B.S. Infrastructure Pvt. Ltd. vs Sh. Sanjeev Kumar Malhotra
2012 Latest Caselaw 2204 Del

*            HIGH COURT OF DELHI: NEW DELHI

%                                          Judgment decided on: 30.03.2012

+            O.A. No. 120/2011 in I.A. No. 14024/2010
             in CS (OS) No. 1229/1999


B.S. Infrastructure Pvt. Ltd                           ..... Plaintiff
                       Through: Mr. H.L. Tiku, Sr. Adv. with
                                Ms. Yashmeet, Adv.

                           Versus

Sh. Sanjeev Kumar Malhotra                                     ..... Defendant
                   Through               Mr. Harish Katyal, Adv.

Coram:
HON'BLE MR. JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

1. The present appeal has been filed by the plaintiff under Chapter II Rule 4 of the Delhi High Court (Original Side) Rules, 1967, against the order dated 11.08.2011 passed in I.A. No.14024/2010 by the Joint Registrar. The plaintiff's application seeking direction against the defendant to file a fresh affidavit as evidence in conformity with the pleadings or alternatively prayer was made that the paragraphs-2 to 10, 14 and 17 to 20 of the affidavit be not read in evidence has been rejected by the impugned order.

2. The brief facts of the case are that the plaintiff filed a suit for specific performance for enforcement of Agreement to Sell dated 24.12.1997, between plaintiff and defendant with regard to the property

bearing Khasra No. 266 situated in Village Tughalaqabad, near EDPF Colony, New Delhi admeasuring about 2175 sq yds (hereinafter referred to as suit property) for an agreed consideration of Rs.48 lac.

3. The plaintiff states that in the written statement, the defendant has admitted the execution of Agreement to Sell and also the receipt of Rs.7 lac as part consideration. However, in his evidence produced by way of an affidavit dated 23.09.2010, the defendant has made statements which are contrary to the written statement as it is alleged in the affidavit that the plaintiff company had never entered into any Agreement to Sell for purchase of the suit property. The defendant did not receive any sale consideration from the plaintiff, as defendant had entered into an agreement with Mr. Gopal Nigam, Company Secretary to the plaintiff company. After filing the affidavit, the plaintiff filed an application being I.A. No. 14024 of 2010 objecting the evidence being led by the defendant and the same was dismissed by the impugned order, thus, the chamber appeal is filed has been filed by the plaintiff.

4. The following grounds are taken in the grounds of appeal :

a. The impugned order is erroneous, bad on facts and as well as in law.

b. The Joint Registrar failed to appreciate plaintiff's allegations and the defendant's defence to each of those allegations. That new facts cannot be brought in at the time of evidence especially when the same is not stated in the written statement of the defendant.

c. The Joint Registrar failed to appreciate the well settled law, that parties can lead evidence limited to their pleadings and not beyond it or contrary to it.

d. The Joint Registrar failed to appreciate that defendant have admitted the execution of the agreement to Sell between the plaintiff and the defendant. But, nowhere in the written statement, defendant have pleaded that he has entered into an agreement with Mr. Gopal Nigam and/or received part payment from Mr. Nigam.

e. The Joint Registrar failed to appreciate that there was a direction from this Court, vide order dated 19.04.2011, wherein it was specifically mentioned that Joint Registrar should consider the present application without invoking the provisions of Order XVIII of Code of Civil Procedure, 1908.

f. The Joint Registrar wrongly concluded that if the defendant is directed to file the affidavit in line with his pleadings, then it would be pre judging the issues at the time of recoding evidence. g. That the Joint Registrar failed to appreciate that the present case is not a case of lack of pleading buta, of affidavit by way of evidence contrary to the pleadings as defendant is leading evidence contrary to its pleadings.

h. Since there was evidence contrary to pleadings, there was miscarriage of justice.

5. The defendant filed his reply wherein, he has stated that the appeal filed by the plaintiff is without any reason as in the said order

the Joint Registrar has not decided any legal issue in finality. The main contentions of the defendant are as under :

(a) The defendant states that the affidavit in evidence is not beyond the pleadings of the Written Statement but just a mere extension of the objections already taken in the written statement.

