Col. S.J. Chaudhary vs Vantage Constn. P. Ltd. & Ors.
2012 Latest Caselaw 3757 Del

$~
 *     IN THE HIGH COURT OF DELHI AT NEW DELHI

                                    RESERVED ON: 13.01.2012
                                    PRONOUNCED ON: 02.07.2012

+            CS (OS) 1286/1990 & CS (OS) 971/2008

      CS (OS) 1286/1990

      COL. S.J. CHAUDHARY                         ...Plaintiff
                     Through: Mr. Abhimanyu Mahajan,
                     Advocate.

                    Versus

      VANTAGE CONSTN. P. LTD. & ORS.                    ...Defendants
                           Through: Mr. H.P. Sharma, Advocate
                           for D-1.
                           Mr. Prashant Bushan, Advocate for D-5-13.
                           Mr. H.P.S. Chawla, D-3 in person.

      CS (OS) 971/2008

      NEI PROPERTIES LTD. & ORS.                  ...Plaintiffs
                    Through: Mr. Prashant Bhushan with
                    Mr. Sumeet Sharma, Advocates.

                    Versus

      COL. S.J. CHAUDHARY & ORS.                  ...Defendants
                     Through: Mr. Abhimanyu Mahajan,
                     Advocate for D-1.
                     Mr. H.P. Sharma, Advocate for D-2&3.




CS (OS) 1286/90 & 971/08                                        Page 1
       CORAM:
      MR. JUSTICE S. RAVINDRA BHAT

      MR. JUSTICE S.RAVINDRA BHAT

% 1. This judgment will dispose of applications in CS (OS)
971/2008, as well as the controversies in Suit No.1286/1990.

2.     The facts giving rise to the present dispute, briefly stated are,
that Col. S.J. Chaudhary (Plaintiff in Suit No.1286/1990 and hereafter
referred to as "the owner") owned property No. 20-A. Friends Colony,
New Delhi, viz. a freehold plot of land measuring 4300 sq. yds. The
owner entered into an Agreement dated 23.4.1987 (hereafter "the 1987
agreement") with Vantage Constructions (first defendant in Suit
No.1286/1990 and referred to hereafter as "the builder"- a term which
also extends to Defendant Nos. 2-4, connected with the first
defendant) in terms of which 54% of the total saleable space in the
residential building proportionately was allocated to the builder by the
owner, in each floor/basement of the building. The builder, in
consideration of the contract, was to develop, construct and build the
residential building and do all acts, deeds and things and undertaking
the obligations contained in the agreement. 46% of the total saleable
space in the said residential building was to remain with the owner
and 54% of the total saleable space of the said building was to be with
the builder, with all rights to develop and construct the property in
question.




CS (OS) 1286/90 & 971/08                                          Page 2
 3.    The builder started construction on the suit property on the basis
of the 1987 Agreement with the owner and further to allocation of
54% of the total saleable space, also entered into different agreements
with Defendants 5- 13 (hereafter "the purchasers") on 4-4-1989 in
respect of various apartments allotted to each of those defendants.
The owner was a party to those agreements. In terms of the 1987
agreement, construction was to be completed by November, 1989 by
the builder; 46% of the total saleable space in the residential building
proportionately on each floor of such building, allotted to the owner
was to be constructed by the builder, for the owner. The building plans
for construction of the flats in the suit property were sanctioned by the
MCD on 12-8-1987. The owner alleged that the builder made several
departures from the sanctioned plan, in such manner that he could not
opt in the manner agreed, and was constrained to opt for the building
constructed, and not sanctioned. These alleged breaches included
construction of ten vertical dwelling units, each with basement,
ground, first and second floor and five also containing mezzanine
floor. This was as against ten horizontal floors which could be
constructed, thus resulting in 14 units as against 10 permissible units.
The second breach alleged was that substantial construction deviated
from the sanctioned plan, and was non-compoundable. The pace of
construction too, was slow and contrary to the three year period for
completion allowed; it stopped in 1988. The architects were also
changed without the owner's consent. It was alleged that the builder
alienated the entire 54% of the proposed construction, recovered Rs.
2.5 crore and diverted those funds for other investments. The owner



CS (OS) 1286/90 & 971/08                                           Page 3
 alleged that the builder got blank papers signed from him to enable
conclusion of five contracts to sell flats i.e. Nos. AO2, C2, B-2 E- and
C-1. The documents signed also included a stipulation that the owner
would not receive more than 40% in advance from intending
purchasers (of the constructed portions); that the money received from
the purchasers would be used for construction.

4.    On these allegations the owner instituted Suit No. 1286/1990
for a declaration that the 1987 agreement stood cancelled and
declarations that the various agreements to sell executed between the
builder and the purchasers (Defendant Nos. 5-13) were inoperative
and void, and for a declaration that the documents executed by the
owner, in blank, on 28-9-1989 and used for executing a contract for
sale of flats B-2 and E-1 to the builders were vitiated by fraud and
misrepresentation, and not binding. The builder, in its written
statement, alleged that there was no breach of agreement (of 1987) and
that whatever deviations in construction took place, were with consent
of the owner. The delay in construction, according to the builder, was
also contributed by the owner. It was alleged that the buildings had
been practically completed in all respects and what remained was a
minor part, such as interior painting, flooring, glazing, electric fittings,
sanitary fittings, completion of boundary wall, etc.

5.    During the pendency of the suit, the owner and purchasers had
jointly filed an application, IA No. 11266/95 under Order 23 Rule 1 &
3 Civil Procedure Code (CPC) for appointment of their nominee as
receiver, which was resisted by the builder. This application was



CS (OS) 1286/90 & 971/08                                              Page 4
 premised upon a settlement arrived at between the flat buyers
(Defendant Nos.5-13 purchasers and the owner). A learned single
judge of the Court allowed the application and other connected
applications, and appointed a receiver to take charge of the property,
in order to oversee its completion. That order was appealed against to
the Division Bench (FAO (OS) No. 73/1996). This was disposed of by
a judgment dated 31-10-1996 in which the learned single judge's
order was modified to the extent that a new receiver, Shri Vinay
Bagla, was appointed in his stead. While disposing of the appeal, the
Division Bench observed and held that:

      "18. The learned counsel for the flat buyers is eminently
      justified in submitting that proportionate with 54% share of the
      built up area to which the builder was entitled under the
      collaboration agreement with the owner, these were the flat
      which were the stake of the builder and having agreed to part
      with his interest in these flats in favour of the flat buyers, the
      builder is left now with practically no interest in the building fr
      him what is left surviving is only the obligations....

      -------                          -------
                --------

22. The abovesaid material available on record leads to a few inferences. He Builder has already agreed to part with his interest in the property which he has acquired under the collaboration agreement entered into by him with the Owner. The Builder has in terms of money already realised much more than what he has invested. He has failed to fulfilthe material terms and conditions of the collaboration agreement. The completion of the building has been grossly and unreasonably delayed. The Builder has indulged into reckless violation of the building bye laws. He has brought into a construction which is full of deviations- serious and mostly non-compoundable. If

CS (OS) 1286/90 & 971/08 Page 5 these deviations are not remedied primarily they are the Owner and flat buyers who are going to suffer.

      -------                          -------
                --------

27. The owner and the flat buyers alone have the interest in the suit property or at least substantial interest in the suit property. The facts and circumstances of the case go to show the plaintiff the owner of the property, having been placed in a tight corner and the defendant No. 5 to 13 the innocent flat buyers having found themselves landed into litigation for no fault of theirs and inspite of having parted with practically full consideration barring a meagre part thereof..."

6. In 2008, the purchasers/ flat buyers filed CS (OS) No. 971/2008, (hereafter called "the purchaser's suit") which has occasioned this judgment, claiming inter alia, for injunction against the defendants, i.e the owner and the builder, for conveyance of title and execution of relevant documents. The suit also sought specific performance of the Agreements to Sell, dated 4th April, 1989 entered into between the owner, the builder, and each of the purchasers. The suit further stated the Plaintiff No. 8 had acquired the rights of one of the nine purchasers Indian Rockwood Co. Ltd and that Orient General Indus Ltd had got merged with Plaintiff No. 9, also an original purchaser. This suit also sought specific performance of an agreement dated 23-11-2006 entered into between the purchaser/plaintiffs and the owner, whereby it was agreed that for a total payment of ` 70 Lakhs to the owner, conveyance deeds would be executed in favour of the purchaser. The suit mentioned the previous facts, relating to the joint venture agreement of 1987 between the Owner and the builder, the

CS (OS) 1286/90 & 971/08 Page 6 agreements to sell executed between the builder and the purchaser (to which the owner was confirming party) on 04-04-1989, the order of the Division Bench, relating to appointment of a receiver, and the handing over of the units, after construction, by the receiver, with permission of the court - through its order dated 20-7-2006.

