Balraj Taneja vs Rajinder Lal Taneja & Others
2011 Latest Caselaw 239 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                   Judgment Reserved on: 11.01.2011
                    Judgment Pronounced on: 17.01.2011

+           CS(OS) No. 347/2006

BALRAJ TANEJA                                 .....Plaintiff

                           - versus -

RAJINDER LAL TANEJA & ORS.                    .....Defendant

Advocates who appeared in this case:
For the Plaintiff: Mr. Varun Bhandari and Mr. Abhishek Rai
For the Defendant: Mr. Raman Kapur and Mr. Dhiraj
                    Sachdeva for D-1.
                    Mr. Harpreet Singh and Mr. Rajesh Gupta
                    for D-2 to 5.

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

1.

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

2. To be referred to the Reporter or not? Yes

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

V.K. JAIN, J

1. This is a suit for partition of property No. 9-B,

Mathura Road, Jangpura, New Delhi as also for injunction.

Defendants No.1 and 2 are the brothers of the plaintiff,

defendant No.3 is his sister-in-law being the widow of his

brother late Sh. Ashwani Kumar Taneja whereas defendants

No.4 and 5 are children of late Sh. Ashwani Kumar Taneja.

It is an admitted case that late Sh. Raghu Nath Rai was the

owner of property No. 9-B, Mathura Road, Jangpura, New

Delhi. Though it was alleged in para 2 of the plaint that the

suit property is in effect a joint family property and has

been referred to and registered as HUF property, it was

expressly stated by the plaintiff's vide their statement dated

January 11, 2011 that this was the self acquired property of

late Sh. Raghu Nath Rai and no other person or entity had

any right, title and interest therein.

2. It is further alleged in the plaint that a settlement

was reached in the lifetime of late Sh. Raghu Nath Rai,

whereby various portions of the suit property were allocated

to him and his sons. The case of the plaintiff is that the

family settlement, which was reduced into writing vide

Memorandum of Understanding (MOU) dated 26 th June

1996 with a site plan attached to it, can at best be regarded

as a living arrangement, not bestowing any ownership rights

on anyone. Under the MOU, it was agreed that none of the

parties shall sell, transfer or otherwise alienate any part or

whole of the portion in his occupation to any outsider or

create any third part right into it. It is also stated that the

plaintiff and defendants No. 1 and 2 are in actual physical

possession of the suit property as per the portions

earmarked for them in the MOU dated 26th June 1996 and

the site plan attached thereto. Regarding Garage Block of

the property, it is claimed that the same having been given

independently to the son and wife of the plaintiff, does not

form a part of the joint family property. It is further alleged

that defendant No.2 has authorized defendant No.1 to sell

the portion occupied by him and defendant No.1 has

accepted an advance of Rs.50Lacs for the sale of his portion

of the property to a third party. The plaintiff has

accordingly sought a decree for partition of property No. 9-

B, Mathura Road, Jangpura, New Delhi and has also sought

injunction, restraining the defendants from selling,

transferring, alienating or parting with possession of any of

the portion of the property.

IA No. 2208/2006 has been filed by the plaintiff

along with the suit, seeking interim injunction restraining

the defendants from selling, transferring, alienating or

parting with possession of the suit property or any part

thereof during pendency of the suit.

3. The suit has been contested by the defendants. In

their written statement, defendants No.1 and 2 have

claimed that property No.9-B, Mathura Road, Jangpura,

New Delhi was owned solely and exclusively by late Sh.

Raghu Nath Rai, he having purchased and built it with his

self acquired funds. It is further alleged that vide Will dated

21st May 1996 late Sh. Raghu Nath Rai had bequeathed the

suit property in terms of the settlement effected in his

lifetime. The Memorandum of Understanding dated 26 th

June 1996 has been admitted by them and they have

claimed that the property was partitioned by metes and

bounds vide settlement recorded in this document.