(b) The order of the Joint Registrar is based on many decided cases and the same were taken into consideration while delivering the order.

(c) It is stated by the defendant that an agreement was executed with Mr. Gopal Nigam and it was he who approached defendant along with some local property dealer showing his interest in the said property.

(d) The plaintiff was given enough opportunity and despite that he never showed his interest/intention to purchase the same. He did not even pay any price towards the suit property nor did he make any effort to obtain the NOC from the concerned department despite the order of the Court.

(e) Defendant states that the plaintiff pleaded before this Court that the advance money lying with defendant be refunded to him. The defendant immediately deposited the sum of Rs.7,00,000/- with this Court.

(f) The defendant states that the alleged agreement dated 24.12.1997 was executed by Mr. Gopal Nigam, a Company Secretary who became Director of the company. During cross examination, Mr. Bharat Bhusan, Director, stated that, "Mr.

Gopal Nigam is still associated with the Plaintiff Company". However, Mr. Nigam was not produced as a witness on behalf of the company, nor the transaction in question was proved. PW-1, Mr. Bharat Bhusan, Director of the Company, did not rely upon any document showing the authorization that Mr. Nigam was to act for and on behalf of the company.

6. It is alleged by the defendant that during cross examination, Mr. Bharat Bhusan the plaintiff's witness admitted that the company right from its inception did not purchase any property and this suit property will be company's first property. It was also admitted that the Company did not have means of income, finance, funds, any transactions and no other business apart from this suit property. Despite knowing the fact that Sh. Nigam was the signatory of the said deed, the plaintiff willingly did not examine Sh. Nigam as witness in the present suit. As the plaintiff has failed to prove its case in evidence, now the plaintiff is raising frivolous objection to the evidence produced by the defendant.

7. In the written statement the defendant had taken the following pleas :

(a) The plaintiff has no cause of action to file the present suit.

(b) There is no consideration of the plaintiff with the defendant, hence there is legal subsisting agreement between the parties.

(c) That the plaintiff was never ready and willing to perform his part under the agreement to sell, hence there is no cause of action.

(d) That under the Agreement to Sell, the defendant was only obliged to obtain the Income Tax Clearance Certificate and the sale was to be executed immediately upon obtaining the Income Tax Clearance Certificate. In the instant case, inspite of the defendant obtaining the requisite Income Tax Clearance Certificate, the plaintiff did not pay the balance sale consideration and thus, did not get the sale deed registered and hence, it can be asserted that the plaintiff was never ready and willing to perform his part under the Agreement to Sell.

(e) That the defendant was always ready and willing to execute the sale deed in terms of the Agreement to Sell dated 24.12.1997 and in fact, the plaintiff was not ready to pay the balance sale consideration to execute the sale deed.

8. The following are the details of paras to be deleted from the affidavit of the defendant :

"2. I say that the plaintiff M/s B.S. Infrastructure Pvt. Ltd. has no cause of action to file the present suit against me seeking specific performance of the agreement dated 24.12.1997, as M/s B.S. Infrastructure had never into any such Agreement to sell or Purchase with me for purchase of my property of Chanderlok Cinema admeasuring 2175 Sq.

Yards out of Khasra No.266, situated in the Village Tughlakabad, near EDPF Colony, New Delhi.

3. I say that I had never entered into any agreement as alleged for sale of the suit property with M/s B.S. Infrastructure Pvt. Ltd. instead the original Agreement to sell was entered into between Sh. Gopal Nigam son of Sh. R.C. Nigam, Resi. of 2061/39, Naiwala Gurdwara Road, Karol Bagh, New Delhi-110005 and the deponent for sale of suit property.

4. I say that I had never received any sale consideration as alleged in the plaint from the Plaintiff Company rather a sum of Rs.7.00 lacs only was in fact received from Sh. Gopal Nigam as earnest money for which a separate receipt was also executed by me in favour of Sh. Gopal Nigam.

5. I say that as per the terms of the Agreement to sell, I had obtained the necessary certificate from Income Tax department seeking clearance for sale of the said property in favour of Sh. Gopal Nigam in the month of January, 1998 and was handed over to Sh. Gopal Nigam then.

