M/S Sentinel Consultants Pvt. ... vs Shri Sudhir Malhotra
2011 Latest Caselaw 5178 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%           Judgment Reserved on:   October 18, 2011
            Judgment Pronounced on: October 21, 2011

+ CS(OS) 1571/1998

M/S. SENTINEL CONSULTANTS PVT. LTD.       ..... Plaintiff
                 Through: Mr. Suresh Singh, Adv.
                      versus


SHRI SUDHIR MALHOTRA                  ..... Defendant
                Through: Mr. Vikas Sharma, Adv. for
                the contemnor.

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 specific performance of the

Agreement to Sell dated 27 th March, 1997, recovery of Rs.25

lac as damages and for mandatory and perpetual

injunction. The plaintiff Company was a tenant under

defendant No.1 in respect of the ground floor of property

No.A-249, Defence Colony, New Delhi. Defendant No.1

entered into a collaboration agreement with defendant No.2

whereunder the existing structure on property No. A-249,

Defence Colony, New Delhi, was to be demolished and

replaced by a new building having basement, ground floor,

first floor and second floor. Under the collaboration

agreement, basement, ground floor and terrace floor were to

be given to defendant No.1 whereas the first floor and

second floor were to go to defendant No.2. A tripartite

agreement dated 27.03.1997 was entered into between the

plaintiff and defendants whereby defendant No.1 agreed to

sell all his rights, title and interest including property rights

in the basement to be constructed by defendant No.2 on the

aforesaid property of the plaintiff-company. It was also

agreed that the basement would be for the maximum

permissible covered area and will comprise a hall toilet and

a pantry. The defendants also agreed to give right of user of

common toilet to be constructed on the second floor, to the

plaintiff, in addition to the right to install TV antenna,

wireless and communication antenna on the roofs and free

ingress and egress to use common passages, staircase and

lift etc. The total consideration for the sale of the basement

floor was fixed at Rs.12,25,000/- out of which a sum of

Rs.25,000/- was paid by the plaintiff to defendant No.1 at

the time of the execution of the agreement. Out of the

balance sale consideration of Rs.12 lac, Rs.2 lac were

payable to defendant No.1 on completion of the basement as

per terms of the agreement or on the plaintiff company

coming into possession after expiry of eight months (which

was the period fixed for construction of the basement),

whichever be earlier. A sum of Rs.10 lac, agreed to be paid

to the plaintiff for relinquishment of subsisting tenancy

rights in the ground floor and that amount was to be

adjusted against balance sale consideration for the

basement, at the time of giving its possession to the plaintiff

company. The plaintiff company vacated the ground floor of

the property in terms of the agreement between the parties.

The defendants, however, failed to complete the basement

within eight months from the date the possession of the

ground floor was handed over by the plaintiff. It is alleged

that in first week of May, 1998, an official of the plaintiff

company visited the suit property which was under

construction at that time and found that a highly truncated

and abridged basement had been constructed. The plaintiff

has now sought a decree for specific performance of the

Agreement to Sell dated 27th March, 1997 by directing the

defendants to sell the basement floor of the suit property to

it, along with a decree for possession of the basement floor.

The plaintiff has also sought recovery of Rs.25 lac from

defendant No.1, being the liquidated damages for not

handing over possession of the property agreed to be sold

within the stipulated period of eight months. The plaintiff

has also sought an injunction directing the defendants to

construct basement to the extent maximum permissible

covered area and complete the interior finish.

2. The defendants filed written statement contesting

the suit. They denied authority of Shri Kuldeep Singh to file

the present suit on behalf of plaintiff and also claimed that

the agreement between the parties is illegal and enforceable

in law. It was also alleged that after completion of the

building, necessary ‗C' and ‗D' form was obtained by the

builder on 7th November, 1997 and the plaintiff was notified

to take possession of the basement. The plaintiff, however,

failed to come forward to take possession of the basement

and, therefore, committed breach of the agreement between

the parties. The defendants also took the plea that the suit

as framed is not maintainable and the agreement dated 27 th

March, 1997 has expired by efflux of time on 27 th November,

1997. On merits, the defendants have admitted execution

of the tripartite agreement to sell dated 27th March, 1997.

They have also admitted that the plaintiff was a tenant

under defendant No. 1 in respect of the ground floor of

property No. A-249, Defence Colony, New Delhi. It is also

alleged that maximum permissible area for construction of

basement about 251 square feet and basement was

constructed accordingly.

3. On the pleadings of the parties, following issue

were framed:-

1. Whether the suit as framed is not maintainable.OPD.

             2.      Whether      suit    is  bad   for
             mis-joinder of parties?     OPD.

             3.       Whether the suit is not properly

valued for the purposes of court fee and jurisdiction? OPD.

