I am of the opinion that a building contract of the instant nature cannot be specifically enforced by granting interim relief under Section 9 of the Act. If there is a breach of such a contract, the appropriate remedy is to compensate the party damnified in damages. That apart, the granting of an injunction in favour of the petitioner will further delay the construction work considered very urgent by the respondent No.3. Thus, the balance of convenience also swings against the grant of injunction sought by the petitioner."

28. From the above discussion, it becomes clear that where a

contract is not specifically enforceable as per the clauses stipulated

under Section 14 of the Specific Relief Act, an interim order in the form

of injunction qua such a contract cannot be passed enforcing

negatively.

29. I agree with the contention of the defendant that the plaintiffs

are not entitled to an injunction in view of the fact that the lease deed

provides a determination clause and the same is determinable by nature

and, therefore, cannot be specifically enforced. The plaintiffs are not

entitled to an injunction as prayed for because of the reason that in case

there is a breach for non performance of any term and condition of the

lease deed, compensation can be claimed which is an adequate remedy