7. In the purchaser's suit, the owner, arrayed as first defendant, denied that a decree for specific performance of the agreement dated 23-11-2006 could be granted. It is submitted in the written statement, that the owner's previous suit, No. 1286/1990 sought for declaration that the agreements entered into with the purchasers, on 4-4-1989 are void and unenforceable. If those reliefs were to be granted, the claim in the purchaser's suit, of 2008, would be rendered infructuous. It is also stated that the purchasers did not file any written statement in that suit, which led to an admission of the owner's claim in those proceeding. The owners also sought to highlight that the agreements of 4-4-1989 were entered into for purchase of nine specified dwelling units, which were eventually converted into five units, with an area more than the original area in the agreements. Therefore, the agreements of 1989 were rendered void. The owner also argues that in the said Suit. No. 1286/1990, the present plaintiff, i.e the purchasers, had claimed the same reliefs, i.e of a direction for conveyance of title pursuant to the agreement dated 4-4-1989 through an application; that application was, however, withdrawn. Consequently, the purchasers cannot seek the same relief, even though under a separate suit. The owner also avers that though constructed portion falling to his share

CS (OS) 1286/90 & 971/08 Page 7 (towards the 46% share) did not match the specifications agreed with the builder, and has sought to list them out. The written statement of the owner also avers that:

"...On the pretext of amicably settling the matter, the Purchasers forced the answering Defendant to enter into an Agreement on 23.11.2006, and imposed unilaterally conditions upon him. As per the said Agreement, the Purchasers, inter alia, agreed to pay him amounts upto Rs. 70 lakhs for carrying out modification and repair work in the flat of the answering Defendant, only if he signed the Agreement as set out by them and also support the Application filed by them being IA No. 11342/2006 in Suit. No. 126/90 seeking conveyance of the claimed dwelling units to them. It is stated that despite this coercion, the answering Defendant was at all times ready and willing to perform his obligation under the said Agreement, however, the Purchasers sought to delay the performance of those obligations by the answering Defendant for reasons best known to them. Inspite of the answering Defendant having done and/or wiling to do what was required of him under the said Agreement, the Purchasers have failed and/or neglected in making payment of the amounts to the answering Defendant, purportedly on account of the pendency of IA 11342/06 in Suit. No. 1286/1990. The said IA has been thereafter withdrawn by the Purchasers on 29-9-2008. The agreement dated 23-11-2006 was entered into by the answering defendant on the assurance of the Purchasers that the amounts payable to the answering Defendant under the said Agreement would be paid shortly.

However, after the lapse of more than two years, only an amount of Rs. Ten lakhs has been paid by the Purchasers that too in discharge of the Bank Guarantee that was given for completing the construction in respect of one of the units bearing Nos. E1 and B2, wcih was his due in any case. It is stated that the Plaintiffs herein are in

CS (OS) 1286/90 & 971/08 Page 8 breach of their obligation under the said Agreement and the said Agreement stands cancelled. The amount stated in the said Agreement are not sufficient to renovate or modify even one flat falling to the share of the answering Defendant. It is further stated that the Plaintffs were never ready and willing to perform the said Agreement and cannot seek specific performance of the same. It is stated that the answering Defendant had vide notice dated 12th October 2007 stated that he was ready and willing to execute the Conveyance Deed in favour of Purchasers of the flat in question, however, the payment to the answering Defendant could not be made dependent upon the Builder executing the Conveyance Deed..."

8. The Builder, in the written statement to the Purchaser's suit argues that the action is bad for multifariousness and that a decree for specific performance cannot be granted in respect of the agreement dated 23-11-2006 since it is not a party to the same. The builder also argues that the main relief in this suit, is contrary to the relief sought in CS (OS) 1286/1990. It is also argued that as far as the Purchaser's suit seeks specific performance of the agreements, dated 4-4-1989, it is hopelessly barred by limitation. In this regard, it is submitted that since the owner obtained all requisite permissions in 1989, pursuant to that agreement, the time prescribed for enforcement of the same commenced then itself. The Builder, like the owner, relies on the fact that the Purchasers had not filed any written statement in Suit No. 1286/1990; therefore, they cannot claim any relief through a time barred action. It is also submitted that the order of the Division Bench, in appeal on the receiver's application datd 31-10-1989 had the effect of rendering the previous agreement of 4-4-1989, ineffective and void, because contrary to the latter, the subject matter of which was nine

CS (OS) 1286/90 & 971/08 Page 9 residential units of specific area, the latter order had permitted the making of maximum five residential or dwelling units, in Blocks A, C and D, of the suit property. It is also stated that the nine agreements of 4-4-1989 were in respect of nine units, and a total area of 24050 square feet, i.e A1, A2, C1, C2, D1 and part of D2. However, the relief sought in the Purchaser's suit is at variance with what is claimed in the agreement, and its annexures. It is further argued in this context that the area of the five units, for which specific performance is sought, is larger than the sum total of the area in the nine agreements to sell, dated 4-4-1989. The Builder also submits that it has an interest in the roof rights i.e 17% Floor area ratio (FAR) pertaining to the 54% share of the Purchaser's right and interest, in the suit property, and consequently it would be inappropriate to direct conveyance in the manner claimed.

9. During the pendency of the purchasers' suit, and after the defendants (i.e the owner and the builder) had filed their written statements, an application IA 5153/2009 was filed, claiming a decree on admissions, under Order 12 Rule 6, CPC. This application highlights that the Builder had entered into the agreements for sale of the units to the purchaser, on 4-4-1989, and that during the pendency of the suit filed by the owner, an application for appointment of receiver was dealt with, and the Division Bench directed completion of construction. It is also submitted that the units, which were subject matter of the order (and the said agreements of 1989) were handed over, pursuant to permission of the court, in the pending suit.

CS (OS) 1286/90 & 971/08 Page 10 Thereafter, the owner and the purchaser entered into the agreement for conveying title in respect of the nine residential units, which had been built up into 5 residential units, on 23-11-2006. The owner was to receive certain sums (Rs. 70 lakhs). The Purchaser submits that these two agreements, of 1989 and 2006 have not been disputed. The defendants, i.e the owner and builder, have also not disputed other facts pertaining to the arrangement arrived at leading to completion of construction, and the handing over of possession, as well as issuance of completion certificate. The Purchaser has sought to highlight averments in the written statements of the owner and the builder, which amount to admissions. It is argued that as a result of these, the court should decree the suit (OS 971/2008). During the submissions, it is also argued by the purchaser that the previous suit, CS (OS) 1286/1990 has been rendered redundant and infructuous. In this regard, reliance is placed on the agreement entered into between the owner and the purchasers, leading to filing of a joint application for appointment of receiver, the order of the Division Bench, construction of various portions, their handing over, with permission of the court and the fact that this was not opposed by the owner

10. In the reply and arguments on behalf of the owner, it is submitted that there is no admission either in the pleadings, or on the record of the suit, or the connected matters, which would entitle the Court to issue an order directing the drawing of a decree in terms of Order 12 Rule 6 CPC. It is submitted that for such a relief, the admissions should be unambiguous and unconditional. The owner

CS (OS) 1286/90 & 971/08 Page 11 argues that the agreement of 23-11-2006 and conveyance of title pursuant to it, were not unconditional, and depended upon previously agreed acts. The plaintiff/purchaser had to pay agreed amounts, and also abide by the result of an application pending in Suit No. 1286/1990. Both these were not fulfilled by the purchaser. Furthermore, the owner's relief in CS (OS) 1286/1990 was for a declaration that the agreement with the builder, of 1987 and the nine agreements of 1989, between the builder and the purchaser, were not enforceable. The purchaser had withdrawn the application, (IA 11342/1990) which found express mention in the agreement of 23-11- 2006. Further, the owner had specifically averred in the written statement that the portion of the property handed over to him after it was built, under orders of court, did not match the agreed specifications, and huge sums of money, and not merely the Rs. 70 lakhs mentioned in the agreement dated 23-11-2006, were sufficient for that purpose. It is also stated that the agreement of 23-11-2006 stood cancelled on account of the notice issued by the owner in that regard.

11. It is argued that the agreement dated 23.11.2006 was entered into by the owner on the purchaser's assurance that the amounts payable to him (the owner) under the agreement would be paid shortly. However, after lapse of more than two years, only an amount of Rs. Ten Lacs was paid by the purchasers that too in discharge of the Bank Guarantee given for completing the construction in respect of

CS (OS) 1286/90 & 971/08 Page 12 one of the units bearing Nos. E1 and B2 which was his due, in any case.