4. Whether the suit has been filed by duly authorized person on behalf of the plaintiff? OPP.

5. Whether Agreement to Sell dated 27 March, 1997 is not legally enforceable th

and has come to an end by efflux of time on 27th November, 1997? OPD.

6. Whether the plaintiff was and has been ready and willing to perform its part of contract? OPP.

7. Whether defendants were and have been ready and willing to perform their part of contract? OPD.

8. Whether the plaintiff is entitled to the decree of specific performance and possession as prayed in the suit? OPP.

9. Whether the plaintiff is entitled to decree for recovery of Rs.25 lac quantified as liquidated damages under Agreement to Sell dated 27th March, 1997 along with interest @ 18% per annum from the date of the suit till payment? OPP.

10. Relief.

4. Vide interim order dated 3rd August, 1998, this

Court directed the parties to maintain status quo in respect

of the ground floor and first floor of the property No. A-249,

Defence Colony, New Delhi. This order was modified on

November 10, 1998 by directing that the parties shall

maintain status quo with respect to basement only. On that

date, the defendants had submitted before this Court that

the basement was complete and even a completion

certificate had been obtained in this regard and the

defendants were ready to hand over the vacant possession

over the basement to the plaintiff.

5. IA 5530/2004 was filed by the plaintiff on July 12,

2004 seeking action under Order 39 Rule 2A of CPC on the

ground that despite orders of this Court dated 3 rd August,

1997 and 10th November, 1998, defendant No.1 delivered

the possession of the basement of the suit property to

M/s.ESSEMM Realtors. Notice of the application was also

issued to M/s.ESSEMM Realtors through Mr. Sanjay

Sharma and Mr. Manoj Kain.

6. Reply to the application was filed only by

M/s.ESSEMM Realtors. It has been claimed in the reply

that M/s.ESSEMM Realtors was not aware of the Agreement

to Sell dated 27th March, 1997 executed between the parties

to the suit. It is further alleged in the reply that

M/s.ESSEMM Realtors had taken a portion of the basement

measuring 340 square feet, on rent, from defendant No.1 -

Sudhir Malhotra vide lease deed dated 14th March, 1997 for

the period of three years. Vide sale deed dated 28 th

January, 2003, the tenancy premises was sold by defendant

No.1 to Mr. Manoj Kain and Sanjay Sharma who was

running this business under the name and style of

ESSEMM REALTERS.

Issue No.1

7. The written statement does not indicate why and

how the suit as framed is not maintainable. Admittedly, an

Agreement to Sell the basement to be constructed on

property No. A-249, Defence Colony, New Delhi, was

executed between the parties on 27th March, 1997. The

plaintiff is seeking specific performance of that agreement in

addition to damages which it claims to be payable to it on

account of failure of the defendants to construct basement

in terms of the agreement between the parties and deliver

its possession to the plaintiff. Since the case of the plaintiff

is that basement to the maximum permissible extent was

not constructed in terms of the agreement between the

parties, when this suit was filed. The suit for mandatory

injunction directing the defendants to construct basement

to the maximum permissible extent is also maintainable.

The issue, therefore, is decided against the defendants and

in favour of the plaintiff.

Issue No.2

8. Admittedly both the defendants are party to the

agreement dated 27th March, 1997. Hence, neither of them

is an unnecessary party to the suit. The issue is decided

against the defendants and in favour of the plaintiff.

Issue No.3

9. The plaintiff has valued for the purpose of court fee

and jurisdiction at Rs.37,25,500/-. For the purpose of relief

of specific performance, the suit is valued at Rs.12,25,000/-

which was the sale consideration agreed between the parties

and for the purpose of recovery of damages, the plaintiff has

valued the suit at Rs.25 lac which is the quantum of

damages claimed by it. For the purpose of injunctions, the

plaintiff has valued the suit at Rs.200/- each. The suit,

therefore, is properly valued for the purpose of court fee.

The suit is decided against the defendants and in favour of

the plaintiff.

10. Ex.PW-1/2 is the copy of the resolution passed by

the Board of Directors of the plaintiff company on 10 th

October, 1993, authorizing its Managing Director Shri

Kuldeep Singh to institute any civil suit on the part of the

company and to sign and verify the pleadings. There is no

evidence in rebuttal. I, therefore, hold that Shri Kuldeep

Singh was competent to institute the suit and sign and

verify the pleadings on behalf of the plaintiff company. The

issue is decided against the defendants and in favour of the

plaintiff.

11. These issues are inter-connected and can be

conveniently decided together.