Referring to minutes of meeting held on 21st December

2001, it has been alleged that each party to the suit has a

right to sell his share and to deal with it in any manner he

likes. It is also claimed that the plaintiff has advertized in

newspaper for sale of not only his portion but also of the

portion of the defendants. It has, however, not been denied

that defendant No.1 has accepted an advance of Rs.50Lacs

from the third party for sale of his portion.

4. Defendants No. 3 to 5, in their written statement,

have supported the plea taken by defendants No.1 and 2 as

regards ownership of the suit property. They also have

claimed that vide Will dated 21st May 1996, late Sh. Raghu

Nath Rai had bequeathed the suit property in accordance

with the settlement effected during his lifetime and that the

property was divided by metes and bounds vide settlement

recorded in the MOU dated 26th June 1996. IA 13956/2006

has been filed by the defendants for vacating the interim

order dated 24th February 2006 whereby the parties were

directed not to create any third party interest with respect to

title and possession of the suit property.

5. In their statement recorded on January 11, 2011,

the plaintiffs, after seeing the Will dated 21 st May 1996,

which the defendants have filed in this case, admitted its

genuineness as well as validity and stated that they were

not disputing the same. Since the plaintiffs have also

admitted that property No.9-B, Mathura Road, New Delhi

was the self acquired property of late Sh. Raghu Nath Rai

and no other person or entity had any right, title and

interest in it, the property, on the death of late Sh. Raghu

Nath Rai, devolved in terms of the bequest made by the

deceased. In fact there is no difference in the arrangement

incorporated in the MOU dated 26th June 1996 and

disposition of the property under the Will dated 21st May

1996 except to the extent that the Will contains no

restriction on the right of the legatees to deal with their

respective portions, in the manner they desire.

6. In terms of the Will, the Garage Block of the

property was bequeathed to Sachin and Madhu and son and

wife of the plaintiff, as separate from the rest of the house

and is to be held by them independently and in addition to

their rights in the rest of the portion on the eastern side of

the house in the flat which was stated to be in possession of

the plaintiff, Madhu, Sachin and Tanuj (second son of the

plaintiff). The ground floor portion built on the eastern side

was bequeathed to the plaintiff, his wife Madhu, his son

Sachin and Tanuj, who is the second son of the plaintiff.

They were to hold this portion in equal shares with the

condition that Madhu has only life interest in it. The first

floor flat on the eastern side was in occupation of defendant

No.1 Rajender Lal and his family. Barsati floor was stated

to be in possession of the testator, who had reserved for his

son Ashwani. After death of the testator, this flat was to

belong to Rajender, his wife Shalini and their two sons

Varun and Rajat jointly and independently of any of his

other sons and their children.

The first floor flat on the western side and above

the flat on the ground floor, which was in possession of

Prem Pal and his wife Manjula and their son was to belong

to Prem Pal, Manjula and their children and no other child

of the testator or his successor was to have right in this

portion. The ground floor flat on the western side where the

testator and his wife were at that time living was to belong

to Ashwani, his wife Krishna and their two children after the

death of testator and his wife. After the death of testator

and his wife, the Barsati floor was to belong to Rajender and

his family and they were given full rights in the flat, Barsati

and terrace independently of any other heirs.

The grassy plot on the ground floor, which was in

occupation of the testator and was stated to be of the size

88ft x 15ft was not to form part of the flat, which the

testator bequeathed to his son Ashwani and was to belong

jointly and equally to all the six boys, which were grandsons

and they were to be joint owners of this independently of

their rights in any other portion of this house with their

parents. The passage and pucca paths were not to form

part of this item. The entrance to the grassy plot was to be

from road on both sides where there was a wall.

7. It is thus evident that late Sh. Raghu Nath Rai

bequeathed separate portions of the suit property to his

sons and their family members, which were duly identified

not only in the Will but also in the MOU dated 26 th June

1996 and the site plan which formed part of the MOU.

