Ajay Goel vs K.K.Bhandari & Ors.
2012 Latest Caselaw 977 Del

*	IN  THE  HIGH  COURT  OF  DELHI  AT  NEW  DELHI



% 				RESERVED ON: FEBRUARY 02 , 2012 

        PRONOUNCED ON: FEBRUARY 13, 2012



+ 				RFA(OS) No.124/1998 



	AJAY GOEL						........Appellant

			Through:	Mr.C.Mohan Rao, Advocate.



			versus



	K.K.BHANDARI & ORS.			......Respondents

Through:	Mr.Arvind Nigam, Sr.Advocate with Ms.Farida Satarwala, Advocate.





	CORAM:

HON'BLE MR. JUSTICE PRADEEP NANDRAJOG

	HON'BLE MS. JUSTICE PRATIBHA RANI



PRATIBHA RANI, J.

1. Feeling aggrieved, the appellant Ajay Goel has impugned the judgement dated 14.10.1998 passed by learned Single Judge in Suit No.813 of 1998 filed under Section 31 of the Specific Relief Act seeking a decree for mandatory and perpetual injunction.

2. Immediately after institution of the suit, on being informed that another Suit No.2946/1996 was listed before another Bench of this Court, this suit was also listed before the same Bench. Before taking up the suit for admission, on 04.05.1998 the Court directed the plaintiff to satisfy on the following points:-

(1) Whether the suit as framed is maintainable?

(2) Whether the suit for declaration simplicitor without claiming relief of possession is maintainable?

(3) Whether the suit is properly valued for purposes of Court fee and jurisdiction?

(4) Whether the defendants No.3 to 7 are necessary and proper parties?

(5) Whether the suit against defendant No.5 is maintainable at Delhi?

3. Before the Court could hear arguments on the points referred to above, I.A.No.4686/1998 was filed by the plaintiff seeking review of the order dated 04.05.1998 which was dismissed on 25.05.1998 observing that no order on merits had been passed and as such there was no occasion to review that order.

4. It would be relevant to mention that it seems that the plaintiff Ajay Goel has sold his interest in the litigation to some other person(s) who is the actual litigator and Ajay Goel is a mere name lender. This fact is emerging on record through I.A.No.4686/1998, seeking review of the order dated 04.05.1998, which application has been signed only by the Advocate and the supporting affidavit has been deposed to by one Mr.Virender Kumar Singhal S/o Mr.P.D.Gupta R/o 2/112, Sunder Vihar, New Delhi-41; claiming himself to be the attorney of the plaintiff. Though it is a typed affidavit, para 2 of the affidavit is hand written, to the effect that deponent is the attorney of the plaintiff and is conversant with the facts stated; but no Power of Attorney or its copy is enclosed therewith. Even the body of the review application does not disclose that it is filed through an attorney.

5. Record of the suit would reveal that when the plaint was first listed before the Court, there being a reference to an earlier litigation between the parties, at the first hearing itself it was directed that record of Suit No.2946/1996, to which a reference was made in the plaint be called for. The purpose was obvious. The learned Single Judge probably felt that it was a case of clever drafting and meaningfully read, in light of the admitted documents and in particular the ones referred to, directly or indirectly, in the pleadings, the plaint did not disclose a cause of action and hence the evil to be nipped in the bud.

6. Vide impugned decision the learned Single Judge has held the suit of the plaintiff to be not maintainable under Order 31 of the Specific Relief Act; relying on the decision reported as AIR 1972 Allahabad 376 Debi Pershad & Ors. v. Smt.Maika & Ors.; observing that mere possession in itself or possessory title does not entitle a person to a decree of cancellation of written instrument unless the person can show his title to the property and further noting that suit No.2946/1996 for possession and permanent injunction was filed by the plaintiff after remaining out of possession for more than 26 years.