It is an admitted case of the parties to the suit that

the plaintiff company was a tenant under defendant No.1 in

respect of the ground floor of property No. A-249, Defence

Colony, New Delhi. Execution of tripartite agreement dated

27th March, 1997 is also an admitted fact.

Ex.PW-1/10 is the agreement to sell between the

parties to the suit, namely, the plaintiff M/s Sentinel

Consultants, defendant No. 1 Mr Sudhir Malhotra and

defendant No. 2 Buildmore India Ltd. The relevant portions

of the agreement read as under:-

―AND FURTHER WHEREAS the Vendor, vendee and the Confirming Party have agreed that, the Vendee shall vacate possession of ground floor premises and deliver the same to Confirming Party and also that, on terms and conditions agreed and stipulated hereinafter, the Vendor shall sell all rights, title and interest, including all possessory rights in the basement to be constructed by the Confirming Party to the Vendee and the Confirming Party hereby accepts and confirms the said arrangement and has no objection whatsoever thereto.

AND WHEREAS the Vendor, Vendee and Confirming Party have further agreed

that, the complete basement to be constructed by Confirming Party in accordance with maximum permissible covered area and to be sold by the Vendor to the Vendee shall inter-alia comprise of an hall, having one toilet & a pantry together with rights to use the common toilet constructed on the second floor, and rights to install and erect TC antennas, wireless and communication antenna(s) on the roof, with all rights of free ingress and agress to an from the demised premises, right to use common passages, stair cases, lift etc., subject to Clause-20 with proportionate undivided impartible share in the land contained in plot No.A-249, Defence Colony, New Delhi, hereinafter referred to as the "demised premises''.

That in pursuance of the said Agreement and in consideration of a sum of Rs.12,25,000/- (Rupees twelve lac twenty-five thousand only), being paid by Vendee to the Vendor, the Vendor doth hereby agree to sell, convey, transfer and assign all his rights, title, interest and possession in the demised premises alongwith all rights in the fixtures, fittings etc.etc. unto the Vendee, absolutely and forever together with undivided impartible proportionate share in the land in plot No.A-249, Defence Colony, New Delhi.‖

12. It would thus been seen that defendant No. 2 was

to construct basement to the extent of maximum

permissible covered area and that basement was agreed to

be sold to the plaintiff for a total consideration of Rs 12.25

lac. The extent of permissible basement has been

prescribed in Building Bye Laws 1983. The relevant Bye

Laws read as under:

―(b) Plot coverage--The plot coverage shall be as follows:

(i) (b) Above 100 sq. yds. (83.61 sq. mtr.), but

not exceeding 300 sq. yds. (250.83 sq. mts.)

(iv) Basement:

(b) Basement area shall not exceed the

ground floor coverage and shall be below the

ground floor. Basement area may however be

extended below the internal courtyard and shaft.

Admittedly, property No. 249, Defence Colony, New

Delhi is constructed on a plot measuring 217 sq. yards. The

maximum coverage on this plot, therefore, comes to about

130 sq. yards which would mean about 1172 sq. ft. Thus,

basement, measuring up to 1172 sq. ft was permissible to

be constructed on Property No. A-249, Defence Colony, New

Delhi. Since the parties specifically agreed that defendant

No. 1 was to construct basement to the extent of maximum

permissible covered area and agreed to sell that much to the

plaintiff for a consideration of Rs 12.25 lac, defendant No. 2

was required to construct and defendant No. 1 was required

to sell, basement measuring 1172 sq. feet to the plaintiff in

terms of the agreement to sell dated 27th March, 1997. The

case of the defendants in the written statement is that the

maximum permissible basement on Property No. 249,

Defence Colony was 251.25 sq. ft which is patently

incorrect. No material has been placed by the defendants

on record to show that maximum permissible area for the

basement was 251.25 sq. ft and not about 1172 sq. ft. I,

therefore, have no hesitation in holding that the maximum

permissible area for construction of basement on the suit

property was about 1172 sq. ft.

13. The case of the defendants in the written statement

is that they had constructed basement measuring 251.25

sq. ft. Ex.CW-2/PX-1 is the sale deed executed by

defendant No. 1 in favour of Mr Manoj Kumar Kain and Mr

Sanjay Sharma of M/s ESSEMM Realtors on 28 th January,

2003. The relevant portion of this sale deed read as under:

―AND WHEREAS in according with Building Plan that were sanctioned by the M.C.D. at that time the Vendor was allowed to construct a basement measuring 290 sq. feet under the front half of the plinth area of the ground floor (Front Basement).

AND WHEREAS the Vendor has re-

constructed the said property including the said Front Basement. The re- construction was carried out in such a manner so as to enable the construction of the balance basement under the rear half of the ground floor in case, in future, the construction thereof became permissible.