During the course of arguments, the learned counsel for the

plaintiff could not point out any portion of the suit property

which was not subject matter of the bequest made by late

Sh. Raghu Nath Rai. Therefore, this is not a case where the

property was jointly bequeathed to more than one person

without identifying their respective portions. Here, not only

specific portions were bequeathed, they were also identified

in the lifetime of the deceased. As regards the lawn/grassy

plot also a specific bequest was made. Pathways, staircase,

etc. of course have to be jointly enjoined by all the

beneficiaries under the Will. Since the testator himself

divided the suit property while executing the Will dated 21 st

May 1996, it cannot be said that the suit property needs to

be partitioned through intervention of the Court. The

beneficiaries under the Will have become owners of the

portions bequeathed to them and can use their respective

portions without any hindrance from the other co-owners of

the building. The lease hold rights in the land underneath

the building have to remain joint property of all the legatees

and even otherwise are capable of partition. Even the

individual share of the various legatees in leasehold rights

in the land cannot be determined, considering the bequest

made by the testator. Therefore, the plaint does not disclose

any cause of action for filing the suit for partition of

property No.9-B, Mathura Road, New Delhi.

8. Coming to the injunction claimed by the plaintiff,

his case is that since the family settlement contained in the

MOU dated 26th June 1996, to which all the parties are

signatories, stipulated that none of the parties shall sell,

transfer or otherwise alienate part or whole of the portion in

their occupation to any outsider or create any third party

rights into any of the portions of the house, defendant No.1

has no right to sell, transfer or assign his portion to any

outsider. This is not the case of the plaintiff that the MOU

dated 26th June 1996 is in the nature of a Will or codicil.

The case is that there was a family arrangement reached in

the lifetime of late Sh. Raghu Nath Rai which can at best be

regarded as a living arrangement without bestowing any

ownership rights on anyone and that family settlement was

by way of MOU dated 26th June 1996.

While executing the Will, the testator himself did

not place embargo on the right of the legatee to sell, transfer

or otherwise alienate or part of the portion bequeathed to

them to any outsider, though even the testator could not

have placed such an embargo, once he had absolutely

bequeathed various portions of the suit property to the

legatees. Section 138 of Indian Succession Act provides

that where a fund is bequeathed absolutely to or for the

benefit of any person, but the Will contains a direction that

it shall be applied or enjoyed in a particular manner, the

legatee shall be entitled to receive the fund as if the Will had

contained no such direction. This Section applies to a case,

where, on a reading of the Will, the intention of the Testator

is found to be to give whole of his estate absolutely to the

legatee, but, he has imposed restrictions on the right of the

legatee to use and enjoy that property as its absolute owner.

In such a case, though the bequest will stand, the

subsequent clause in the Will placing restriction on the

right of the legatee would be treated as void. In other words,

this Section applies to a case where the Testator has devised

an absolute estate to the legatee, but, has specifically added

a clause, which has the effect of reducing his power to deal

with that property as an absolute estate. In such a case, the

restriction placed on the right of the legatee needs to be

rejected on account of its being repugnant to the absolute

bequest of that property to the legatee. Another noteworthy

circumstance in this regard is that at the time MOU was

executed on 26th June 1996, late Sh. Raghu Nath Rai was

alive and, therefore, none of the beneficiaries under the Will

had any right, title or interest in the suit property at that

time.

9.          Assuming        that    the    Clause      7    of   the    MOU

prohibiting         the   parties   from    selling,       transferring      or

alienating any part or whole of their respective partition to

any outsider, is binding on the parties to the document, this

Clause in my view cannot be interpreted to mean that the

parties to the settlement can never sell or transfer their

respective shares to an outsider even in the event of the

other parties to the settlement refusing to buy their share or

insisting on buying at a price lower than the prevailing

market price. This Clause does not prohibit sale to

outsiders for a definite period such as two or three years nor

does it envisage purchase by other family members at a

discount to the prevailing market price. Such a Clause in

my view can at best mean that if the party to the settlement

want to sells or transfer his portion or any part of it, he has

to first give an offer to the other parties to the settlement to

purchase it at the prevailing market price and in the event

of the other parties refusing to purchase his share or

offering less than the prevailing market price, he is entitled

to sell his share to any outsider. If this Clause is

interpreted to mean that a person party to the settlement

can in no event and at no point of time sell his share in the

building to an outsider, it would very much be possible for

one or more parties to the settlement to defeat his right

which he enjoys being the absolute owner of his portion of

the building, to deal with his property in any manner he

wants simply by refusing to buy his share or by offering a

price which is substantially less than the prevailing market

price. Moreover, a blanket prohibition against sale to any

person other than those who are parties to the family

settlement, may also offend the Rule against perpetuity,

since it would amount to giving unlimited and unrestricted

right of pre-emption to the other parties to the settlement,

forever, without any backing of law. This, in my view, could

not have been the intention of the parties to the document.

