Delhi High Court
Pushpa Builder Ltd. vs Vikram Hingorani & Ors on 31 January, 2014
Author: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision:31st January, 2014.
+ RFA 500/2012, CM No.20871/2012 (for condonation of 1577 days
delay in filing the appeal) and CM No.20867/2012 (for stay)
ING VYSYA BANK LTD. ..... Appellant
Through: Mr. Rajiv Bansal with Mr. Meenal
Kashyap, Mr. S.K. Garg & Mr.
Gaurav Kumar Singh, Advocates.
Versus
VIKRAM HINGORANI & ORS ..... Respondents
Through: Dr. Aman Hingorani with Ms. Priya
Hingorani, Advocates for R-1 to 6.
Mr. S.S. Tripathi, Adv. for R-8 & 9.
AND
+ RFA 93/2013 & CM No.4689/2013 (u/S 151 CPC)
ING VYSYA BANK LTD. ..... Appellant
Through: Mr. Rajiv Bansal with Mr. Meenal
Kashyap, Mr. S.K. Garg & Mr.
Gaurav Kumar Singh, Advocates.
Versus
VIKRAM HINGORANI AND ORS ..... Respondents
Through: Dr. Aman Hingorani with Ms. Priya
Hingorani, Advocates for R-1 to 6.
Mr. S.S. Tripathi, Adv. for R-8 & 9.
AND
+ RFA 105/2013 & CM No.3127/2013(for stay)
PUSHPA BUILDER LTD. ..... Appellant
Through: Mr. Chetan Sharma, Sr. Adv. with Ms.
Gurkamal Hora Arora, Adv.
Versus
RFAs No.500/2012, 93/2013 & 105/2013 Page 1 of 46
VIKRAM HINGORANI & ORS ..... Respondents
Through: Dr. Aman Hingorani with Ms. Priya
Hingorani, Advocates for R-1 to 6.
Mr. S.S. Tripathi, Adv. for R-8 & 9.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
RAJIV SAHAI ENDLAW, J.
1. All the three appeals arise from CS No.217/2011 (Old No.364/2004)
of the Court of the Additional District Judge (ADJ)-08, Central Delhi. While
RFA No.500/2012 impugns the judgment and preliminary and final decree
dated 24th April, 2008 of partition in the said suit, RFAs No.93/2013 &
105/2013 impugn the subsequent judgment and decree dated 15th January,
2013 on admissions, of possession of portions of property No.13, Patel Road,
West Patel Nagar, Delhi in respective occupation of appellants in RFAs
No.93/2013 & 105/2013.
2. RFA No.500/2012 is accompanied with an application for condonation
of 1577 days delay in preferring the same. Notice only of the said
application for condonation of delay was issued and to which replies have
been filed by the contesting respondents.
3. Notice of RFA No.93/2013 was also issued on 13th February, 2013 but
vide order of the said date, the application for interim relief for stay of
operation of the judgment and decree dated 15th January, 2013 on admissions
of recovery of possession, was dismissed. The appellant ING Vysya Bank
Ltd. (Bank) preferred SLP(C) No.9211/2013 to the Supreme Court which
was granted and converted into Civil Appeal No.4609/2013 and vide order
dated 22nd February, 2013, while issuing notice, the execution of the decree
for possession against the Bank was stayed. Subsequently, the counsels for
the decree holders (respondents no. 1 to 6 in these appeals) made a statement
that they will not press for eviction of the Bank till the disposal of the appeal.
Accepting the said statement and directing this Court to endeavour to hear
and dispose of the appeal as expeditiously as possible and as far as
practically within a period of six months, the said appeal was disposed of.
4. Notice of RFA No.105/2013 was also issued.
5. The counsel for the Bank, the senior counsel for Pushpa Builder Ltd.
(Builder) and Dr. Aman Hingorani, Advocate have been heard.
6. The respondents No.1 to 6 i.e. Dr. Vikram Hingorani, Ms. Anita
Hingorani, Ms. Lata Hingorani, Dr. Aman Hingorani, Ms. Shweta Hingorani
and Ms. Priya Hingorani (all hereinafter called as the plaintiffs) instituted the
suit from which these appeals arise, for the relief of delivery of legacy/share
in immovable property with consequential reliefs of partition, injunction and
rendition of accounts, pleading:
(i) that their paternal grandfather Mr. Hardasmal Banasing
Hingorani, in December, 1956, had purchased the property
No.13, Patel Road, West Patel Nagar, Delhi in the name of Mr.