7. Let us recapitulate the facts in brief. The plaintiff, as member of Anand Lok Cooperative House Building Society was allotted, as a perpetual sub-lessee Plot No.8, measuring 793.3 sq.yd. after the society had developed raw land placed at its disposal by DDA and a registered perpetual sub-lease was executed in his favour on 21.09.1970. It was a term of the perpetual sub-lease that the sub-lessee shall not sell the sub-lease rights except with the prior permission of the lessor i.e. DDA and for which he would pay 50% of the unearned increase. The sub-lessee entered into an ostensible construction agreement with the respondent No.1/defendant No.1 (hereinafter referred to as defendant No.1), Sh.K.K.Bhandari vide agreement dated 27.10.1972. Plaintiff executed a General Power of Attorney in favour of the daughter of K.K.Bhandari authorizing her to do all acts pertaining to the land in question, including to sell the same. He handed over possession of the plot as well as the perpetual sub-lease i.e. his title document to Sh.K.K.Bhandari. Finding it to be a case of sale under camouflage of a construction agreement, DDA determined the lease and re-entered the plot, but only on paper. Litigation ensued. Large number of such violations of the terms of the perpetual lease deeds in Delhi were noted. A policy decision was taken to regularize the breach by restoring the sub-lease in favour of the original allottee and thereafter after receiving unearned increase, convert the perpetual lease in favour of the transferee. K.K.Bhandari took advantage of the said policy and obtained a revocation of the re-entry order. He got the lease restored in the name of the original allottee and paid `32,96,587/- towards unearned increase, interest and restoration charges, including damages. Acting under the irrevocable General Power of Attorney executed in her name, the daughter of K.K.Bhandari thereafter executed a conveyance deed in favour of K.K.Bhandari. It is this conveyance deed which is sought to be got cancelled in the suit filed.

8. The prayer made in Suit No.813/1998 is to adjudge the sale deed dated 10.01.1997 void and accordingly cancel the same and deliver up to the plaintiff is the prayer made. Simultaneously, it is also prayed that Power of Attorney dated 15.12.1996 in favour of Ms.Malti Bhandari, the daughter of K.K.Bhandari be also adjudged void and cancel and deliver up to the plaintiff. Prayer is also made to adjudge void the documents of transfer of the property in favour of defendant No.1 and accordingly cancelled and delivered up to the plaintiff.

9. Mr.C.Mohan Rao, learned counsel for the appellant, after giving the detailed history of the construction agreement and subsequent developments as well as history of litigations between the parties submitted that the lease deed in favour of the plaintiff was cancelled on 06.10.1978, leading to the finding by learned Single Judge that plaintiff was left with no title, on cancellation of the perpetual sub-lease deed, and it was the defendant No.1 K.K.Bhandari who applied for restoration and paid the restoration charges and unearned increase and obtained sale permission from the DDA and thus acquired title to the property, further holding that the plaintiff could not challenge the validity of the sale deed and the Power of Attorney. Learned counsel urged that the learned Single Judge returned the findings on points No.1 and 2 on the assumptions: (1) that the suit property was sold by the plaintiff to defendant No.1; (2) that on cancellation of lease deed by the DDA and the plaintiff having not challenged the cancellation and subsequent restoration thereof in his name, the plaintiff was left with no right, title or interest in the suit property; and (3) that defendant No.1 having obtained restoration and sale permission and sale deed having been executed in his favour has perfected his title in respect of the suit property.

10. Challenging these findings to be contrary to law, it was urged by learned counsel that the plaint could not have been rejected, if on a plain reading thereof it disclosed cause of action. Referring to the decisions reported as (1996) 8 SCC 377 State of Orrisa v. Klockner & Company, (2005) 10 SCC 760 Church of North India vs. Lavaji Bhai Rafunji Bhai and (2004) 9 SCC 512 Liverpool and London SP and I Association Ltd. v. MV Sea Success I, detailing the circumstances under which a plaint can be rejected, it was contended that the learned Single Judge erred in holding that the suit property was sold by the plaintiff to defendant No.1, ignoring the specific averment in the plaint that the plaintiff entered into a construction agreement with defendant No.1. learned counsel urged that the learned Single Judge had to proceed on the assumption that the plaintiff parted with possession to the defendant under a construction agreement. Referring to the findings that plaintiff was holding no right, title or interest in the suit property, since he did not challenge the cancellation of the sub-lease deed, it was urged that the learned Single Judge ignored the fact that the sub-lease deed was restored in favour of the plaintiff and that the representations made by defendant No.1 to DDA or other authorities to restore the lease were only as attorney of the plaintiff. It was urged that the learned Single Judge also ignored the averment in the plaint that the General Power of Attorney dated 27.10.1992 was cancelled and intimation thereof was given to DDA on 06.10.1980. The findings returned by the learned Single Judge that a suit for declaration simplicitor, without claiming relief of possession was not maintainable, was questioned as being an erroneous finding. It was urged that a prior suit seeking possession had been filed and the instant suit was filed to remove the cloud cast on the plaintiff's title.