              AND        WHEREAS          subsequently,
              sanction/permission     of   the   M.C.D.

necessary to excavate and/or regularize the balance basement under the rear half of the ground floor in the said property because of change in the building bye- laws permitting regularization thereof was obtained and the Vendor has accordingly constructed a basement measuring approx. 600 sq. feet in covered area under the rear half of the ground floor and behind the Front Basement with its own independent entrance.

AND WHEREAS the Vendor, for his bonafide needs and requirements, has agreed to sell the Front Portion of Basement Floor with front open area and the space under the staircase, measuring approx. 450 sq. feet, with right to use common toilet on the terrace, with super-

structure standing therein, fittings & fixtures, with electric connection therein, of the Property bearing No.A-249, Defence Colony, New Delhi, measuring 217 sq. yards, together with proportionate, undivided, undivisible and impartible share of ownership rights in the land underneath (hereinafter referred to as ―the said Portion‖), unto the Vendees, for a total sum of Rs.1,00,000/- (Rupees one lac only) and the Vendees has agreed to purchase the same from the Vendor, for the same amount.‖

It would thus be seen that as per this document,

the basement constructed initially on Property No. A-249,

Defence Colony was 290 sq. ft., which is contrary to the plea

taken in the written statement, where the constructed area

of basement is stated to be 251.25 sq. ft. This sale deed

clearly shows that as on 20th January, 2003, as much as

890 sq. ft. of the basement had been constructed on

Property No. 249, Defence Colony, out of which area

measuring 450 sq. ft. was sold by defendant No. 1 to Mr.

Sanjay Sharma and Mr. Manoj Kain for a consideration of

Rs 1 lac. Since under the agreement dated 27 th March,

1997, the defendants had to construct basement to the

extent of maximum permissible coverage which would mean

about 1172 sq. ft., it is difficult to dispute that the plaintiff

is entitled to specific performance of the agreement dated

27th March, 1997 at least to the extent of the whole of the

basement which presently stands constructed on Property

No. A-249, Defence Colony. Even if only 251.25 or 290 sq.

ft of the basement was constructed initially and the rest was

constructed later as stated in the sale deed Ex.CW-2/PX-1,

that would make no difference to the case of the plaintiff

since it is entitled to the whole of the basement which could

have been legally constructed on this property. It would be

pertinent to note here that it is the Building Byelaws. 1983

which were in force at the time the agreement to sell was

executed and the permissible area of the basement under

those byelaws comes to about 1172 sq. ft.

14. The main plea taken by the defendants is that they

had constructed basement measuring about 251.25 and

offered that basement to the plaintiff which failed to take its

possession. However, there is no documentary evidence of

the defendants having offered possession of any part of the

basement of Property No. 249, Defence Colony to the

plaintiff. The agreement between the parties for

construction and sale of the basement was a written

agreement. The plaintiff-company surrendered the

possession of the ground floor of the suit property and in

consideration of the defendants agreeing to construct and

sell the basement floor to it. The plaintiff-company had to

pay only Rs 2 lac to the defendants, since Rs 10 lac which

were to be paid to it as the compensation for surrender of

tenancy rights in the ground floor, were to be adjusted

towards payment of the balance sale consideration for the

basement floor and a sum of Rs 25,000/- was paid by it at

the time of the execution of the agreement. It is extremely

difficult to accept that the plaintiff-company was not willing

to purchase the whole of the basement floor even if it had to

pay only a rather paltry sum of Rs 2 lac as the sale

consideration.

15. Defendant No. 1 knew that he had entered into a

written tripartite agreement for sale of the basement floor to

the plaintiff. Had the plaintiff been reluctant or unwilling to

take the basement from him, as is claimed by the

defendants, he would at least have given a written notice to

the plaintiff-company requiring it to pay the balance

amount, take possession of the basement and get the sale

deed executed in its favour. In any case, defendant No. 1

has not bothered even to come in the witness box to

controvert the evidence produced by the plaintiff in this

regard. PW-1 Ms. Nisha Mahendru, Executive Director of

the plaintiff-company, on the other hand, has specifically

stated that the defendant had failed to complete the

basement as per agreement between the parties. She has

further stated that in the first week of December, 1997, the

Managing Director of the plaintiff company had contacted

defendants No. 1 and 2 and requested them to hand over

physical possession of the basement to the plaintiff

company. They, however, expressed their inability to do so

on the plea that the work was far behind schedule. She has

further stated that he plaintiff has always been ready and

willing at all material times to perform its part of the

contract and it were the defendants who failed to construct

the basement and deliver vacant and physical possession in

terms of the agreement dated 27 th March, 1997. Dishonesty

on the part of defendant No. 1 in this regard is evident from

the fact that as against permissible basement about 1172 sq

ft., he constructed a basement measuring only about

251.25/290 sq. ft.