R.B. Tahilramani being the husband of his daughter Ms. Sati
Tahilramani;
(ii) that Mr. R.B. Tahilramani vide registered Gift Deed dated 27th
July, 1959 gifted the said property to his wife Mrs. Sati
Tahilramani;
(iii) that the monies on the acquisition and construction of the said
property were however also contributed by Mr. Nirmal
Hingorani, son of Mr. Hardasmal Banasing Hingorani;
(iv) that disputes arose between Mrs. Sati Tahilramani, Mr.
Hardasmal Banasing Hingorani and Mr. Nirmal Hingorani as to
the ownership of the said property as well as another property at
Bombay and which were referred to arbitration and in which
arbitration proceedings, Mrs. Sati Tahilramani took a stand that
she was the owner of half share only in the property and the
other half share was owned by her father Mr. Hardasmal
Banasing Hingorani;
(v) Mr. Hardasmal Banasing Hingorani executed his Will dated 13th
September, 1974 whereunder he bequeathed his undivided half
share in the said property to his wife Ms. Rochi Hingorani and
after her death equally to (i) his another son Mr. Bahar
Hingorani; (ii) to his yet another son Mr. Mohan Hingorani; and
(iii) to Dr. Aman Hingorani, Dr. Shweta Hingorani and Ms.
Priya Hingorani being the children of his son Mr. Nirmal
Hingorani;
(vi) that in the arbitration proceedings aforesaid, an Award dated
30th September, 1974 was published holding/declaring Mr.
Hardasmal Banasing Hingorani and Mrs. Sati Tahilramani to be
the owners in equal share of the said property; Mr. Nirmal
Hingorani was held to be the sole owner of the Bombay
property;
(vii) that the said Award was vide order dated 25 th November, 1975
of this Court made the rule of the Court and a decree passed in
terms thereof;
(viii) that Mr. Hardasmal Banasing Hingorani died on 22nd February,
1981 and as per his Will aforesaid, his half undivided share in
the property devolved on his wife Mrs. Rochi Hingorani for her
lifetime;
(ix) that Mrs. Sati Tahilramani though owner of only one half share
in the property, entered into a Collaboration Agreement dated
20th September, 1988 with the builder, whereunder the builder
was to at its own expense construct a new building in place of
the construction then existing on the said property and was to in
turn take 50% of the sale proceeds of the new construction on
the said property; a Power of Attorney dated 29th August, 1988
was also executed in favour of the Managing Director of the
builder;
(x) that the builder in or about the year 1990 demolished the old
construction on the said property and commenced new
construction;
(xi) that however the Municipal Corporation served a Notice dated
28th July, 1992 alleging unauthorized construction in the
property and owing whereto Mrs. Sati Tahilramani vide Legal
Notice dated 17th October, 1992 terminated the Collaboration
Agreement with the builder and revoked the Power of Attorney
given to the Managing Director of the builder;
(xii) Mrs. Sati Tahilramani on 18th April, 1994 also filed suit
No.935/1994 in this Court to restrain the builder and its
Managing Director from raising further construction on the
property and for demolition of the unauthorized construction
raised; vide order dated 28th April, 1994 in the said suit, the
builder and its Managing Director were so restrained from
raising unauthorized construction in the property;
(xiii) that on 5th April, 1994, the builder also filed a suit No. 740/1994
under Section 20 of the Arbitration Act, 1940 in this Court
seeking reference to arbitration of disputes which had arisen
with Mrs. Sati Tahilramani with respect to the Collaboration
Agreement; vide order dated 6th April, 1994 in the said suit,
status quo qua title and possession with respect to the property
was directed to be maintained;
(xiv) Mrs. Rochi Hingorani died on 13th June, 1996; her son Mr.