6. I say that Sh. Gopal Nigam who has miserably failed to complete the sale transactions for the reason best known to him and in the year requested me to switch the transaction with the Plaintiff for which initially I was not agreed and the Agreement to sell dt. 24.12.1997, was amended by Sh. Gopal Nigam and the name of the Plaintiff Company was inserted therein.

7. I say that thereafter I expressed to receive the entire sale transaction in one go irrespective of the buyer but the plaintiff and/or Sh. Gopal Nigam both for the reason best known to them avoided/delayed completion of sale transaction for one reason or the other.

8. That in the year 1999, the Deponent had again obtained the ITCC from the Income Tax Department in favour of the Plaintiff and had handed over to the officers of the Plaintiff then. That as per the terms of the Agreement to sell after obtaining the ITCC (the necessary permission), the Plaintiff was under obligation to complete the sale transaction and to pay the balance amount of sale consideration to the Defendant. But the Plaintiff never inclined to pay the balance sale consideration and/or was never ready and willing to get execute the sale deed as they had no money ready with him/them and probably for this reason only the Agreement to sell was changed by them unilaterally in the name of the plaintiff.

9. I say that to the information of the Defendant the Plaintiff company since its inception had not done any business so far nor was having any financial capabilities to pay the entire sale consideration to the defendants and had nothing to do with the sale purchase and/or development of the properties as mentioned/stated before this Court in their plaint. It is more specifically submitted that the Plaintiff Company since its inception had not done a single transaction in relation to their main object of inception, i.e. building and land development which strengthen the claim of the Defendant that the Plaintiff company was solely incorporated in order to grab the property of the Plaintiff by taking illegal advantage of the Agreement to sell dt. 24.12.1997 executed between the Defendant and Sh. Gopal Nigam.

10. I say that for this reason only the Plaintiff Company despite of repeated questions/reminders/opportunities provided in the Court itself miserably failed to place on record any Document/Balance Sheet/Trading Account of the company for any financial year since its inception.

14. I say that since the Plaintiff was never actually interested in purchasing the suit property only thereby

sought directions from this Hon'ble Court against the defendant for deposit/return of the earnest money so paid by Sh. Gopal Nigam for purchase of Suit property. And the Defendant being the bonafide person and adhering to the direction of this Hon'ble Court vide order dt. 20.11.2000, had deposited the entire amount of earnest money with this Hon'ble Court on dt. 28.11.2000 vide pay order No.545815 of UCO Bank.

17. I say that till then the Defendant was interested in selling the suit property but as of now being the family need of the defendant had also grown up and the ascendant of the defendant had also become major and required the suit property for their bonafide need and requirement, therefore, not interested in selling the said property.

18. I say the Plaintiff themselves had sought an damages to the tune of Rs.4.50 lacs only from the Defendant if the property is found defective or not remittable or if the decree for specific performance cannot be granted, for which the defendant without prejudice, is ready and willing to pay if being directed by this Hon'ble Court after the plaintiff was found entitled for the same.

19. I say that the Plaintiff actually neither originally entered into any such Agreement dt. 24.12.1997 with the defendant and/or was capable for making payment of the entire sale consideration when this agreement was executed between the parties.

20. I say I was previously inclined to sell the suit property irrespective of the buyer but since the plaintiff was neither legally entitled nor otherwise interested to purchase the property and under the guise of the present suit try to extract some money from the Defendant. And as of now presently being the son of the defendant attained majority is interested and looking forward to the suit property for entirely for their bonafide requirement."

9. It is settled law that the parties can lead evidence limited to their pleadings and no party can travel beyond pleading otherwise, the sacrosancy of pleadings comes to an end and the purpose of filing the pleadings also stand defeated.

