Col. S.J. Chaudhri vs Vantage Construction Pvt. Ltd. ...
2014 Latest Caselaw 7166 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                    Reserved on: 22.12.2014
                                                  Pronounced on: 24.12.2014

+                      REV.PET.474/2012 IN CS(OS) 1286/1990

       COL. S. J. CHAUDHRI                          ..... Petitioner
                       Through: Sh. Ravi Gupta, Sr. Advocate with Sh.
                       Abhimanyu Mahajan and Sh. Milan Deep Singh,
                       Advocate.

                              Versus

       VANTAGE CONSTRUCTION PVT. LTD. AND ORS.
                                                 ..... Respondents

Through: Sh. Prashant Bhushan with Sh. Rohit Kumar Singh, Advocates.

Sh. N.S. Vashisht, Advocate.

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT

MR. JUSTICE S. RAVINDRA BHAT

%

1. This judgment will dispose of a review petition preferred by the plaintiff in CS(OS) 1286 of 1990; the review petitioner is hereafter referred to as "the plaintiff". The plaintiff seeks review on a limited issue in respect of the judgment dated 02.07.2012 passed in CS(OS) 1286 of 1990.

2. Briefly, the facts are that the plaintiff owns 20-A, Friends Colony, New Delhi and had entered into an Agreement on 23.04.1987 with the first defendant (referred to as "the Builder" - a term which also extends to the second, third and fourth defendants who are connected with the said first

REV. PET.474/2012 IN CS(OS) 1286/1990 Page 1 defendant). In terms of the Agreement, 54% of the total saleable space in the residential building (which had to be constructed) was allocated to the Builder by the plaintiff; they could sell it. The balance 46% of the saleable space in the said building was to be with the owner. The Builder started construction on the property and entered into different agreements with the Defendant Nos.5 to 13 (i.e. "the Purchasers") on 04.04.1989 in respect of the flats constructed in the 54% share falling to the Builder. Alleging breaches by the defendant Builder the plaintiff filed CS(OS) 1286/1990 seeking a declaration that the 1987 Agreement stood cancelled and that the other Agreement to Sell between the Builder and the Purchasers were void. A further direction that documents executed by the owner, in blank, on 28.09.1989 and used for executing contracts for selling Flat No.B-2 and E-1 (which related to 46% of the total saleable space falling to the plaintiff's share) to the Builders were not enforceable because of fraud and mis- representation, was also sought. Various other injunctive reliefs were also claimed.

3. When the suit was pending, a joint application was filed bearing (I.A. No.11266/1995 under Order XXIII Rules 1 & 3 of the Code of Civil Procedure, 1973) for appointment of receiver. That application was allowed by a learned Single Judge. A receiver was appointed to take charge of the property and oversee the completion of construction. An appeal was preferred against that order.

4. In the appeal (FAO(OS)73 of 1996) a Division Bench by its judgment dated 31.10.1996 modified the order passed by learned Single Judge and appointed a new receiver. It also recorded certain observations in paragraphs 18 to 27 of the judgment.

REV. PET.474/2012 IN CS(OS) 1286/1990 Page 2

5. In this background, the buyers of the flats filed a suit, CS(OS) 971/2008 seeking injunction against the plaintiff and the Builder and for conveyance of title and all the relevant documents. The suit also sought specific performance of the Agreement to Sell dated 04.04.1989 and further stated that the eighth plaintiff had acquired rights of one of the nine Purchasers, Indian Rockwood Co. Ltd., and further that Orient General Industries Ltd. got merged with the ninth plaintiff, one of the original Purchasers. This suit also alleged that in view of the subsequent developments, the original Agreements of 1989 were rendered void.

6. In this suit CS(OS) 971/2008, after written statements were filed by the owner and the Builder, an application I.A. No.5153/2009 was filed by the Purchasers/flat buyers (who were plaintiffs) claiming decree on admission under Order XII Rule 6 CPC. This application relied upon the proceedings which took place before the Division Bench in the appeal against the interlocutory order made in CS(OS) 1286/1990 and also that the owner and Purchasers had entered into Agreement for conveying title in respect of nine residential units, which were built up and converted into five residential units on 23.11.2006. The Purchasers sought to highlight admissions and contended that as a result the Court should decree CS(OS) 971/2008 and dismiss CS(OS)1286/1990 since it had been rendered redundant and infructuous. This application - seeking decree of admission was contested by the plaintiff owner and the builder.

7. After hearing the parties and considering all the submissions made, this Court of its judgment dated 02.07.2012 in para 42 summarised the facts and the application of law and held that with the entering into the Agreements dated 23.11.2006 between the purchasers and the owner and

REV. PET.474/2012 IN CS(OS) 1286/1990 Page 3 considering that the purchasers had borne the construction cost, the reliefs claimed in CS(OS) 1286/1990 were rendered incapable of being granted. In these circumstances, the Court in para 44 of the judgment dated 02.07.2012 directed a decree of dismissal of CS(OS) 1286/1990. By para 43 of this judgment, the Court issued directions to draw a decree in CS(OS) 971/2008 and made consequential orders.

8. The plaintiff, who is the owner of the property, in the review proceedings highlights that CS(OS) 971/2008, which was decreed by the judgment of 02.07.2012, does not deal with the disputes between the plaintiff - owner and the builders, i.e., defendants 1 to 4 in relation to the flats falling to the plaintiff's share, especially Flat Nos.B-2 and E-1 in respect of which specific relief was sought in the following terms:-

" (3) A decree of declaration that the documents being Agreements to Sell executed by the plaintiffs in blank on 28.08.1989 and which have been used for the purpose 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."