11. Learned counsel for the plaintiff further urged that the learned Single Judge failed to take into account that defendant No.1 could perfect his title only by filing a suit for specific performance and the acts performed by him i.e. getting the sub-lease restored, sale permission obtained etc. and payment of the restoration charges, unearned increase and interest were on behalf of the plaintiff, who would be the beneficiary thereof. In a nutshell, learned counsel urged that the averments made in the plaint and the documents in support thereof clearly show that the plaintiff has title and interest in the suit property. The General Power of Attorney executed in favour of the daughter of K.K.Bhandari stood cancelled in the year 1980 itself. Thus, the purported sale deed executed in favour of K.K.Bhandari by the plaintiff's General Power of Attorney holder i.e. Malti Bhandari could not have been executed. Referring to the decision of this Court reported as AIR 2008 Delhi 44 Sushil Bhasin & Ors. v. Sundeep Gupta & Ors., vehemently relied upon by learned counsel for the respondents, Sh.C.Mohan Rao submitted that the facts of said case were entirely different and that the plaint therein was rejected being barred by limitation.

12. Most of the contentions raised before us and the case law relied upon is the same which have been dealt with by learned Single Judge in the impugned judgement; and we must say in the right perspective. As regard the case law relied upon, suffice would it be to state that a defence is not to be looked into while deciding whether a plaint discloses a cause of action. But that does not mean that the plaint has to be read pedantically. A plaint has to be read meaningfully and in light of the documents relied upon. Further, it is the duty of the Court to ensure that clever drafting should not blur the vision of the Court. If by removing the smoke screen, truth is revealed, it is the duty of the Court to see the same.

13. The plaintiff has based his claim on the construction agreement and the General Power of Attorney executed in favour of defendant No.1. Since these two documents form the foundation of the case pleaded by the plaintiff and the finding returned is that the plaintiff has passed on irrevocable possession and title to the defendant, a few terms and conditions incorporated therein need to be noted, for the reason they make clear the intention of the parties on the date when they entered into the agreement as to what they were doing.

14. The relevant clauses of the construction agreement, to deduce the intention of the parties, are reproduced here under :-

" xxx xxx xxx xxx xxx xxx xxx xxx xxx

7. That after completion of the construction and the Contractor obtaining the completion certificate, the Contractor shall offer to hand over the built & completed building to the Allottee against payment of Rs.3,96,000/- (Rupees three lakhs ninety -six thousands only) on account of agreed cost of construction together with 20% thereof i.e. Rs.56,000/- only as Contractors' profit and also total Rs.3,96,000/- (Rupees three lakhs ninety-six thousands only) and on payment of such amount the Contractor shall hand over the possession of the built house to the Allottee.

8. xxx xxx xxx xxx xxx xxx xxx xxx xxx

9. That so long as the Allottee does not pay the above amount of Rs.3,96,000/- to the contractor, the contractor shall continue in possession of the said built and completed building and shall be entitled to occupy the same himself, let out or rent to tenants or other persons on payment of rent, damages, means profits, licence fee and to retain such income with him without rendering any account or accounting for the same to the allottee. Of course during all this period the contractor shall be liable to pay the lease money or tax, water and electric charges and all other Government dues and shall keep the allottee indemnified against the same.