16. Dishonesty on the part of both the defendants

becomes more explicit from the agreement dated 23 rd July,

1997 whereby defendant No.1 agreed to sell the entire

ground floor and entire basement floor of the suit property

to defendant No.2 for a consideration of Rs.13 lac. The

basement was to be constructed and its possession was to

be delivered to the plaintiff within 08 months from the

agreement dated 27th March, 1997 which would mean - by

the end of November, 1997. The conduct of the defendants

in entering into agreement dated 23rd July, 1997 (Exh. CW-

1/PA) therefore clearly shows that they never intended to

deliver the possession of the basement to the plaintiff, in

terms of agreement to sell dated 27 th March, 1997, which is

a document filed by none other than defendant No.2. Mr.

Prabhjit Singh, who is the only witness produced by

defendant No.2 has admitted in his cross examination that

they had not obtained completion certificate of the suit

building. This is yet another proof that the defendants

never intended to transfer the basement to the plaintiff and

that is why they did not bother even to apply for issue of

completion certificate to MCD. Mr. Prabhjit Singh has

contradicted himself even with respect to the month in

which the construction of the basement was completed by

them. In his affidavit by way of evidence, he stated that

defendant No.2 completed construction of the basement as

per sanctioned plan in November, 1997 whereas in his cross

examination he stated that they had completed construction

of the basement in all respects sometime in May/June,

1997.

17. One of the objections taken in the Written

Statement is that since the agreement to sell provided for

payment of Rs.10 lac to the plaintiff for surrender of the

tenancy rights in the ground floor portion and adjustment of

that amount towards payment of sale consideration of the

basement floor, the consideration being unlawful in terms of

Section 23 of the Indian Contract Act, the agreement is void

and unenforceable in law. Section 23 of the Indian Contract

Act, 1872, to the extent it is relevant, provides that the

consideration or object of an agreement is lawful, unless it

is forbidden by law or is of such a nature, if permitted, it

would defeat the provisions of any law. Section 24 of the

Indian Contract Act, to the extent it is relevant, provides

that if any part of a single consideration for one or more

objects, or any one or any part of any one of several

considerations for a single object is unlawful, the agreement

is void. When questioned in this regard, the learned

Counsel for the plaintiff stated that the rent of the ground

floor premises which defendant No.1 had let out to the

plaintiff and which it had vacated pursuant to the

agreement to sell dated 27 th March, 1997 was Rs.6,000/-

p.m. Section 5(3) of Delhi Rent Control Act provides that it

shall not be lawful for the tenant to receive any payment in

consideration of the relinquishment of tenancy of any

premises. Therefore, if the provisions of Delhi Rent Control

Act apply to the Ground Floor which was let out to the

plaintiff and was vacated by it pursuant to the agreement to

sell dated 27th March, 1997, the part of the consideration

may be held unlawful and consequently the agreement may

be void. Section 3 (c) of Delhi Rent Control Act, to the extent

it is relevant provides, that nothing in the Act shall apply to

any premises whether residential or not, whose monthly

rent exceeds Rs.3500/-. Hence, the provisions of Delhi Rent

Control Act including Section 5 thereof do not apply to the

ground floor premises which defendant No.1 had let out to

the plaintiff and which was surrendered by the plaintiff

company pursuant to the agreement to sell dated 27 th

March, 1997. No other provision of law, prohibiting

payment of compensation to a tenant for surrendering the

tenancy rights has been brought to my notice. I, therefore

hold that the consideration or object of the agreement to sell

dated 27th March, 1997 cannot be said to be unlawful.

18. It has come in evidence that during pendency of

this suit basement measuring about 450 sq. feet has been

sold by defendant No.1 to Mr. Manoj Kain and Mr. Sanjay

Sharma who are carrying business under the name and

style of M/s.ESSEMM Realtors, vide sale deed dated 28th

January, 2003. Hence a legal question arises in this case,

as to whether the plaintiff can obtain specific performance

of the agreement dated 27 th March, 1997 and possession of

the whole of the basement constructed in the suit property

without seeking cancellation of the sale deed dated 28 th

January, 2003 executed by defendant No.1 in favour of Mr.

Sanjay Sharma and Mr. Manoj Kain. As noted earlier, vide

order dated 3rd August, 1998 this Court had directed the

parties to maintain status quo in respect of ground floor

and basement floor of property No.A-249, Defence Colony,

New Delhi. Vide subsequent order dated 10th November,

1998, the injunction was restricted to the basement floor

alone. The injunction order to the extent it pertained to the

basement floor of the suit property has never been vacated

by this Court. According to Mr. Sanjay Sharma and Mr.