Bahar Hingorani had predeceased her; accordingly, upon
coming to an end of the life estate of Mrs. Rochi Hingorani of
half share of the said property, the said half share devolved
upon, (i) Dr. Vikram Hingorani, Mrs. Anita Bhawnani and Mrs.
Lata Sabharwal being the heirs of Mr. Bahar Hingorani; and, (ii)
Dr. Aman Hingorani @ Mahesh, Dr. Shweta Hingorani @ Gita
and Ms. Priya Hingorani being the children of Mr. Nirmal
Hingorani and upon Mr. Mohan Hingorani (respondent no. 7 in
the appeals);
(xv) that the suit under Section 20 of the Arbitration Act, 1940 filed
by the builder was dismissed in default on 24th September,
1998; an application for restoration was filed but the same was
also dismissed on 2nd February, 1999;
(xvi) Mrs. Sati Tahilramani died on 21st January, 2002 whereupon her
half share in the property devolved on her two sons Mr. Gul @
George R. Tahilramani and Mr. Gautam R. Tahilramani
(respondent no. 8 and 9 in the appeals);
(xvii) the plaintiffs called upon Mr. Mohan Hingorani, Mr. Gul @
George R. Tahilramani and Mr. Gautam R. Tahilramani to
partition the property but to no avail;
(xviii) that the builder had granted license to the bank of a substantial
portion of the said property for opening its branch and a
showroom against the security deposit of Rs.2.48 crores and
annual payment of about Rs.14 lacs as licence fee; and,
(xix) that neither the builder nor the bank which had come into use
and occupation of the substantial portion of the property
through the builder had any right to the property after the
dismissal of the suit under Section 20 of the Arbitration Act,
1940 earlier filed by the builder.
Accordingly, the suit for the reliefs of (i) partition of the property; (ii)
delivery of possession of the property; (iii) injunction; and, (iv) rendition of
accounts, was filed impleading the aforesaid Mr. Mohan Hingorani, Mr. Gul
@ George R. Tahilramani and Mr. Gautam R. Tahilramani, builder and its
Managing Director and the bank as defendants thereto.
7. Though Mr. Gul @ George R. Tahilramani and Mr. Gautam R.
Tahilramani being the sons of Mrs. Sati Tahilramani initially contested the
suit but need is not felt to refer to their defence since subsequently an
application under Order 23 Rule 3 of the CPC was filed by the plaintiffs on
the one hand and the said Mr. Gul @ George R. Tahilramani and Mr.
Gautam R. Tahilramani on the other hand.
8. The builder and its Managing Director contested the suit, by filing a
written statement, on the grounds:-
(a) that the plaintiffs had no right to the property which belonged
exclusively to Mrs. Sati Tahilramani;
(b) that the plaintiffs had not asserted any rights in the property and
had allowed Mrs. Sati Tahilramani to deal with the same as
absolute owner thereof;
(c) denying the Will of Mr. Hardasmal Banasing Hingorani under
which the plaintiffs claimed;
(d) that Mrs. Sati Tahilramani had no right to unilaterally cancel the
Collaboration Agreement and revoke the Power of Attorney;
(e) that the builder had the right to recover 50% of the sale
proceeds of the property;
(f) that the 50% of the sale proceeds of the property had already
been paid to Mrs. Sati Tahilramani in her lifetime in terms of
the Collaboration Agreement; and,
(g) that the builder had created third party interest in favour of
various persons with respect to different portions of the property
in the years 1991-1992 as per the Collaboration Agreement.
9. The bank also contested the suit, by filing a written statement, on the
grounds:-
A. that it was the owner in possession of the property by virtue of
Agreement dated 20th March, 1995 and Memorandum of
Understanding (MoU) dated 20th March, 1995 entered into with
the builder and in terms of the Collaboration Agreement
between the builder and Mrs. Sati Tahilramani;
B. that it had paid the entire consideration to the builder who had
handed over possession to it on 22nd November, 1995; and,
C. that it had also paid the misuse/regularization/commercial
charges with respect to the portion of the property in its
occupation and had also been paying the Property Tax with
respect to the said portion of the property.
Else, the defence of the bank was the same as that of the builder.