10. xxx xxx xxx xxx xxx xxx xxx xxx xxx

11. That in the event of the allottee is not in a position to pay to the Contractor the above said sum of Rs.3,96,000/- as detailed hereinabove with the period ending upto 26th day of April, 1975 the Contractor shall have the option to purchase the said plot of land and lease hold rights therein from the allottee or his attorney for a sum of Rs.60,000/- (Rupees sixty thousands only) the ownership of super-structure already vesting in the contractor. The Contractor shall also have the option of getting conveyance deed executed in his favour or in favour of any of his nominee.

12. That the allottee shall apply to obtain permission and previous consent in writing of the President of India and shall also assist the contractor to become a Member of Anand Lok Cooperative Housing Society Ltd. in his place and shall transfer his membership share to him.

13. That in the above event as provided in clause 11 above the contractor shall bear all the expenses of execution and registration of the conveyance deed.

14. That this agreement is irrevocable and shall be binding on both sides. Neither of the parties is entitled to revoke the same till such time it stands exhausted as per its terms.

15. That lease deed dated 6.10.70 and all papers whatsoever connected with the land have been handed over to the contractor today."

15. The relevant clauses of the General Power of Attorney dated 27.10.1972 are reproduced here under :-

" xxx xxx xxx xxx xxx xxx xxx xxx xxx

1. To represent the EXECUTANT Shri Ajay Kumar in all the Offices of L. & D.O., Delhi, Delhi Development Authority, President of India, Lt. Governor, Delhi Administration, Municipal Corporation of Delhi and to sign any letter, document, representation, petition and file and pursue the same.

2-4. xxx xxx xxx xxx xxx xxx xxx xxx xxx

5. To let out the built property or any portion thereof on rent to any person, to execute rent notes, lease-deed or license deeds in favour of any person and also to receive the rents, licence fee etc. and give valid receipt therefore.

6. To get vacated any portion from any tenant/occupant and receive vacant possession thereof and to re-let the same to any person.

7. To negotiate for the conveyance of the above-said plot No.8 its lease hold rights to any person and to execute the conveyance deed and get the same registered to in the Office of Sub-Registrar concerned. He is also authorized to apply for permission to sell, transfer, assign or otherwise part with possession of the said plot or building constructed thereon from the competent authority, and to receive the said consent authority from the office concerned.

8. xxx xxx xxx xxx xxx xxx xxx xxx xxx

9. To appoint and engage any advocate or sub-attorney or agent and to delegate him all or any of the powers vesting in him.

The Executant doth hereby agree to ratify and confirm all this is done or caused to be done by the said attorney as the same having been lawfully done by him.

In witness whereof the executants has set his hands to this irrevocable General Power of Attorney on the day of October 27th, 1972 at New Delhi in the present of witnesses"

16. A bare reading of the construction agreement would reveal, that since there was a restriction on sale of the plot and the sub-lessee was under an obligation to raise a construction on the plot within two years, for which he was having no funds, as mentioned on the first page of the agreement of construction itself, the plaintiff executed the documents. By virtue of the agreement, the plaintiff has entered into an outright sale (by a mode then in vogue in Delhi) and transferred his interest in the plot. This is borne out from the fact that not only he executed an irrevocable General Power of Attorney but also handed over the title deeds to defendant No.1, which normally is done only in case of sale. We wonder, what would a builder do with the original title documents of the owner?

17. A combined reading of the construction agreement and the General Power of Attorney leaves no manner of doubt about the real nature of the transaction and intent of the parties while executing these two documents. Indeed, DDA saw through the mischief and cancelled the sub-lease. DDA re-entered the property. Thereafter, regularizing many such instances, DDA came out with a policy under which the transferee paid the necessary restoration charges, the unearned increase as also damages and thereafter, by way of step one, DDA restored the sub-lease and simultaneously granted the sale permission and by way of step two acknowledged the conveyance deed executed in favour of the transferee.