12. The owner also argues that the purchasers were never ready and willing to perform their obligations under the said Agreement dated 23.11.2006 and are precluded from seeking specific performance of the same. It is stated that the owner, had through notice dated 12th October 2007 stated that he was ready and willing to execute the Conveyance Deed in favour of the purchasers. However, the plaintiffs could not make the payment to the owner dependent upon the Builder executing the Conveyance Deed. The purchasers were in breach of their obligation under the said Agreements which stood cancelled. Counsel for the owner submitted that there is no question of events subsequent to the institution of CS (OS) 1286/1990 such as the application for appointment of receiver, the order of the Division Bench, the handing over of the property towards his (owner's) share, and the agreement of 23-11-2006, rendering the relief in the previous suit, infructuous. It is submitted that the said suit filed by the owner cannot be dismissed, or rejected in the manner argued by the purchasers.

13. The Builder argues that there are several triable issues, which require adjudication. The Purchaser cannot seek a decree only on the basis of the agreements dated 4-4-1989 and the later agreement dated 23-11-2006, to which it (the builder) is not a party. It is also argued that the owner and purchaser had entered into an agreement in 1996 with each other, to which the builder is not a party. Counsel for the

CS (OS) 1286/90 & 971/08 Page 13 builder emphasized that when several questions, requiring adjudication, such as limitation, multifariousness, maintainability of the suit, on account of the original collaboration agreement itself being in dispute, are to be addressed by the court, a court cannot draw a decree on admission of some facts. For a decree to be drawn the totality of the defence of the concerned parties and the entirety of the circumstances, deducible from an overall reading of the pleadings and documents on the record, are to be considered.

14. Counsel relied on the judgment of the Supreme Court reported as Faquir Chand v Uppal Agencies 2008 (10) SCC 345 to say that a joint venture, or collaboration agreement is more in the nature of a partnership. The agreement entered into in 1987 by the Builder with the owner thus conferred inviolate rights on the former, including ownership rights in respect of at least 54% share in the constructed portion of the property, and all other appurtenant rights. These included the right to construct upon such portions of the suit premises, as were not the subject matter of the nine agreements between the builder and the purchaser. Thus, the builder is entitled to 17% FAR rights in respect of the roof and other unspecified portions of the suit plot. Without a full trial and adjudication of those rights, the court cannot direct a decree to be drawn in the manner suggested by the plaintiff purchaser.

15. Both parties, i.e the owner and the builder argued that unless there is a clear and unequivocal admission, the Court cannot draw a decree under Order 12 Rule 6 CPC. They relied on the decision of the

CS (OS) 1286/90 & 971/08 Page 14 Supreme Court in Uttam Singh Duggal & Co. Vs. United Bank of India & Ors 2000 (7) SCC 120, and the later judgment in Jeevan Diesel & Electricals Limited Vs. Jasbir Singh Chadha & Another, (2010) 6 SCC 601. In the latter decision, i.e Jeevan Diesel, it was held that:

"whether or not there is a clear, unambiguous admission by one party of the case of the other party is essentially a question of fact and the decision on this question depends on the facts of the case. This question, namely whether there is a clear admission or not cannot be decided on the basis of a judicial precedent."

It was emphasized that in order to infer whether the party concerned had made an unequivocal admission, it is not one portion of the pleading that is relevant, but the entirety, which has to be considered.

16. The above discussion would reveal that on 23-4-1987, the builder and owner entered into an agreement regarding the development, construction and rights of the parties on the suit plot. According to this, the owner had the right to 46% share of the property, after it was built upon. The rest, i.e 54% of the total saleable space in the residential buildings proportionately on each floor was allocated to the Builder. The latter started construction, pursuant to the 1987 agreement. The owner, and builder entered into agreements with the purchasers allocating different apartments to each of the purchasers in the residential block. The purchasers alleged that the builder spent about Rs. 1.00 crore for construction, whereas according to him (the builder) Rs. 2.00 crores had been spent in that regard. Plans were sanctioned by the municipal and other authorities to aid

CS (OS) 1286/90 & 971/08 Page 15 construction. Serious disputes arose between the owner and the builder in respect of the building being constructed on Plot No. 20-A. In this background, the owner filed Suit No. 1286/1990, claiming the following reliefs:

" 1) a decree of declaration, declaring that the collaboration agreement dated 23-11-1987 stands cancelled and is inoperative and not binding on the plaintiff and that the plaintiff has, therefore, no obligations thereunder to the defendants and that the defendants have no rights subsisting thereunder or arising out of that agreement.

2) a decree of declaration that the various Agreements to sell used by defendants 1 and 2 for purposes of entering into further contracts with third parties including defendants 5 to 13 and on which the plaintiff‟s signatures were obtained as a confirming party are vitiated, inoperative and void and that the plaintiff is not bound by the terms of any of those agreements used by defendants 1 and 2.

3) a decree of declaration at the documents being agreements to sell executed by the plaintiff in blank on 28.8.1989 and which have been used for purposes of signing a contract for sale of flats B-2 and E-1 to defendants 1 and 3 respectively are duly cancelled and vitiated by fraud and misrepresentations and are void and are as such not binding on the plaintiff and create no rights in favour of the defendants 1 and 3;

4) a decree of declaration that the plaintiff has the immediate right to undertake demolition of the building and structure put up by the defendant 2 pursuant to the agreement dated 23-4- 1987 or alternatively order the demolition of the said structures constructed by defendants 1 and 2 in view of the fact that the said structures are in violation of the sanctioned plan and are in violation of the building bye laws and are in violation of the condition imposed by the competent authority under the Urban Land Ceiling and Regulation Act, the Municipal Corporation of Delhi and the Delhi Administration.

CS (OS) 1286/90 & 971/08                                          Page 16
        5)     Issue a permanent injunction restraining defendant Nos.

1 and 13 from entering upon the plaintiff‟s property 20-A Friends Colony, New Delhi or any part thereof and further restraining the said defendants, their employees and agents from in any way directly or indirectly interfering with the peaceful use and enjoyment of the said property of the plaintiff.

6) Issue a permanent injunction restraining the defendants from exercising or asserting any rights under or pursuant to any of the agreements executed by the plaintiff and referred to in the plaint;

7) restraining the defendants and their agents and employees from interfering with or obstructing the demolition of the said construction"

17. The purchasers and the builder had entered into agreements for the sale of 54% of the constructed building (on the suit property) falling to the share of the builder. The owner was made as confirming party to each of those agreements, dated 4-4-1989. During pendency of Suit No. 1286/1990, the court had directed inspection, by an officer of the MCD, and preparation of a report about the deviations. After receipt of that report, an application for appointment of a receiver was made. The owner and the purchasers reached an agreement, in respect of that application. It would be worthwhile to notice the terms of that agreement, which were embodied in a joint application, under Order 23, CPC (IA 11296/1995) filed in CS (OS) 1286/1990:

"That the following settlement has been arrived at between the Plaintiff and Defendants 5 to 13, which may be recorded and an Order in terms thereof may be passed by this Hon‟ble Court in I.A.11266 of 1995 in Suit No.1286 of 1990.

1. The Plaintiff has in consideration of the assurance and representation made by Defendants 5 to 13 stated herein after

CS (OS) 1286/90 & 971/08 Page 17 and without prejudice to his rights and contentions against the Defendants 1 to 3 agreed to terms hereof subject however to the application being accepted and allowed by the Hon‟ble Court.

2. That the Receiver will at the cost of the Defendants 5 to 13 make arrangements for completing the construction of the Units allocated to Defendants 5 to 13, namely A-1, A-2, C-1, C-2 and D (part) totaling up to an area 54% of the built-up area and subject to a maximum of 5 dwelling units. The receiver will also at the same time and at the cost of the Defendants 5 to 13 take steps for completing the following flats falling to the share of the Plaintiff, namely B-1, E-2 and D (part). As soon as, the construction of these flats is completed and completion certificate obtained, possession of the respective flats shall be simultaneously given to the Plaintiff and Defendants 5 to 13.

3. So far as, the flats E-1 and B-2 falling to the share of the Plaintiff, the Receiver shall not proceed to complete the construction there of at this stage. However, at the option of the Pliantiff and on his so intimating the receiver, he shall also complete the construction of either flat E-1 or B-2 and obtain the completion certificate in respect of the same. For this purpose, the Defendants 5 to 13 shall furnish a Bank Guarantee to the Plaintiff in a sum of Rs.10,00,000/- within a period of 15 days from the date of the making of the Order of the High Court appointing a Receiver in terms of this Settlement. The Bank Guarantee will be discharged after either flat E-1 or B-2 has been completed, completion certificate obtained and the possession handedover to the Plaintiff.

4. The Plaintiff‟s flats shall be completed according to the stipulation relating to first class construction in terms of clause 5 of the agreement dated 23.4.1987 between Plaintiff and Defendant 1.