10. The plaintiffs filed replications to the written statements of the builder
and the bank inter alia pleading that the possession of the builder of the
property was on behalf of the owners of the property and the builder, after
the termination of the Agreement, had no lien over the property; that the
builder inducted the Bank into the property in violation of the injunction
orders aforesaid.
11. The defendant no.1 (respondent no. 7 in these appeals) Mr. Mohan
Hingorani did not contest the suit and was proceeded against ex parte. He
has not appeared before this court also.
12. The learned Addl. District Judge vide order dated 14th July, 2005
directed the builder to deposit in the Court the license fee collected by it
from the bank. FAO No.325-326/2005 was preferred to this Court against the
said order. The contention in the said appeal, of the builder and the bank also
was, of their rights in the property under the Collaboration Agreement. Per
contra, the contention of the plaintiffs herein was that the Collaboration
Agreement was not fully acted upon and in any case had been terminated.
This Court, vide order dated 18th May, 2011, while dismissing the appeal,
held:-
"that the Collaboration Agreement was not fully
performed. Once a Collaboration Agreement is not
performed, the appellant no.1/builder cannot claim
complete rights under the Collaboration Agreement
without having performed the complete obligation. A
contract is a package deal. Contract means reciprocal
promises which have to be performed before benefit is
claimed of the corresponding reciprocal promise.
Considering the fact that the builder had filed a suit to
claim rights on the basis of Collaboration Agreement and
which suit was not pursued by the builder itself and
which dismissal in default became final vide order dated
2.2.1999 i.e. more than 11 years back, the position which
would emerge is that the rents from the property which
are being received need to be protected by depositing the
same in the Court".
Of course vide subsequent order dated 29th July, 2011 it was clarified
that the said observations were relevant to the issue of disposal of interim
application only.
13. An application dated 28th March, 2008 was filed by the plaintiffs and
the defendants no.2&3 (respondents no. 8 and 9 in these appeals) Mr. Gul @
George R. Tahilramani and Mr. Gautam R. Tahilramani under Order 23 Rule
3 of the CPC admitting that the plaintiffs no.1 to 3 (i.e. heirs of Bahar
Hingorani) on the one hand, plaintiffs no.4 to 6 (i.e. children of Nirmal
Hingorani) on the second hand and the defendant no.1 Mohan Hingorani on
the third hand, each had 1/6th share in the property and the defendants
no.2&3 had the remaining half share in the property and dividing the
property between themselves by metes and bounds.
14. On the aforesaid application under Order 23 Rule 3 of the CPC, a
preliminary decree for partition declaring the shares as aforesaid of the
parties and also a final decree for partition by metes and bounds on the terms
recorded in the application was passed in the Suit on 24 th April, 2008 and
against which decree RFA No.500/2012 along with an application for
condonation of 1577 days delay in filing thereof has been filed.
15. The builder as well as the bank filed applications under proviso to
Rule 3 of Order 23 of the CPC, objecting to the compromise aforesaid
between the plaintiffs on the one hand and the defendants no.2&3 on the
other hand resulting in the preliminary and final decree for partition,
asserting their rights in the property under the Collaboration Agreement
aforesaid executed by Mrs. Sati Tahilramani. The said applications were
dismissed vide a detailed order dated 23rd September, 2011 of the learned
Addl. District Judge, finding/observing/holding (i) that the contention of the
builder and the bank that Mrs. Sati Tahilramani was the sole absolute owner
of the property was contrary to the judgment dated 25th November, 1975 of
this Court in terms of the arbitral award dated 30th September, 1974
declaring Mr. Hardasmal Banasing Hingorani and Mrs. Sati Tahilramani to
be equal owners of the property; (ii) that though the builder and the bank had
challenged the Will of Mr. Hardasmal Banasing Hingorani but being not his
heirs/family members, were not entitled to do so; (iii) that no rights in the
property were transferred in favour of the builder under the Collaboration
Agreement or the Power of Attorney in favour of the Managing Director of
the builder; reliance in this regard was placed on Suraj
Lamp and Industries (P) Ltd. Vs. State of Haryana (2009) 7 SCC 363; (iv)
that the builder and the bank were not required to be joined as a party to the
compromise between the plaintiffs on the one hand and the defendants no. 2
and 3 on the other hand; the builder and the bank were even otherwise not
the members of the family to be joined to the family settlement leading to the
compromise; (v) that the builder and the bank even otherwise being not
parties to the compromise were not entitled to challenge the same; reliance in
this regard was placed on H.C. Shastri Vs. Dolphin Canpack P Ltd. 67
(1997) DLT. 652 and on Bai Chanchal . Vs. Syed Jalaluddin AIR1971
SC1081; and, (vi) that it is open to a few of the parties to a litigation to enter
into a mutual settlement and it is not necessary for them to join the other
parties to the suit in the compromise and the suit can continue qua the
remaining defendants; reliance in this regard was placed on Pushpa Devi
Bhagat Vs. Rajinder Singh AIR 2006 SC 2628.