18. In the instant case, the plaintiff, after putting defendant No.1 in possession, handed over the title deeds and by executing an irrevocable General Power of Attorney, ensured smooth sailing in future too, to deal with and manage the property; thereby enabling K.K.Bhandari to exercise all rights vested in the plaintiff on the strength of sub-lease executed in his favour in respect of said plot and fulfil all obligations as sub-lessee including payment of taxes.

19. The plaintiff never asserted his rights over a long period, may be for the reason, that initially price rise in the property was not of the magnitude that could tempt him to breach the agreement. As the prices of land and property sky rocketed, the plaintiff turned dishonest because of the greed to have some extra money by twisting the arms of the purchaser who purchased the property under the colour of a construction agreement and a General Power of Attorney; law was circumvented, but the breach was subsequently regularized by the title paramount under a policy decision.

20. It assumes importance that the defendant No.1 not only continued to be in possession from the inception of the execution of the construction agreement but also perfected his title in the manner permissible under the policy of DDA.

21. The contentions of learned counsel for the plaintiff that the restoration was in the name of plaintiff since defendant No.1 was acting as his attorney and thus the title continued to vest in the plaintiff and that the Power of Attorney executed in favour of the daughter of defendant No.1 was cancelled by the plaintiff in the year 1980, are noted for rejection only. Undisputedly the General Power of Attorney executed was irrevocable. Bearing in mind the view expressed by a Division Bench of this Court in the decision reported as 1977 RLR 487 (DB) Harbans Sigh v. Shanti Devi and followed in 1991 RLR 458 Prem Raj v. Babu Ram and 1986 RLR (N) 89 H.L.Malhotra v. Nanak Jai Singhani, the legal position is well settled; that if an irrevocable Power of Attorney is executed for consideration, subsequently it cannot be cancelled. The argument of the plaintiff that he has cancelled the General Power of Attorney leads him nowhere.

22. In the decision reported as 1986 RLR 30 Globe Fin. Thru. O.L. v. Radhakishan, the facts were identical, to the extent that the company entered into a construction agreement with the respondent in the year 1956 under which the respondent was to invest and complete construction after which he was to give notice to the company and receive `1,20,000/- within 15 days and if company failed to pay, he had absolute right to dispose of property. The agreement, though with an ostensible colour of a construction agreement, was opined to be one of transfer of interest. In para 7 of the decision it was reported as under:-

7. The claim of the Company is clearly unsustainable for a variety of reasons. In the first instance, it is established on the records that the Company, which admittedly secured perpetual lease of the plot on payment of Rs.15600/- on July 26, 1954 and in terms thereof was under an obligation to put up a building on the plot within a specified period, had neither the intention nor the funds for the purpose and was interested in outright sale or transfer by other mode of all its interest in the lease to save the premium and if possible to make some profit on the investment. This is exactly what the company did when it entered into the construction contract with the respondent no.1 by the agreement of March 19, 1956, Ex. RW ½. It was clearly intended to be an agreement to transfer the company's interest in the plot. These facts and circumstances are fully borne out by the sworn testimony of its former Director, B.K.Bedi, who was examined as RW1. The oral testimony of the former Director is confirmed by a number of contemporaneous documents of unimpeachable veracity. By his letter of March 19, 1956 Ex. RW1/1, the respondent sent his cheque to the Company towards the payment of Rs.17,300/-, claimed by the company to be the "earnest money". The letter, however, describes the payment as "full price" and the letter bears the confirmation of the former Director, who stood by it in his testimony. The two powers of attorneys Ex. R1 and R2 , executed by the Company on 18.7.56 and 19.11.56 in the widest terms leaves no manner of doubt as to the real nature of the transaction and the intention of the parties in relation to the property. It was not disputed that since the agreement the respondent has been paying all taxes leviable on the property whether by one authority or the other, and whether on the land or the construction that was put up on it by the respondent. It was also not disputed that the resolution passed in the meeting of the Board of the Company in its meeting held on Nov. 15, 1957, described the transaction as "Sale of the plot" and this was confirmed further by the assertion in the statement of affairs, filed by the former Director, after the winding up order was made. The Company wrote successive letters to the respondent asking him to expedite the issue of the completion certificate so that the Company "may show the transaction formally in its records as sale". These letters are RW1/4 and RW1/5. EX.RW 4/1 to 7 are copies of the tax records of the respondents which treat the land and the construction on it as the property of the respondent. In the face of all this material there is no escape from the conclusion that the agreement of construction was a mere device adopted to get over the prohibition contained in the lease regarding transfer and the arrangement was an agreement of sale for the consideration paid and received in full by the Company."