5. In consideration of the Defendants 5 to 13 agreeing to get the Plaintiffs flats as mentioned aforesaid completed at their own expenses, the Plaintiff hereby assigns his rights to obtain compensation from the Defendants 1-3 in favour of the Defendants 5 to 13. This is without prejudice to the individual

CS (OS) 1286/90 & 971/08 Page 18 rights of the Defendants 5 to 13 of recovering damages against the builder on account of breach of their own contracts dated 4 th April, 1989.

6. The Receiver may please be vested with the following powers: -

(i) to file plans, application etc. as may be required to obtain requisite approvals/sanctions and authorization for the completion of the flats including the flats falling to the share of the Plaintiff.

(ii) to engage Architects contractors labour etc. for the completion of all the flats.

(iii) to apply for and obtain completion certificate (s) Form C and D, electrical and water connection etc. for all flats.

7. At the request of the Defendants 5 to 13, the Plaintiff has agreed to their nominee Mr. Vinay Bagla S/o Shri S.N. Bagla R/o 30-A/1, Friends Colony (West) New Delhi, being appointed the Receiver, on the said Defendants jointly and severally agreeing to: -

     (a)     bear all costs of the Receiver;
     (b)     bear all costs relating to the construction and completion

of the Plaintiff‟s aforesaid flats and paying the charges/interests, fees and other demands of the MCD and other local/statutory authorities;

(c) Keep the Plaintiff fully indemnified against all costs of the Receiver and against all losses and damages suffered by the Plaintiff on account of any action/inaction on the part of the Receiver.

     Sd/-                                           Sd/-
     PLAINTIFF                                 DEFENDANTS 5 TO 13"




CS (OS) 1286/90 & 971/08                                          Page 19

18. The owner, in the written statement in the present case (the purchaser's suit) has admitted about the agreement to sell entered into by the purchaser and the builder:

".....the Defendant No.2 herein entered into separate agreements dated 4th april 1989 with plaintiff nos. 1 to 7 herein, M/s. Indian Rock Wool Co. Ltd. And Oriental General Indus Ltd. (Purchasers) for sale of 54% of the said area."

The owner, however alleged that those agreements were vitiated by misrepresentation on the part of the owner. He admitted about the settlement arrived at by him and the purchasers, leading to the order of the Division Bench in 1996, and the appointment of a receiver. The owner has described these, in the written statements, portions of which are extracted below. In Para 1 (c), the owner avers that:

".....a settlement was arrived at between the answering defendant and the purchasers herein, .....Some of terms of the settlement were as follows:

(i) The Receiver will at the cost of the purchasers make arrangements for completing the construction of the units allocated to the purchasers totaling upto an area of 54% of the built up area and subject to a maximum of 5 dwelling units. The Receiver will also at the cost of the purchasers take steps for completing the following flats falling to the share of the answering defendant herein, namely B1, E2 and D (part). As soon as the construction of these flats is completed and completion certificate obtained, possession of the respective flats shall be simultaneously given to the answering defendant and the purchasers.

(ii) ......

CS (OS) 1286/90 & 971/08 Page 20

(iii) At the request of the purchasers, the answering defendant agreed to Mr. Vinay Bagla being appointed the Receiver. The purchasers were to bear all costs of the Receiver, and bear all costs relating to the construction and completion of the flats and paying the charges/interests, fees and other demands of MCD and other local/statutory authorities."

In para (d) of the written statement, the owner avers that:

"(d) The said application being I.A. No. 11266/1995 as well as other applications for appointment of receiver were disposed of by order dated 12.01.1996 and the defendant no.3 herein was appointed as a Receiver of the suit property. The answering defendant herein (FAO (OS) 73 of 1996) as well as defendant no.2 herein (FAO (OS) 126/1996) filed appeals against the said order. The appeals were disposed of by an order dated 31.10.1996 of the Division bench of this Hon‟ble Court. While disposing of the appeals and setting aside the appointment of defendant no.3 as the Receiver, the Division Bench, interalia made the following directions:

(i) Shri Vinay Bagla is appointed the Receiver who shall complete the remaining construction of the building subject to revalidation of the plans by the MCD and other local/statutory authorities.

(ii) the receiver will at the cost of the purchasers make arrangements for completing the construction of units allocated to the purchasers.....Receiver will also at the cost of the purchasers take steps for completing flat nos. B1, E2 and D2 (part) falling to the share of the answering defendant herein.

(iii) .......

CS (OS) 1286/90 & 971/08 Page 21

(iv) As soon as the construction is completed and completion certificate is obtained possession of the respective flats shall be delivered simultaneously to the purchasers and the answering defendant herein subject to the previous permission by the Trial Court.

(v) The Receiver may at the option of the answering defendant herein also complete the construction of any one of the other units and obtain the completion certificate in respect of the same.

(vi) The purchasers shall furnish a bank guarantee in a sum of Rs. 10 lakhs which will be liable to be discharged after the units have been constructed in accordance with the option of the answering defendant, completion certificate obtained and possession handed over to the answering defendant."

It is also a matter of record, that the owner admitted that possession of the constructed units, was handed over pursuant to court's permission, and that occupancy certificate was issued. Apart from the admission in the pleading, the recital in the Agreement of 23-11-2006 between the owner and the purchasers, records this, inter alia, in the following manner:

"Whereas the construction of dwelling units, as described in Schedules A & B, was completed by the Receiver and Completion Certificate obtained on 19.6.2006;

Whereas, after receiving the permission of the Court vide its Order dated 20.07.2006, the Receiver handed over possession of dwelling units as described in Schedule A and B to the Purchaser Companies and Owner respectively and the receipt whereof was acknowledged by the parties hereto;

CS (OS) 1286/90 & 971/08 Page 22 Whereas the Owner now avers that certain finishing related work, meeting the requirement of first Class construction as agreed is yet to be done in the Dwelling units possession whereof has already been received by him..."

19. The owner's argument against a decree on admission is that in the written statement the issue of limitation, cancellation of the agreement dated 23-11-2006, pendency of the suit instituted by him, and the issue of quality of construction, are to be adjudicated after a full trial.

20. The builder's written statement - as indeed pleadings and several documents filed by the parties, including the order of the Division Bench, in the other suit, all of which are on the record, in this suit, and have not been denied either by the owner or the builder- several admissions have been made. These are reproduced hereafter. The said written statement of the builder has this to say about the agreements to sell with the purchaser:

"It is submitted that nine Agreements to Sell dated 04.04.1989 were entered into between the plaintiffs. Defendant No.2 (builder) and the Defendant No.1 (owner) as confirming party."

In terms of the said agreement (as per its stipulations) the builder has sold "constructed area with the undivided proportionate share in all rights, title and interest of the owner and the building in the land with rights easements and right of further construction fully described in Annexure-„C‟ hereto forming the part of builder‟s allocation....."

CS (OS) 1286/90 & 971/08 Page 23 The builder's written statement (Para 3) admits that settlements were entered into between the owner and the purchasers:

"That during the pendency of the said suit, in an application for appointment of Receiver on behalf of the plaintiffs, the registered as I.A. No. 8565/1995, a settlement was arrived at between the plaintiffs and the defendant no.1.....As per the said settlement, the Receiver, nominee of the plaintiffs was to complete the construction of the unit allocated to the plaintiff namely A1, A2, C1, C2, D (part) totalling upto an area of 54% of the built up area....Receiver was also to complete the flats B1 and E2 and part of D2 falling to the share of defendant no.1 at the cost of plaintiffs......"

The written statement (Para 3) further admits that the agreement was approved by the Division Bench, in its judgment dated 31-10-1996

".....the Hon‟ble Division Bench partly allowed the appeal filed by the plaintiffs and set aside the appointment of the defendant no.3 as receiver and made amongst other directions that the Receiver, nominee of the plaintiffs will at the cost of the plaintiffs make arrangement for completing the construction of units allocated to them namely A1, A2, C1, C2, D1 and D2 (part) totalling upto an area of 54% built up area......As soon as the construction is complete and the completion certificate is obtained, possession of the respective flats shall be delivered simultaneously to the Defendant No.1 and the plaintiffs subject to the previous permission of the Trial Court."