Manoj Kain, they had initially taken the basement portion

on rent vide lease deed dated 19th March, 2002 and later on

they purchased the same vide sale deed dated 28 th January,

2003. In view of the injunction order passed by this Court

on 3rd August, 1998, the defendants could not have let out

the basement portion to Mr. Sanjay Sharma and Mr. Manoj

Kain and they could not have sold it to them vide sale deed

dated 28th January, 2003. The lease created as well as the

sale deed executed in their favour being in violation of the

injunction order passed by this Court are void ab initio and

non est in law, which the Court is required to ignore from

consideration. If a person who has been granted an

injunction in his favour and who is not a party to such a

transaction is made to seek cancellation of the documents

evidencing such a transaction, this would only encourage

unscrupulous litigants to circumvent the process of law and

violate the orders of the Courts with impunity, which will

not be conducive to public policy and would undermine the

process of law and its institutions and that to at the cost of

a bona fide litigant who comes to the Court for redressal of

his genuine grievances. It is settled proposition of law that

when the Court passes such an order, it not only directes

but also presumes that the position which existsed at the

time of passing the order, continues to exist. Any other

construction of law on the subject would be contrary to

public interest and subvert the cause of justice.

19. In Surjit Singh & Ors. v. Harbans Singh & Ors.

AIR 1996 SC 135, the Court, in a suit for partition and

possession of properties, passed an order restraining the

parties to the suit from alienating or otherwise transferring

any part of the suit property. One Pritam Singh however,

assigned his rights under the preliminary decree by a

registered deed partly in favour of his lawyers and partly in

favour of others despite restraint order which the trial Court

had passed. The assignees sought impleadment as parties

to the proceedings. Their application was allowed by the

trial Court and the appeal against that order was rejected by

the first Appellate Court as well as by the High Court.

Supreme Court however, did not agree with the view taken

by the Courts below and while allowing the appeal, inter alia

observed as under:

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.

In Delhi Development Authority v. Skipper

Construction Co.(P) Ltd. & Anr. (1996) 4 SSC 622, while

dealing with the question as to whether the contemnor

should be allowed to enjoy and retain the fruits of his

contempt, Supreme Court was of the view that a contemnor

ought not to be permitted to enjoy and/or to keep the fruits

of his contempt. In this regard the Court inter alia observed

as under:

To the same effect are the decisions of the Madras and Calcutta High Courts in Century Floor Mills Ltd. v. S.Suppiah and Sujit Pal v. Prabir Kumar Sun. In Century Flour Mills Ltd. it was held by a Full Bench of the Madras High Court that where an act is done in violation of an order of stay or injunction, it is the duty of the Court, as a policy, to set the wrong right and not allow the perpetuation of the wrongdoing. The inherent power of the court, it was held, is not only available in such a case, but it is bound to exercise it to undo the wrong in the interest of justice. That was a case where a meeting was held contrary to an order of injunction. The Court refused to recognize that the holding of the meeting is a legal one. It put back the parties in the same position as they stood immediately prior to the service of the interim order.

In Sujit Pal a Division Bench of the Calcutta High Court has taken the same view. There, the defendant forcibly dispossessed the plaintiff in violation of the order of injunction and took possession of the property. The Court directed the restoration of possession to the plaintiff with the aid of police. The Court observed

that no technicality can prevent the Court from doing justice in exercise of its inherent powers. It held that the object of Rule 2-A of Order 39 will be fulfilled only where such mandatory direction is given for restoration of possession to the aggrieved party. This was necessary, it observed, to prevent the abuse of process of law.

In Mulraj v. Murti Raghonathji Maharaj AIR 1967

SC 1386, Supreme Court considered the effect of action

taken subsequent to passing of an interim order in its

disobedience and held that an action taken in disobedience

of the order passed by the Courts would be illegal and a

nullity.

In Arjan Singh v. Punit Ahluwalia & Ors. (2008) 8

SSC 348 Supreme Court inter alia observed as under:

We must also take notice of the fact that even a court in exercise of its inherent jurisdiction under Section 151 of the Code of Civil Procedure, in the event of coming to the conclusion that a breach to an order of restraint had taken place, may bring back the parties to the same position as if the order of injunction has not been violated. (Gurunath Manohar Pavaskar v. Nagesh Siddappa Navalgund).

Thus, the lease deed and the sale deed executed by

defendant No.1 in favour of Mr. Sanjay Sharma and Mr.