9. It is also submitted that the above relief is connected with the reliefs claimed in CS(OS) 3652/1992, which is a suit for specific performance in respect of the same flat, filed by the builder against the plaintiff/owner, which together with CS(OS) 2747/1993 - a suit for specific performance in respect of Flat No.E-1 has been tagged along with CS(OS) 1286/1990. It is in these circumstances, that the plaintiff seeks limited review to the extent of restoring CS(OS) 1286/1990 on the file of the Court as far as the relief No.3 above is concerned.

REV. PET.474/2012 IN CS(OS) 1286/1990 Page 4

10. The Builder/defendants No.1 to 3 resist the review petition and argue that the restoration of the suit to the extent of claim for specific performance for the two flats is not tenable since the judgment dated 02.07.2012 was delivered after duly considering all the pleadings and reliefs sought by the plaintiff/applicant against the defendants.

11. It is also pointed out that the reasoning adopted by the Court shows that overlapping and interlinking issues and the materials on the record were taken into consideration while arriving at the conclusion that the claims in C. S (OS) 1286/1990 are incapable of being granted. It is submitted that the suit CS(OS) 3650/1992 - for specific performance of Agreement in respect of Flat No.B-2 and CS(OS) 2747/1993 in respect of Flat No.E-1 constitute distinct and different causes of action and plaintiff/owner cannot seek advantage of the pendency of those proceedings. It is also denied that the said suits connected with CS(OS) 1286/1990 and lastly it is argued that the plaintiff/owner cannot approbate and reprobate, given the circumstances of the case.

12. It can be seen from the above discussion that the premise on which the plaintiff approached the Court was the subsistence of the Agreement of 23.04.1987 by which he was entitled to 46% of the saleable space in the building that had to be constructed. During the pendency of the suit CS(OS) 1286 of 1990, the Agreement of 04.04.1989, - which was entered into with Purchasers/defendant No.5 to 13, in respect of flats built by the defendant/Builder - out of 54% of the share falling to it, per subject to a series of orders.

REV. PET.474/2012 IN CS(OS) 1286/1990 Page 5

13. Importantly, on 31.10.1996, the Division Bench appointed a receiver and issued directions with regard to the construction of the flats. The Purchasers paid the construction cost and were aggrieved; they consequently filed CS(OS) 971/2008. This Court considered all these events, especially the fact that the admissions made by the Builder/defendants 1 to 3 and the plaintiff in the present suit, in the subsequent suit CS(OS) 971/2008 as well as the present suit CS(OS) 1286/1990 and concluded that the reliefs claimed against the Builder with regard to the Agreements of 04.04.1989 could no longer be granted. The nature of admissions by the plaintiff/owner was incompatible with the claims for declaration with regard to the Agreement arrived at with the Purchasers. As a result, the reliefs of declaration in respect of the Agreement of 04.04.1989 are no longer relevant.

14. A close reading of the judgment dated 02.07.2012 would reveal, however, that the dispute in respect of the plaintiff's share, i.e. 46% of the saleable space - which includes Flat No.B-2 and E-1 were not considered at all. The reason is obviously because the Purchaser who had filed CS(OS) 971/2008 had no claim to those flats. The plaintiffs submissions, therefore, that the decree of declaration in respect of the Agreement to Sell, and the legal effect of whether the alleged breached of the defendant/buyers, as far as Flat Nos. B-2 and E-1 are concerned, were never agitated, argued and considered on merits. It is also a matter of the record that two other civil suits i.e. CS(OS) 3652/1992 and CS(OS) 2747/1993 in respect of those two flats is pending on the file of this Court.

15. The defendant/Builder's arguments that all issues were considered in the judgment under review cannot be accepted. The judgment dated

REV. PET.474/2012 IN CS(OS) 1286/1990 Page 6 02.07.2012 was rendered in the context of admissions discerned in the pleadings in that suit as well as CS(OS) 1286/1990. Neither does the discussion in the judgment nor do the materials on the file in CS(OS) 1286/1990 reveal that the substantive rights of the parties, based upon the material on the record, as to the rival merits of the claim in prayer/relief clause (3) i.e. concerning Flat Nos.B-2 and E-1 ever been considered and dealt with. Nor was the consequential relief of permanent injunction in para 6 of the prayer/relief clause, discussed or considered. These claims clearly survived. The defendant/Builder's arguments that all these were the subject matter of the consideration, as they involved interlinked and overlapping issues, cannot be accepted; there is no discussion at all to that effect in the judgment.

16. In view of the above discussion, the judgment dated 02.07.2012 directing dismissal of CS(OS) 1286/1990 is hereby reviewed and recalled to the limited extent that the plaintiff's right to pursue prayer/reliefs (3) and (6) are hereby restored and suit is accordingly restored to that extent. The decree of dismissal, however, stands in respect of the other reliefs claimed in the suits which are the subject matter of the judgment dated 02.07.2012. The suit shall be now listed before the concerned Court according to Roster Bench and proceeded with in accordance with law along with CS(OS) 3652/1992 and CS(OS) 2747/1993.

                                                        S. RAVINDRA BHAT
                                                                  (JUDGE)
DECEMBER 24, 2014




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