16. The builder preferred CM (M) No.29/2012 to this Court impugning
the order dated 23rd September, 2011 supra to the Addl. District Judge
dismissing the application of the builder objecting to the compromise
between the plaintiffs on the one hand and the defendants no.2 & 3 on the
other hand and the preliminary and the final decree for partition in
consequence thereto. The said CM (M) petition was dismissed vide detailed
Judgment dated 13th January, 2012, observing (i) that the builder and its
Managing Director under the Collaboration Agreement were acting only as
an agent of Mrs. Sati Tahilramani and which agency was terminated by Mrs.
Sati Tahilramani vide Legal Notice dated 17th October, 1992 and vide Public
Notice dated 24th March, 1994 and whereafter the builder had no right to
remain in the property or to handover possession of any part of the property
to the bank; (ii) that the delivery of possession of part of the property by the
builder to the bank was "admittedly" in contravention of the status quo order
which had been passed on 6th April, 1994 in suit No.740/1994 supra; (iii) that
though suit No.740/1994 was filed by the builder challenging the termination
of the Collaboration Agreement and revocation of the Power of Attorney but
the said suit itself was dismissed in default on 24 th September, 1998; (iv)
reliance was placed on Southern Roadways Ltd., Madurai Vs.
S.M. Krishnan AIR 1990 SC 673 to hold that an agent has no right to remain
in possession of the property after termination of his agency; (v) reliance was
also placed on Master Builder Vs. United States of America 43 (1991) DLT
719 (DB) holding that where the agreement of the builder has been
terminated, the builder/contractor could not be allowed to remain in
possession of the property and could not hold on to the property; (vi) that the
objections to the compromise were in any case misconceived as the
appropriate remedy against allowing or refusing a compromise is an appeal;
reliance in this regard was placed on The National Small Industries
Corporation Ltd. Vs. M/s Industrial Textile Products (P) Ltd. 2001 (60)
DRJ 144; (vii) "admittedly" in terms of the Collaboration Agreement the
builder did not have any right, title or interest in the property; under the said
agreement the builder was to at best get 50% of the sale proceeds and that
too only after the sale of the property; (viii) "admittedly" the construction
was yet to be completed and thus the question of sale did not arise; (ix)
rightly or wrongly the Collaboration Agreement had been terminated and the
suit filed by the builder challenging the said termination stood dismissed; (x)
the right if any of the builder was to prefer an appeal against the compromise
decree; and, (xi) that the compromise decree was of sharing of rights in the
property between the co-owners; the builder on the basis of the Collaboration
Agreement had no such rights; thus nothing precluded the plaintiffs and the
defendants no.2&3 to enter into the compromise.
17. The bank also preferred CM (M) No.389/2012 to this Court against
the dismissal of its application objecting to the compromise aforesaid but on
30th March, 2012 withdrew the said petition to seek appropriate legal remedy
by filing an appeal. Vide order dated 30th March, 2012, the said petition was
dismissed as withdrawn. Thereafter RFA 500/2012 has been filed.
18. The builder preferred RFA No.185/2012 in this Court along with an
application for condonation of 1327 days delay in filing the same,
challenging the compromise, preliminary and final decree for partition but on
23rd April, 2012 withdrew the same stating that it was intending to challenge
the order dated 13th January, 2012 supra of dismissal of CM(M) No.29/2012.