21. The builder has admitted that all its applications filed in court, before Single Judge and the Division Bench urging the issue of nullity (of the nine agreements to sell (dated 4-4-1989) as a result of the directions of the Division Bench's order dated 31.10.1996, because there were nine agreements for nine flats yet the direction was to construct only five flats) were dismissed. This is also borne out by the

CS (OS) 1286/90 & 971/08 Page 24 order sheet in CS (OS) 1286/1990 and connected proceedings, to which the builder is concededly a party. There is a specific reference to this contention and the builder's attempt to get such order in the pending suit, by the owner, in Para 3 of the builder's written statement:

"As a consequence to the directions dated 31.10.1996 passed by the Hon‟ble Division bench, the said 9 agreements to sell dated 4.4.1989 have become null, void, inoperative, frustrated and incapable of performance, therefore, the defendant no.2 moved an application under Section 151 CPC before the Hon‟ble Division Bench to clarify the situation developed in view of the directions dated 31.10.1996 passed by this Hon‟ble Court. The defendant no.2, in view of the orders dated 21.03.1997, passed by the Hon‟ble Division Bench, on application under Section 151 CPC of the defendant no.2 seeking clarification in view of the situation that developed after passing of the directions dated 31.10.1996, moved an application before the learned Single Judge in Suit No. 1286/1990 and again before the Hon‟ble Division Bench against order dated 7.7.1997 passed by the learned Single Judge in the said application in the appeal that the said agreement to sell had become null, void, inoperative, frustrated and incapable of performance."

22. The builder, again in the written statement, admitted that possession of flats have been given to the plaintiffs (purchasers) by this Court;

"37(iii) I reply to this para it is submitted that this Hon‟ble Court in an application registered as I.A. No. 7677/2006 allowed the Receiver to hand over the possession of flats B1, E2 and part of D2 to the defendant No.1 and flats A1, A2, C1, C2, D1 and part of D2 to plaintiffs therein."

CS (OS) 1286/90 & 971/08 Page 25 The builder had filed a review application against the order dated 20 th July, 2006 through which possession of the flat was given to the purchasers. That application was dismissed by order dated 31.05.2007 with costs. The first appeal to the Division Bench against the said order was also dismissed by the Division Bench on 31.10.2007, by its order.

23. From the above discussion, it is apparent that the parties concerned, i.e the owner, the builder and the purchasers agree about the following events:

(1) Execution of the 1987 agreement between the owner and the builder, whereby the latter was entitled to develop and construct upon the property, and entitled to 54% of the constructed portion, the rest being the owner's share;

(2) Execution of agreement between the purchasers and the builder, on 4-4-1989, whereby nine residential units were agreed to be sold to the former, constituting the 54% constructed portion falling to the share of the builder, in the 1987 agreement;

(3) An agreement presented before the court, arrived at between the owner and the purchasers; the agreement was embodied in an application under Order 23 CPC, supported by an affidavit duly executed by the owner, spelling out the respective rights of the parties;

CS (OS) 1286/90 & 971/08 Page 26 (4) Order of the Division Bench, dated 31-10-1996, whereby a receiver was appointed, for completing construction over the entire property.

(5) Finality of the above order of the court, by virtue of all parties accepting it, and acting upon it.

(6) Completion of construction of both portions - 54% (builder's share, which originally was 9 residential units, and became 5 units, for the same area, as a result of the order of Division Bench dated 31-10- 1996) and 46% owner's portion.

(7) Issuance of completion certificate in respect of both portions;

(8) Handing over of possession, in 2006, pursuant to order of court, to both parties, i.e. the purchasers, and the owner. The builder sought recall of the order permitting possession to be handed over; the review application was dismissed. The appeal to Division Bench too was rejected.

(9) Agreement dated 23-11-2006 between the owner and the purchaser, whereby the former was to be paid Rs. 70 lakh, and for conveyance of title to the property.

24. With the above factual backdrop, and sequence of events, it would be necessary now to discuss the arguments of the owner and the builder that a decree on admission cannot be granted. The first contention is that the suit, as it seeks a decree for specific performance

CS (OS) 1286/90 & 971/08 Page 27 is time barred. The argument here is that the agreements which are sought to be enforced through decree of specific performance were entered into on 4-4-1989 and the purchasers should have moved the court in a timely manner, for the reliefs they now seek in their 2008 suit.

25. Article 54 of the Schedule to the Limitation Act, 1963, which is relevant in this regard, reads thus:

"54. For specific performance Three years The date fixed for the performance, of a contract or, if no such date is fixed, when the plaintiff has notice that performance is refused."

In the decision reported as R.K. Parvatharaj Gupta v. K.C. Jayadeva Reddy (2006) 2 SCC 428 the Supreme Court explained the position as follows:

"9. In terms of the said Article, a suit for specific performance of a contract is required to be filed within three years; in the event no date is fixed for the performance, within a period of three years from the date when the plaintiff has notice that performance is refused. The notice dated 24.04.1984, thus, is required to be construed in the context of the agreement dated 13.10.1982 entered into by and between the parties.

10. There cannot be any doubt whatsoever that in respect of a contract for sale of immovable property, time is not of the essence of the contract, but the question as regard the conduct of the Appellant must be considered in the backdrop of the events noticed..."

CS (OS) 1286/90 & 971/08 Page 28 In a subsequent judgment, Gunwantbhai Mulchand Shah and Ors v Anton Elis Farel & Ors 2006 (3) SCC 634, the position was reiterated in the following manner:

"...in a case where no time for performance was fixed, the court had to find the date on which the plaintiff had notice that the performance was refused and on finding that date, to see whether the suit was filed within three years thereof. We have explained the position in the recent decision in R.K. Parvatharaj Gupta v. K.C. Jayadeva Reddy (2006) 2 SCC 428 . In the case on hand, there is no dispute that no date for performance is fixed in the agreement and if so, the suit could be held to be barred by limitation only on a finding that the plaintiffs had notice that the defendants were refusing performance of the agreement. In a case of that nature normally, the question of limitation could be decided only after taking evidence and recording a finding as to the date on which the plaintiff had such notice."

26. The only reference to time found in any document in the present case, is in clause 6 of the Agreements dated 4-4-1989; it provides that the builder shall complete construction in accordance with specifications by 30-11-1989. Apart from that, the obligation of the builder to convey title was spelt out in Clause 8; it was subject to the purchaser obtaining the requisite permissions under (the then prevailing) Chapter XX of the Income Tax Act, and (the now repealed) Urban Land (Ceiling and Regulation) Act. The allusion to those conditions was in view of the prevailing legal requirement.

However, with the repeal of those statutory preconditions, those conditions are ineffective as on date - they were also ineffective when the suit was filed, in 2008.

CS (OS) 1286/90 & 971/08 Page 29

27. So far as the Agreement between the owner and the purchasers (dated 23-11-2006) is concerned, it would be relevant to extract the material parts. They inter alia, read as follows:

"...Whereas the construction of dwelling units, as described in Schedules A & B, was completed by the Receiver and Completion Certificate obtained on 19.6.2006;

Whereas, after receiving the permission of the Court vide its Order dated 20.07.2006, the Receiver handed over possession of dwelling units as described in Schedule A and B to the Purchaser Companies and Owner respectively and the receipt whereof was acknowledged by the parties hereto;

Whereas the Owner now avers that certain finishing related work, meeting the requirement of first Class construction as agreed is yet to be done in the Dwelling units possession whereof has already been received by him;

Whereas without admitting any liability or acceding to the averments of the Owner and further without prejudice to its rights and contention in the matter, with a view to amicably settle the matter with the Owner and also to buy peace and maintain cordial relations in business interest, the Purchaser Companies have agreed, at the request of the Owner, to pay him certain sum of money upon the terms provided hereinafter;

Now this Agreement witnesseth as follows:

1. The Purchaser Companies shall pay to the owner a sum of Rs.10 lacs in discharge of the Bank Guarantee as also in complete discharge of their obligation of completing the construction of any of the dwelling units bearing Nos. E1 & B2. The payment of the sum of Rs.10 lacs as stated above shall be made by the Purchaser Companies to the owner on fulfilling following conditions to the satisfaction of the Purchaser Companies: -

(a) The Owner, signing this Agreement and;

CS (OS) 1286/90 & 971/08 Page 30

(b) Also the Owner filing in the Hon‟ble Delhi High Court reply in support of the Application bearing CM No.11342/2006 filed by the Purchaser Companies in Suit No.1286 of 1990.

2. The Purchaser Companies, as a gesture of goodwill and to buy the peace and also to amicable settle the matter with the Owner once for all, agree to pay a further sum of Rs.40 lacs to the Owner for carrying out certain modification and repair work in the dwelling units (as described in Schedule B), possession of which have been handed over to the Owner. The payment of the said sum of Rs.40 lacs as stated above shall be made by the Purchaser Companies to the Owner only when the application bearing CM No.11342/2006 filed by the Purchaser Companies in Suit No.1286 of 1990 is allowed by the Hon‟ble Delhi High Court and also when the Owner executes an Irrevocable Specific Power of Attorney in favour of Mr. Vinay Bagla, the receiver for executing, on behalf of the Owner, the Conveyance Deed and all other documents and applications as may be needed to effectively transfer/convey the Dwelling units mentioned in Schedule A in favour of the Purchaser Companies and / or their nominees/assigns.