Manoj Kain being in violation of the injunction order passed

by this Court have to be treated as a nullity and non est in

the eyes of law. The plaintiff therefore needs not seek

cancellation of these documents in order to claim specific

performance of the agreement to sell dated 27 th March,

1997.

20. Clause 16(c) of the agreement to sell dated 27 th

March, 1997 reads as under:

If for any reason whatsoever, the demised premises are constructed but are not delivered to the Vendee in consonance with present agreement, without prejudice to the aforegoing rights of the Vendee to seek specific performance of the agreement, the Vendor shall be liable to pay to the Vendee liquidated damages which are agreed and quantified at Rs.25 lac (Rupees Twenty Five Lac Only).

Since, defendant No.1 constructed/got constructed

the basement in property No. A-249, Defence Colony but did

not deliver its possession to the plaintiff, he is liable to pay

the aforesaid sum of Rs.25 lac as liquidated damages to the

plaintiff company. Since the right given to the plaintiff

company to recover the aforesaid sum of Rs.25 lac as

liquidated damages was without prejudice to its right to

seek specific performance of the agreement, execution of the

sale deed in favour of the plaintiff company and delivery of

the possession of the basement floor to it also, will not

absolve him of his contractual liability to pay the aforesaid

amount to the plaintiff company. Moreover, it can hardly be

disputed that the plaintiff company needs to be

compensated for being deprived of the possession of the

basement for about 14 years which have passed since the

last date stipulated for completion of construction of the

basement. The plaintiff company got the advantage of

retaining Rs.2 lac which it would have paid to defendant

No.1 had it been given the possession of basement floor to it

in terms of the agreement to sell dated 27th March, 1997

but, this is a rather insignificant benefit as compared to the

loss in the form of deprivation of the basement floor for

almost 14 years.

The issues are decided in favour of the plaintiff and

against the defendants.

ORDER

In view of my findings on the issues, a decree for

specific performance of the agreement to sell dated 27 th

March, 1997 and for recovery of Rs.25 lac with

proportionate costs is hereby passed in favour of the

plaintiff and against both the defendants. A decree for

possession of the whole of the basement floor of property

No. A-249, Defence Colony, New Delhi is also passed in

favour of the plaintiff and against the defendants.

Defendant No.1 is directed to execute an appropriate sale

deed in favour of the plaintiff company in respect of the

whole of the basement floor of property No.A-249 Defence

Colony, New Delhi within 08 weeks from today after

obtaining permissions, if any, required for this purpose.

The plaintiff is directed to deposit the balance sale

consideration of Rs.2 lac in this Court by way of a Demand

Draft/Pay Order in the name of Registrar General of this

Court within two weeks from today. In case of failure of the

plaintiff to deposit the aforesaid amount, it will not be

entitled to decree for specific performance of the agreement

to sell dated 27th March, 1997 and to this extent the suit

shall stand dismissed without any further orders.

Decree sheet be drawn accordingly.

IA No. 5530/2004 (O. 39 R. 2A CPC)

The grievance of the petitioner is that in violation

of the injunction order passed by this Court defendant No.1

first created the lease of a part of the basement floor and

then sold 400 sq. feet area out of it to Mr. Sanjay Sharma

and Mr. Manoj Kain. In the application, the plaintiff sought

appropriate action only against the defendants for breach of

the interim injunction granted by this Court. The other

prayers made in the application were for attachment of the

ground floor of the suit property and appointment of a

receiver in respect of the ground floor. In this application

the plaintiff made no prayer for punishing Mr. Sanjay

Sharma and Mr. Manoj Kain. There was no averment in

this application that Mr. Sanjay Sharma and Mr. Manoj

Kain were aware of the interim orders passed by this Court

on 3rd August, 1998 and 10th November, 1998 and that they

took the basement portion on rent and later purchased it

despite knowledge of the interim orders passed in the suit.

In its reply, filed through Mr. Manoj Kain M/s ESSEMM

Realtors has claimed that it was not aware of the present

suit and had not violated any order passed by the Court. It

is also alleged that the applicants took the basement portion

on rent vide registered lease deed dated 14th March, 2002

and later purchased it vide sale deed dated 28th January,

2003. Notice of this application was issued by the Court

initially to defendant No.1 but could not be served on him.

Later, the notice was issued to ESSEMM Realtors. The

application has however been contested by Mr. Sanjay

Sharma and Mr. Manoj Kain.