To my mind, when the co-owners of an immovable property

agree to a Clause of this nature which neither restricts the

right of the other co-owners to purchase the property to a

particular time period, nor does provide for purchase by

them at a specified discount to the prevailing market rate,

their intention is that if one of the co-owners wants to sell

his share in the property, the other co-owners should have a

preferential right to buy that share at the market price

prevailing at the time of the intended sale.

10. During the course of arguments, it was contended

by the learned counsel for the plaintiff that defendant No.1

did not offer to sell his portion to the other parties to the

settlement before entering into an agreement to sell made to

an outsider and, therefore, the plaintiff is entitled to an

injunction against sale of the portion of defendant No.1 to

an outsider. The learned counsel for defendant No.1 on the

other hand maintained that defendant No.1, before entering

into a deal with the outsider had offered his portion to the

other parties to the settlement, but none of them was willing

to buy his share. In support of his contention, he has

referred to the minutes of the meetings held on 21st

December 2005 and 26th December 2005, which are

admitted documents. Clause 1 of the minutes show that

defendant No.1 had given time to the family members till

31st December 2005 to come up with the plan for raising

fund to buy his share of the property. This clearly indicates

that the other family members were given an offer to buy his

portion. The minutes show that, when this offer was given,

the plaintiff suggested a rental proposal. A perusal of the

minutes of the meeting held on 26 th December 2005 would

show that Varun stated that he was interested in total sale

of plot/property and Prem Pal had declined to participate in

any manner. It further shows that BT (Balraj Taneja) ST

and KT sought similar letters to sell out the shares as were

provided to defendant No.1. This part of the minutes

indicates that the plaintiff Balraj Taneja also wanted to sell

his share and that is why he desired a letter similar to the

letter issued by defendant No.2 to defendant No.1. I,

however, need not go into the question as to whether

defendant No.1 had before entering into a transaction with

the outsider, offered to sell his share to other parties to the

settlement or not, for the simple reasons that the suit is not

based on the averment that before entering into transaction

with the outsider, defendant No. 1 had not offered to sell his

share to other parties to the settlement. The case, as set

out in the plaint, is that defendant No.1 has no right at all

to sell his portion to an outsider. This plea in my view is

not available to the plaintiff in law. Other parties to the

settlement can at best seek preferential rights to purchase

the share of defendant No.1, but, they cannot refuse to buy

his share or offer him less than the prevailing market price

of his portion and at the same time block his right to

dispose of the portion owned by him in the manner he

deems best in his interest.

11. Since there are no pleadings as regards the

question as to whether defendant No.1 had, before entering

into a transaction with the outsider, offered his portion to

other parties to the settlement, it will not be open to the

Court to permit the parties to lead evidence on this issue. It

would be pertinent to note here that the plaintiff has not

sought to amend the plaint so as to plead that defendant

No.1, before entering into transaction with the outsider, had

failed to offer his portion to the other parties to the

settlement, for purchase by them

In these circumstances the relief of permanent

injunction sought by the plaintiff also cannot be granted to

him on the basis of averments made in the plaint.

12. For the reasons given in the preceding paragraphs,

the suit is hereby dismissed without any order as to cost.

However, the plaintiffs will be at liberty to institute a fresh

suit for injunction after making necessary averments with

regard to alleged failure of defendant No.1 to offer his

portion to the other parties to the settlement, for purchase

by them, before selling the same to an outsider.

(V.K. JAIN) JUDGE JANUARY 17, 2011 Ag