3. That, the Purchaser Companies, on paying Rs.50 lakhs (10+40 lakhs) to the Owner, will be absolved from all responsibilities and obligations whatsoever in respect of the dwelling units as described in Schedule B and also of the dwelling units bearing No.E1 & B2. On making the payment of aforesaid sum, the Purchaser Companies will not be liable in any manner for the construction, maintenance, repair, modification etc. in respect of the dwelling units mentioned in Schedule B and Dwelling units bearing nos. E1 & B2, except as provided for in Para 5, hereinafter.

4. The Owner agrees to sign all the relevant papers, documents etc. in the eventuality of any re-development of the area of the said Premises belonging to the Purchaser Companies is undertaken by the Purchaser Companies or their nominees or prospective buyer, and likewise the Purchaser Companies shall, if so required by the Owner. This would include applications for obtaining sanction for constructing additional area to the extent permissible and in proportion to

CS (OS) 1286/90 & 971/08 Page 31 the proportionate FAR as per the then prevalent FAR norms from MCD, demolishing existing construction and building, new construction and/or modification of existing construction, submission of revised/modified/new building plans to MCD and other Govt. Agencies, applying to various Govt. and Local bodies for Approval, Permission and Sanction, Signing, Drawing and all other documents relating to the said area of the Purchaser Companies.

5. After the Owner has complied with all his above obligations, then simultaneously when the Conveyance of all the Apartments described in Schedule - A is signed by or on behalf of the Builder and the Owner and registered for effective transfer of Title in favour of the Purchaser Companies or their nominees, the Purchaser Companies shall pay to the owner a further sum of at least Rs.15 lacs but not exceeding Rs.20 lacs, at the discretion of Mr. Vinay Bagla, subject to the Owner giving an Undertaking that until at least the 3 dwelling units in Schedule - B are completed in a manner and style commensurate with the amounts received by the Owner, the Owner shall not convey or otherwise create third party rights, interest or title in the same."

28. It is apparent from both the agreements (dated 4-4-1989 and 23- 11-2006) that there was no stipulation about the time for performance. The time given for construction was not adhered to, by the builder. Within a few months, in 1990, the owner filed Suit No. 1286/1990 claiming various reliefs. Eventually, by an order (dated 31-10-1996) the Division Bench appointed a receiver, who took charge of oversight of the construction; that was completed, and on 20th July, 2006, the court granted permission to hand over possession to the owner and the builder, which was done. It was after this event, that the owner and builder entered into an agreement, on 23-11-2006. The latter

CS (OS) 1286/90 & 971/08 Page 32 agreement has to be understood in the context of the previous developments, which led to completion of construction. Significantly, though the said 23-11-2006 agreement was not qualified as regards time, it did contain a stipulation - that the owner would file a reply to an application "CM No.11342/2006 filed by the Purchaser Companies in Suit No.1286 of 1990". In that application, the purchasers had sought for a direction to the owner and the builder to execute documents of title. The reply of the builder, denying any obligation to execute documents of title - was filed on 25-1-2008. The owner, who had agreed to file a reply, to facilitate execution of the title documents, prevaricated, as the order sheet in OS 1286/1990 reveals. Finally, the owner filed a reply, on 22-7-2008, supported by affidavit (of the plaintiff/owner). The reply, to the extent it is relevant, reads as follows:

"1. The plaintiff states that he has no objection to executing the conveyance deeds of flats A-1, A-2, C-1, C-2, D-1 and part of D-2, as prayed for, provided the Applicants/Defendants 5 to 13 comply with the Order and Judgment dated 31 st October, 1996 of the Hon‟ble Division Bench and complete construction of the flats falling to the share of the Plaintiff according to stipulated first class construction at their own cost.

2. It is stated that the Defendants 5 to 13 have failed to comply with the said Order of the Hon‟ble Division Bench inasmuch as flats falling to the share of the Plaintiff, i.e Flats B- 1, E-2 and D (part) have not been properly constructed, let alone constructed according to stipulated first class construction."

29. Thus, the purchasers had notice that the owner and builder did not intend to comply their part of the bargain, by the time the suit was

CS (OS) 1286/90 & 971/08 Page 33 filed, in 2008. The suit, therefore is within the period of limitation. At this stage, it would also be relevant to deal with a submission made on behalf of the owner, i.e that the purchaser withdrew IA 11342/2006 and cannot seek relief in Suit No. 971/2008. In this connection, it would be useful to notice the objection to the relief sought in that application, made by the Builder, who opposed it, in the reply filed by him:

"The applicants/defendants 5 to 13 cannot seek relief of alleged execution of conveyance deeds of flats in their favour in the present suit by way of this interim application under reply, which is not the main relief as prayed for in the present suit."

30. The opposition by the builder and owner, to the relief sought in the application was clear. Therefore, the purchasers had no option but to seek substantive relief, through an independent suit. As regards the submission that the suit could not be filed without permission of the court, the plea is unfounded, because the purchasers are defendants in the suit (where the application was filed). If the agreement of 23-11- 2006 clothed them with new and independent rights, which they seek to enforce through a separate suit, the withdrawal of an interlocutory application in another suit - not even filed by them, cannot constitute a bar, by any stretch of imagination, to maintainability of an independent suit.

31. The second argument - mostly on behalf of the builder- against a judgment based on admissions is that the agreements of 4-4-1989 was rendered null and void, because the nine residential units which they sought to deal with, were altered into five units, as a result of the

CS (OS) 1286/90 & 971/08 Page 34 order dated 31-10-1996 and the agreement of 1995 between the owner and the purchaser. If one sees the entire sequence of events, what is clear is that the failure of the builder to undertake construction, in compliance with the agreement of 4-4-1989, led to the order dated 31- 10-1996, of the Division Bench. The said order records in several places that the purchasers are innocent parties, made to suffer on account of the builder's defaults. Here again, the builder is not saying that the amounts agreed to be paid, and mentioned, were not paid. The builder has neither sought for enforcement of any of the conditions spelling obligations of the owner, nor has assailed the subsequent understanding embodied in the Order of the Division Bench, dated 31- 10-1996. It cannot be said that the builder was in the dark, because he is a party to the suit, in which those events took place, and was heard at all times. The said order resulted in unfolding of events that completely changed the entire circumstances, so far as construction, the number of units, etc were concerned. However, since the builder himself was responsible primarily, and never questioned these events, which became irreversible (once the construction was undertaken and completed, pursuant to court orders) he cannot, at least be heard to say that the agreement of 4-4-1989 became null and void. That agreement survived, as far as the inter se rights of the owner, builder and the purchaser, were concerned, the subject matter of the contract, as well as the content thereof. Any other interpretation would result in rank injustice to the purchasers, and unconscionable windfall to the builder. The purchasers have, in a tabular statement, in Para 8 of their suit (OS 971/08) revealed the amounts paid to the builder, and also that the

CS (OS) 1286/90 & 971/08 Page 35 balance retained, working out to less than five percent of the total consideration in each case, is payable at the time of execution of conveyance deed. It is admitted in reply to the averment that:

"The amounts paid by the plaintiffs to the builder and balance to be paid as per the said agreements are not disputed and in reply thereof terms of the said agreements may be read, referred to and relied upon.."

For these reasons, it is held that the builder's argument that the agreements dated 4-4-1989 were rendered null and void, are insubstantial. The said contention is rejected.

32. The other objections to the grant of a decree on admission, were made on behalf of the owner. The first submission was that the owner was always ready and willing to perform the agreement dated 23-11- 2006 and convey title, but the purchasers were not, and that finally, by notice dated 12th October, 2007, the said agreement was put to an end. The relevant portion of the said notice - which was produced by the owner- reads as follows:

"4. It is further brought to your Client‟s notice, that the Application No. 11342/2006 filed by your clients would no longer survive consideration as the same was listed along with the Review Application filed by Defendants No. 1, 2 & 3 which Review Application was dismissed on 31-5-2007. At the stage of hearing upon the said Review Application, your clients did no pursue or make submissions in the Application No. 11342/2006 and as such are deemed to have abandoned the reliefs prayed for therein.

5. Be that as it may, my Client in any case was and continues to be ready and willing to execute the Conveyance

CS (OS) 1286/90 & 971/08 Page 36 Deed in favour of the purchasers of the flat in question and the payments made to him cannot be made dependent upon the builder executing the Conveyance Deed, which is obviously and with malafide intention not being done, as is apparent to my client, to deprive him of the moneys due to him.

Now, therefore, your clients are put to notice through you, that in the event that the payments in terms of Clause 2 and 5 of the Agreement dated 23-11-2006 are not paid unto my Client within a period of 15 days of recipt of the present Notice, my client shall treat as cancelled the aforesaid Agreement dated 23-11- 2006..."