21. It was pointed out by the learned Counsel for the

plaintiff that the defendants had agreed to sell the basement

to be constructed in the suit property to the plaintiff for

Rs.12.25 lac whereas Mr. Sanjay Sharma and Mr. Manoj

Kain claim to have purchased area measuring 450 sq. feet

for a paltry sum of Rs.1 lac which shows that they are not

the bona fide purchasers. No doubt the sale consideration

as indicated in the sale deed Exh. CW-2/PX1 is grossly

inadequate for basement area measuring 450 sq. feet when

the plaintiff had agreed to purchase basement area which

could be about 1172 sq. feet for a consideration of Rs.12.25

lac. Moreover, the agreement to sell in favour of the plaintiff

was executed on 27th March, 1997, which is about 6 years

before the sale deed in favour of Mr. Sanjay Sharma and Mr.

Manoj Kain was executed. Therefore, there is a possibility

that these persons knew of the injunction order passed by

this Court and that is why they took a calculated risk by

taking possession of the basement portion measuring about

450 sq. feet for a meager consideration of Rs.1 lac.

However, yet another possibility in the matter is that the

entire sale consideration paid by Mr. Sanjay Sharma and

Mr. Manoj Kain to defendant No.1 was not reflected in the

sale deed. I would like to add here that this is not the case

of Mr. Sanjay Sharma and Mr. Manoj Kain that they had

paid more than Rs.1 lac for purchase of the basement floor,

but, underreporting of the sale consideration is rather

frequent in our country, in the transactions relating to sale

and purchase of immovable properties.

22. It was contended by the learned Counsel for the

plaintiff that Mr. Sanjay Sharma and Mr. Manoj Kain did

not make any inquiry from defendant No.2 despite the fact

that one of them i.e. Mr. Sanjay Sharma was a witness to

the collaboration agreement between defendants No. 1 & 2.

This, to my mind, cannot be held against Mr. Sanjay

Sharma and Mr. Manoj Kain in case they were not aware of

the agreement to sell executed by defendants No. 1 & 2 in

favour of plaintiff on 27th March, 1997. It is true that Mr.

Sanjay Sharma and Mr. Manoj Kain are real estate agents

and the directors and staff of defendant No.2 was known to

Mr. Sanjay Sharma as admitted by him in his cross

examination, but, even that would not indicate that they

were aware of the interim orders passed by the Court in this

suit. If they had no knowledge of the agreement executed

by the defendants in favour of the plaintiff they had no

occasion to make any such inquiry from the Directors or

staff members of the defendant No.2. They being real estate

agents would not mean that they would necessarily be

aware of the injunction order passed by the Court in the

suit. To my mind, the only circumstance which can be held

against Mr. Sanjay Sharma and Mr. Manoj Kain in this

regard is the amount of the sale consideration which they

claim to have paid to defendant No.1 for purchase of

basement portion measuring about 450 sq. feet.

23. The next question which comes up for

consideration is as to what order, if any, the Court should

pass against Mr. Sanjay Sharma and Mr. Manoj Kain in this

application. The learned Counsel for Mr. Sanjay Sharma

and Mr. Manoj Kain has relied upon the decision of Orissa

High Court in Prafulla Kumar Mohapatra v. Jaya Krushna

Mohapatra & Ors. AIR 1994 Orissa 173 where it was held

that ordinarily the persons who are not parties to the suit

are not to be proceeded against for disobeying the

injunction, the exception being, where it is alleged and

proved that the person who violated the order was an agent

or servant or workman of the person against whom the

order of injunction was passed. It was further alleged that if

a person who is not a party to the suit is sought to be

proceeded against for disobedience of the order passed by

the Court it has to be proved by sufficient and

unimpeachable evidence that he was guilty of abetting the

violation of the injunction. Of Course, if Mr. Sanjay Sharma

and Mr. Manoj Kain were aware of the injunction orders

passed by this Court in the suit they would be guilty of

abetment since in that case by agreeing to purchase the

basement portion they encouraged defendant No.1 to

disobey the order of the Court.

In my view considering all the facts and

circumstances of the case, the ends of justice in this case

would be adequately met if Mr. Sanjay Sharma and Mr.

Manoj Kain are directed to deliver possession of the

basement floor occupied by them in property No.A-249

Defence Colony to the plaintiff without demur or protest,

within 04 weeks from the date of this order. Even

otherwise, the basement portion having been purchased by

them in violation of the injunction order, the sale in their

favour is non est and nullity in the eyes of law and it confers

no right, title or interest on them in respect of the basement

portion purchased by them and they are liable to be evicted

therefrom. Mr. Sanjay Sharma and Mr. Manoj Kain are

accordingly directed to deliver peaceful and vacant

possession of the basement portion occupied by them in

Property No. A-249 Defence Colony to the plaintiff without

demur or protest within 04 weeks from today. The

application stands disposed of in terms of this order.

(V.K. JAIN) JUDGE OCTOBER 21, 2011 'sn'/bg/vn