23. The facts of the instant case are akin to the facts of CS(OS) No.1597/2006, where also a similarly worded construction agreement was the foundation of a plaint, which was held to be not maintainable at the first instance and even summons in the suit were not issued evidenced by the opening lines of the order rejecting the plaint, which read as under :-

'1. Suit merits dismissal at the threshold. There is no requirement of even issuing summons.'

24. The decision of the learned Single Judge was challenged in appeal and the challenge was negated as per the decision reported as AIR 2008 Delhi 44 Sushil Bhasin & Ors. v. Sandeep Gupta & Ors. Clause 1, 2, 6 and 10 of the agreement which was considered in Sushil Bhasin's case (supra) were identical to similar clauses in the instant agreement, which clauses we have noted in para 14 above, all of which were construed as a case of transfer of title.

25. The fate of this case cannot be different. While concurring with the findings returned by the learned Single judge in rejecting the plaint; returning the findings that the suit seeking declaration for execution of sale deed and Power of Attorney was not maintainable, we are constrained to remark that at the time of entering into construction agreement and execution of General Power of Attorney, the intentions of the plaintiff and defendant No.1 were clear. The construction agreement was entered into in the year 1972 and first round of litigation started in the year 1983. Efforts by Court to check this vexatious litigation at the inception by resorting to the provisions of Order 7 Rule 11 CPC could not deter the vested interest to prolong the litigation till date and the situation is that the construction agreement which was chosen as a device by the parties to transfer the interest in the property has remained a soruce of litigation for four decades. Unprecedented hike in prices of land in Delhi, entry of land mafia, greed to extort more and more; taking advantage of the manner of acquiring the property seem to be the reason behind these litigations. The situation has become so grim that from the record we can gather that even the 'right to litigate' seems to have been sold by the plaintiff under the garb of attorneys to unscrupulous property brokers as observed earlier while referring to the review application. Those having acquired interest in the property in such manner are bound to come across Shylocks with a knife in hand to take a pound of flesh; but the Shylocks cannot draw blood while doing so. In order to put an end to such litigation, some deterrent steps are necessary to be taken so that cases deserving judicial time are taken care of. We quote the observation of the Supreme Court in the decision reported as AIR 1994 SC 853 S.P.Chengalvaraya Naidu (dead) by L.Rs. v. Jagannath (dead) by L.Rs. & Ors. in para 7 of the decision, which read as under:-

"7. The High Court, in our view, fell into patent error. The short question before the High Court was whether in the facts and circumstances of this case, Jagannath obtained the preliminary decree by playing fraud on the court. The High Court, however, went haywire and made observations which are wholly perverse. We do not agree with the High Court that "there is no legal duty cast upon the plaintiff to come to court with a true case and prove it by true evidence. The principle of 'finality of litigation' cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The courts of law are meant for imparting justice between the parties. One who comes to the Court, must come with clean hands. We are constrained to say that more often than not, process of the court is being abused. Property-grabbers, tax evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find the court process a convenient lever to retain the illegal-gains indefinitely. We have no hesitation to say that a person whose case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation."

26. We are confronted with a situation as to how to deal with such unscrupulous litigants so that before invoking the process of law to abuse it, at least they give a second thought. In the given facts and circumstances, we feel that imposing exemplary costs on the plaintiff may help in prevailing better sense on him. Thus we dismiss this appeal imposing a cost of `1,00,000/- (Rupees One lakh only) which shall be received by Sh.K.K.Bhandari.

(PRATIBHA RANI)

JUDGE

(PRADEEP NANDRAJOG)

JUDGE

FEBRUARY 13, 2012

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