33. The owner's argument, on the face of it, seems valid and well founded. However, it has to be seen in the totality of circumstances. The purchasers argued that their obligations in the said agreement - to make agreed payments, were out of good will, and not a legal obligation. It was emphasized that the condition which the owner had to comply was to file a reply to IA 11342/2006, in order to facilitate conveyance of the property. That was never done. Finally, when it was done, on 22-7-2008, the owner sought to resist conveyance. The purchaser also submitted that even though the so called cancellation took place in 2007, the owner did not treat it as such.

34. The object of the 23-11-2006 agreement obviously was to facilitate the process of conveyance and effectuation of title, on the part of the owner. The latter was originally a part of each agreement dated 4-4-1989, with every purchaser. The obligations of the purchasers, towards the owner were minimal. However, in view of the changed circumstances, whereby the entire construction was completed on account of monies paid by the purchasers, through the

CS (OS) 1286/90 & 971/08 Page 37 receiver appointed by the Division Bench's order of 31-10-1996, the parties thought it appropriate to have a supplementary arrangement. The recitals to the agreement, as well as the operative part, make it clear that the purchasers agreed to pay the amounts as a gesture of goodwill:

"2. The Purchaser Companies, as a gesture of goodwill and to buy the peace and also to amicable settle the matter with the Owner once for all.."

Such being the case, the resistance of the owner (in not filing reply) led the purchaser to file a separate suit. As far as the contention that the said agreement stood cancelled is concerned, that was not the position taken in the reply filed by the owner, to IA 11342/06, where it was said (by the owner) that:

"1. The plaintiff states that he has no objection to executing the conveyance deeds of flats A-1, A-2, C-1, C-2, D-1 and part of D-2, as prayed for, provided the Applicants/Defendants 5 to 13 comply with the Order and Judgment dated 31 st October, 1996 of the Hon‟ble Division Bench and complete construction of the flats falling to the share of the Plaintiff according to stipulated first class construction at their own cost."

There is no whisper of the agreement having been cancelled; the owner has not sought any relief in that regard, independently. The reply was filed after the notice issued on behalf of the owner, on 12.10.2007. Therefore, the said submission is rejected.

35. The other submission of the owner is that the construction handed over, pursuant to order of court, in 2006, was not in accordance with the agreed quality. The owner has listed out several

CS (OS) 1286/90 & 971/08 Page 38 alleged deficiencies. As far as this aspect goes, the court is of opinion that the owner accepted possession without reservation. Moreover, the construction was overseen by a receiver appointed by the court, pursuant to an arrangement and order to which the owner was a consenting party. The amounts paid towards the construction, were not borne by the purchaser. Had the receiver not been appointed, the owner may well have been left in the lurch, and unable to secure possession.

36. This court, at this stage recollects that in the joint application (under Order 23, CPC) by the owner and the builder (in the suit, where the owner was plaintiff and the purchasers were Defendant Nos. 5 to

13), i.e IA 11266/95, the following stipulations had been agreed upon:

"...2. That the Receiver will at the cost of the Defendants 5 to 13 make arrangements for completing the construction of the Units allocated to Defendants 5 to 13, namely A-1, A-2, C-1, C-2 and D (part) totaling up to an area 54% of the built-up area and subject to a maximum of 5 dwelling units. The receiver will also at the same time and at the cost of the Defendants 5 to 13 take steps for completing the following flats falling to the share of the Plaintiff, namely B-1, E-2 and D (part). As soon as, the construction of these flats is completed and completion certificate obtained, possession of the respective flats shall be simultaneously given to the Plaintiff and Defendants 5 to 13.

3. So far as, the flats E-1 and B-2 falling to the share of the Plaintiff, the Receiver shall not proceed to complete the construction there of at this stage. However, at the option of the Pliantiff and on his so intimating the receiver, he shall also complete the construction of either flat E-1 or B-2 and obtain the completion certificate in respect of the same. For this purpose, the Defendants 5 to 13 shall furnish a Bank Guarantee to the

CS (OS) 1286/90 & 971/08 Page 39 Plaintiff in a sum of Rs.10,00,000/- within a period of 15 days from the date of the making of the Order of the High Court appointing a Receiver in terms of this Settlement. The Bank Guarantee will be discharged after either flat E-1 or B-2 has been completed, completion certificate obtained and the possession handedover to the Plaintiff.

4. The Plaintiff‟s flats shall be completed according to the stipulation relating to first class construction in terms of clause 5 of the agreement dated 23.4.1987 between Plaintiff and Defendant 1.

5. In consideration of the Defendants 5 to 13 agreeing to get the Plaintiffs flats as mentioned aforesaid completed at their own expenses, the Plaintiff hereby assigns his rights to obtain compensation from the Defendants 1-3 in favour of the Defendants 5 to 13. This is without prejudice to the individual rights of the Defendants 5 to 13 of recovering damages against the builder on account of breach of their own contracts dated 4th April, 1989."

It is thus clear that the owner had consciously agreed to an arrangement, whereby the costs for completion of construction were to be borne by the purchaser, and the right to sue for deficiency in that regard, was expressly assigned to the purchasers, as against the builder. Therefore, in view of these terms and the express terms of the subsequent agreement of 23-11-2006 (between the purchaser and the owner) the former (ie the purchaser) cannot be held liable or responsible for any alleged defect in construction of the owner's portion. The remedy, if any may lie elsewhere, against someone else. This objection, therefore, does not call for a triable issue.

37. The builder had urged, on the basis of the averments in its written statement, that the title to 17% FAR would be with it and that

CS (OS) 1286/90 & 971/08 Page 40 consequently the decree sought for by the purchasers cannot be granted. The specific plea was that the agreement only sold 54% of the constructed portion, and each residential unit was sold or agreed to be sold, through description. Thus, if any further right to construct upon the said building or structure arose, on account of availability of a higher FAR, it would enure in favour of the builder. This argument, in the Court's opinion, is without any substance, factually, or legally. The relevant stipulation in the agreements of 4-4-1989 stated that what was agreed to be given or eventually conveyed to the purchasers, was:

"constructed area with the undivided proportionate share in all rights, title and interest of the owner and the building in the land with rights easements and right of further construction fully described in Annexure-„C‟ hereto forming the part of builder‟s allocation....."

It would be useful, at this stage, to notice relevant provisions of the Delhi Aparment Ownership Act, 1986. They are extracted below:

"Section 3(e)

"Apartment owner" means the person or persons owning an apartment and in undivided interest in the common areas and facilities appurtenant to such apartment in the percentage specified in the deeds of apartments;

      .......                             .......                .........

      Section 3(j)

"Common Areas and facilities", in relation to a multi-storeyed building means;

CS (OS) 1286/90 & 971/08 Page 41

(i) the land on which such building is located and all easements, rights and appurtenances belonging to the land and the building;

(ii) the foundations, columns, girders, beams, main walls, roofs, halls, corridors, lobbies, stairs, stairways, fire escapes and entrances and exits of the building;

(iii) The basement, cellars, yards, gardens, parking areas, shopping centres, schools and storage spaces;

(iv) The premises for the lodging of janitors or persons employed for the management of the property;

(v) installations of central services, such as, power, light, gas, hot and cold water, heating, refrigeration, air conditioning, incinerating and sewerage;

(vi) The elevators, tanks, pumps, motors, fans, compressors, ducts and in generally all apparatus and installations existing for common use;

(vii) Such other community and commercial facilities as may be prescribed; and

(viii) all other parts of the property necessary or convenient to its existence, maintenance and safety, or normally in common use.

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4. (1) Every person to whom any apartment is allotted, sold or otherwise transferred by the promoter, on or after the commencement of this Act, shall, save as otherwise provided in Section 6, and subject to the other provisions of this Act, be entitled to the exclusive ownership and possession of the apartment so allotted, sold or otherwise transferred to him.

CS (OS) 1286/90 & 971/08 Page 42 (2). Every person to whom any apartment was allotted, sold or otherwise transferred by the promoter before the commencement of this Act shall, save as otherwise provided under Section 6 and subject to the other provisions of this Act, be entitled, on and from such commencement, to be exclusive ownership and possession of the apartment so allotted, sold or otherwise transferred to him.

(3) Every person who becomes entitled to the exclusive ownership and possession of an apartment under Sub-section (1) or Sub- section (2) shall be entitled to such percentage of undivided interest in the common areas and facilities as may be specified in the Deed of Apartment and such percentage shall be computed by taking, as a basis, the value of the apartment in relation to the value of the property.

(4). (a) The percentage of the undivided interest of each apartment owner in the common areas and facilities shall have a permanent character, and shall not be altered without the written consent of all the apartment owners.

(b) The percentage of the undivided interest in the common areas and facilities shall not be separated from the apartment to which it appertains and shall be deemed to be conveyed or encumbered with the apartment, even though such interest is not expressly mentioned in the conveyance or other instrument.