10. Para-5 of the impugned order reads as under:-

"5. The evidence is tendered by way of affidavit which is the examination-in-chief of the defendant no. 1, S.K. Malhotra. It is the contention of the defendant that the objected paragraphs are nothing but the elaboration of certain points which are already pleaded. After the amendment to CPC, Order 18 Rule 4 (4) it is found that whenever a commissioner recording the evidence, all the objections raised during the recording of the evidence be also recorded and the same are to be decided by the court at the stage of arguments. Order 18 Rule 4 deals with every situation whenever the recording of examination-in-chief is taken through affidavits."

11. It is the admitted position that in the written statement, the defendant had raised the defence that there is no consideration of the plaintiff-company with the defendant. In paras-3 to 7 of his affidavit, the defendant has stated that in fact, he has not entered into any agreement with the plaintiff-company instead it was entered with Gopal Nigam. The said plea was specifically not taken by the defendant in his written statement, though execution of the agreement was not denied by the defendant in the written statement. In the written statement, it is also specifically mentioned that the plaintiff was not ready and willing to pay the balance consideration to execute the sale deed. Mr. Tiku, learned Senior counsel appearing on behalf of plaintiff strongly relied

upon para 4 of the plaint and reply given by the defendant thereto which is reproduced hereunder :

"4 (Plaint). That in pursuance of the said agreement to sell the said land, the defendant received from the plaintiff Rs.7,00,000/- (Rupees Seven Lakhs only) by cheque No.108301 dated December 24, 1997 drawn on Vijaya Bank, Barakhamba Road, New Delhi favouring the defendant as part payment/earnest money leaving the balance consideration of Rs.41,00,000/- (Rupees forty one lakhs only) to be paid by the plaintiff to the defendant as in accordance with the said agreement to sell dated December 24, 1997.

4 (Written Statement). That para No.4 is also admitted."

12. No doubt, the plea of the defendant about validity of subsisting agreement between the parties is still alive to the defendant which has been raised in the written statement and has to be decided by the Court after trial. The objection of the defendant would have to be considered at the appropriate stage as whether Gopal Nigam was duly authorized by the plaintiff to enter into an agreement with the defendant. And as to whether the plaintiff was able to prove his case on this aspect or not, but as far as the statement made in paras-3 to 7 of the affidavit is concerned, the same has to be amended in consonance with the plea taken in the written statement, otherwise the purpose of pleadings would be defeated.

13. In para-14 of the affidavit of defendant it has been stated that the plaintiff was never actually interested in purchasing the suit property as the plaintiff has not deposited the balance consideration but only sought direction against the defendant for deposit of earnest

money and the defendant deposited the earnest money with this Court on 28.11.2000 by pay order. In para-8 of the written statement, a specific plea was taken by the defendant that the defendant was always ready and willing to execute the sale deed in terms of the agreement. In fact, the plaintiff was not ready to pay the balance consideration to execute the sale deed. In view of the said statement made in paras-6 and 8 of the written statement, it is clear that the statement made by the defendant in para-14 of the affidavit is as per defence taken in the written statement. Therefore, the contention of the plaintiff for deletion of para-14 of the affidavit cannot be accepted.

14. In paras-17 to 20 of the affidavit, it has been stated that since the plaintiff was not ready and willing to perform its part under the agreement and later on, the defendant was not interested in selling the property, therefore, the decree for specific performance cannot be granted. Otherwise, prejudice would be caused to the defendant. It is also stated in para-19 of the affidavit that the plaintiff was not capable of making the entire sale consideration as per the agreement. Therefore, the defendant later on was not interested to sell the property, although earlier he was inclined to sell the same.

15. In view of the statement made in paras- 8, 14 & 17 to 20 of the written statement, the defendant has made the statement in the affidavit as per the defence raised by him in the written statement and he is entitled to elaborate the same in view of the specific plea raised in the written statement. The plaintiff's contention with regard to these paras cannot be accepted in view of the finding given by the Joint Registrar in para 5 of the impugned order.

16. The appeal is, therefore, partly allowed.

17. The defendant is granted one more opportunity to produce the evidence by way of affidavit within six weeks by amending paras-3 to 7 of the affidavit in consonance with the pleas raised in the written statement.

CS (OS) No.1229/1999

List the matter before the Joint Registrar on 12.09.2012.

MANMOHAN SINGH, J.

MARCH 30, 2012 jk