5. The common areas and facilities shall remain undivided and no apartment owner or any other person shall bring any action for partition or division of any part thereof, and any convenient to the contrary shall be void.

6. Each apartment owner may use the common areas and facilities in accordance with the purposes for which they are intended without hindering or encroaching upon the lawful rights of the other apartment owners.

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CS (OS) 1286/90 & 971/08                                        Page 43

Section 24 (1) The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any contract, undertaking or other instrument and all apartment owners, tenants of owners, employees of owners and tenants, or any other person who may, in any manner, use the property or any part thereof to which this Act applies, shall be subject to the provisions of this Act and the bye-laws and the rule made there- under:

Provided that nothing contained in this sub-section shall affect the right, title or interest acquired by any allottee or other person in common areas and facilities from any promoter on or before the 28th day of February, 1986.

(2) All agreement, divisions and determinations lawfully made by the Association of Apartment Owners in accordance with the provisions of this Act and the bye-laws shall be deemed to be binding on all apartment owners."

By virtue of the definition of common facilities and amenities, "the foundations, columns, girders, beams, main walls, roofs, halls, corridors, lobbies, stairs, stairways, fire escapes and entrances and exits of the building" vest in the apartment owner, due to operation of Sections 4 and 6. The Act overrides all other enactments and contracts to the contrary.

38. In view of the express provision in the agreements dated 4-4- 1989 entitling the purchasers, to the proportionate undivided portion of the land, and appurtenant rights, and, more importantly, provisions of the Delhi Apartment Ownership Act, 1986, the benefit of ownership of such undivided and proportionate rights, including the rights to future FAR, as well as roof rights, vest with the purchasers,

CS (OS) 1286/90 & 971/08 Page 44 and the owner, to the extent of their share of rights in the building, in proportion to the percentage of their shares. The builder has no rights in that regard. In any event, the builder never sought and obtained any conveyance or title to the lands, or the construction.

39. The Court further holds as insubstantial the argument by the builder that the 1987 agreement was in the nature of a joint venture partnership, whereby it acquired right and title to the land. This court does not find any warrant for this submission, either in the said 1987 agreement, or in any other document. That document enabled the builder to enter and construct upon the suit plot, in furtherance of the understanding with the owner, and later, to effectuate the agreements with the purchaser. There is nothing on the record showing that at any time, title was acquired to the suit property, as is being urged.

40. It would now be useful to revisit the law pertaining to judgment on admissions, embodied in Order 12, Rule 6, CPC. In Rajiv Sharma v Rajiv Gupta AIR 2004 Del 248, a Division Bench of this Court spoke about the underlying objective of the said provisions and also that the power can be used by the Court, of its own accord:

"15. The purport of Rule 6 Order 12 of the Code of Civil Procedure is to enable the party to obtain speedy justice to the extent of the relevant admission which, according to the admission of the other party, he is entitled for. Admission on which judgment can be claimed must be clear and unequivocal one and such admission must be either of the entire claim made in the suit or even for a party of the claim for which decree can be passed separately. The requirement, prior to Code of the Civil Procedure Amendment Act,1977, for filing an application

CS (OS) 1286/90 & 971/08 Page 45 under Order 12 Rule 6 CPC stands waived and under the amended provisions of Order 12 Rule 6 of the Code of Civil Procedure, the Court on its motion and without an application by a party can proceed to pass a decree on an admission."

At the same time, the law declared by the Supreme Court in Uttam Singh Duggal (supra) and Jeevan Diesels is that the admission should be unequivocal and not conditional. As to what kind of defences can inhibit a court from invoking its discretionary power under Order 12, Rule 6 is also not a matter of debate. It is only those which require a trial, and defences and pleas which are plainly and manifestly unfeasible, or "sham" can be ignored (Ref. Rajiv Saluja v. Bhartia Industries Limited and Anr. 2002(64) DRJ 569). In Pooja Aggarwal vs Sakata Inx (India) Ltd (judgement dated 2 September, 2008 in CM 1669/2007) the Court held that where

"the denial by the defendant is a sham and false and the Court can always disregard such sham and false denials.."

Similarly, in Rama Ghai vs. UP State Handloom Corporation, 2001 (IV) AD (Delhi) 471 it was held that to invoke the provisions of Order 12 Rule 6, CPC, the Court has to scrutinize the pleadings in their totality and ignore the evasive and unspecific denials.

41. It would also be necessary to recollect the intention of Parliament which amended Order 12 Rule 6, in 1976. This was described in Uttam Singh (supra) in the following terms:

"12. As to the object of Order 12, Rule 6, we need not say anything more than what the legislature itself has said when the

CS (OS) 1286/90 & 971/08 Page 46 said provision came to be amended. In the Objects and Reasons set out while amending the said Rule, it is stated that

"where a claim is admitted, the Court has jurisdiction to enter a judgment for the plaintiff and to pass a decree on admitted claim. The object of the Rule is to enable the party to obtain a speedy judgment at least to the extent of the relief to which according to the admission of the defendant, the plaintiff is entitled"

We should not unduly narrow down the meaning of this Rule as the object is to enable a party to obtain a speedy judgment. Where the other party has made a plain admission entitling the former to succeed, it should apply and also wherever there is a clear admission of facts in the face of which it is impossible for the party making such admission to succeed."

Similarly, in Charanjit Lal Mehra Vs. Kamal Saroj Mahajan 2005 (11) SCC 279, it was held that:

"In fact, Order 12, Rule 6, CPC, is enacted for the purpose of and in order to expedite the trials if there is any admission on behalf of the defendants or an admission can be inferred from the facts and circumstances of the case without any dispute; then, in such a case in order to expedite and dispose of the matter such admission can be acted upon.."

42. The above discussion would reveal that taken in totality, the pleadings in CS (OS) 971/2008, entitle the plaintiff to the decree based on admissions of the defendant(s) owner and builders. Further, this court is of opinion that the events subsequent to CS (OS) 1286/1990 in the form of the agreement embodied in the Order 23, CPC application jointly filed by the purchasers and the owner, the order of the court dated 31-10-1996, the issuance of completion/occupancy certificate, the handing over of possession of

CS (OS) 1286/90 & 971/08 Page 47 the respective portions of the constructed property to the owner and the purchaser, the assignment of rights to the purchaser, by the owner (to claim any action or damages against the builder), the fact that the construction cost was concededly borne by the purchaser, and the entering into of the agreement dated 23-11-2006, have rendered the reliefs claimed in CS (OS) 1286/1990 incapable of being granted. These are the cumulative and combined effect of pleadings, documents, court orders and events which have not been denied by the parties. Consequently, interests of justice require that the court should, by judgment, decree its dismissal under Order 12, Rule 6, C.P.C.

43. In the result, it is directed that a decree in CS (OS) 971/2008 in terms of the following be drawn:

(1) The plaintiff purchasers in the suit are entitled to have the execution of the sale deed, conveying title to the residential units handed over pursuant to the order of court, dated 20-7-2006, in CS (OS) 1286/1990. The draft sale deeds shall be prepared and made available to the owner and buyer, for this purpose. They shall execute the final sale deeds in favour of the purchaser/ plaintiffs in CS (OS) 971/2008;

(2) The plaintiff/purchasers aforesaid shall pay the balance amounts (in terms of what is described in Para 8 of the plaint in Suit No. 971/2008) first to the builder, within eight weeks from today. In case the amount is not received, the same shall be deposited in court.

CS (OS) 1286/90 & 971/08 Page 48 (3) Simultaneously with compliance with direction (2) above, the purchasers shall pay the sum of Rs. 70 lakhs to the owner, within the said period of 8 weeks, being the consideration agreed mutually, in terms of the agreement dated 23-11-2008. In case the owner does not receive that amount or any part of it, the same, or the balance not received, shall be deposited in court.

(4) After complying with the directions in (2) and (3) above, the parties shall comply with direction (1). For this purpose, the purchaser shall call upon the owner and builder to return the sale deeds, within a time frame, and also appoint a date for their execution and due registration. The entire cost of registration, such as purchase of stamp duty, etc, shall be to the account of the purchaser.

(5) If either the builder or owner, or both do not co-operate in compliance with any direction, it is open to the plaintiff purchaser to move this court through appropriate direction, for execution of the sale deeds, through a commissioner to be appointed in this regard.

44. CS (OS) 971/2008 is decreed in the above terms, for the reasons discussed previously. CS (OS) 1286/1990 is, for the same reasons, dismissed. All pending applications in these suits stand disposed of.

                                                S. RAVINDRA BHAT
                                                      (JUDGE)

JULY 02, 2012




CS (OS) 1286/90 & 971/08                                         Page 49