19. The plaintiffs thereafter moved an application under Order 12 Rule 6
of the CPC before the Addl. District Judge, for a decree for possession
against the builder and the bank, on admissions, pleading:-
(a) that their predecessor-in-interest Mr. Hardasmal Banasing
Hingorani was the owner of one half undivided share of the
property as per the judgment and decree dated 25th November,
1975 of this Court in suit No.640-A/1974 making the arbitral
award dated 30th September, 1974 a Rule of the Court;
(b) that the Will dated 13th September, 1974 of Mr. Hardasmal
Banasing Hingorani had been admitted by all his natural heirs
and in terms thereof a preliminary decree for partition of the
property had already been passed.
(c) that though the builder and bank were disputing the Will of Mr.
Hardasmal Banasing Hingorani but had no locus to do so;
(d) that the builder was inducted into the suit premises only in the
year 1988 and the bank was inducted into a portion of the suit
property by the builder only in the year 1995 and there was no
occasion for either of them to in any case know of the Will
dated 13th September, 1974 of Mr. Hardasmal Banasing
Hingorani;
(e) that the Collaboration Agreement under which Mrs. Sati
Tahilramani had inducted the builder was unregistered and did
not confer any right in the property on the builder;
(f) that as per the admitted terms of the Collaboration Agreement,
the builder was not to have any title in the suit property but
merely a claim to 50% of the sale proceeds of the
flats/units/floors constructed on the property within a period of
20 months of the date of sanction of building plans;
(g) that the builder also in his written statement had admitted the
said position;
(h) that the builder had not completed the construction which was
still incomplete; in fact the Collaboration Agreement was not
fully acted upon and had been revoked/terminated.
(i) that the builder by filing suit No.740/1992 in this Court had
admitted termination of the Collaboration Agreement vide
Legal Notice dated 17th October, 1992 followed by Public
Notice dated 24th March, 1994;
(j) that the challenge by the builder to the termination of the
Collaboration Agreement was however dismissed on 24th
September, 1998/2nd February, 1999;
(k) that the bank was inducted in the suit property by the builder
vide License Deed dated 20th March, 1995 in violation of the
order dated 6th April, 1994 of status quo in suit No.740/1994;
(l) that the builder being only an agent of Mrs. Sati Tahilramani for
the specific purpose of construction, could not hold on to the
property after the agency agreement had come to an end;
accordingly the builder had no right of possession, management
and control over any portion of the property or to even induct
the bank into possession of the property; and,
(m) that the portion of the property in occupation of the bank, under
the final decree for partition had fallen to the share of the
plaintiffs and the bank had no right to continue in occupation
thereof.
20. The builder filed a reply to the aforesaid application under Order 12
Rule 6 of the CPC pleading:-
(i) that Mrs. Sati Tahilramani was the absolute owner of the
property;
(ii) Mrs. Sati Tahilramani as absolute owner had entered into the
Collaboration Agreement dated 20th September, 1988 with the
builder;
(iii) though Mr. Hardasmal Banasing Hingorani was vide judgment
and decree 25th November, 1975 of this Court in suit No.640-
A/1974 making the arbitral award dated 30th September, 1974 a
Rule of the Court had become the owner of one half share in the
property with the other half share being owned by Mrs. Sati
Tahilramani but the claim of the plaintiffs under the Will of Mr.
Hardasmal Banasing Hingorani was unsustainable as:-
A. though Mrs. Sati Tahilramani was the
executrix of the said Will but continued to
act as the absolute owner of the property;
and,
B. no probate of the said Will had been
obtained;
C. that the present suit had been filed in the year
2004 i.e. almost after 30 years of the decree
dated 25th November, 1975 making the
arbitral award a Rule of the Court;
(iv) that Mrs. Sati Tahilramani had in pursuance to the Collaboration
Agreement given possession of the property to the builder;
(v) that under the Collaboration Agreement the builder was
empowered to mortgage, sell, alienate, transfer or part with
possession of the property;
(vi) that the builder had paid large sums of money to Mrs. Sati
Tahilramani towards her 50% share of the sale proceeds in the
property;
(vii) that the plaintiffs were nowhere in picture when the
Collaboration Agreement was entered into, or when the earlier
construction was demolished and new construction raised on the
property;
(viii) that the builder was in possession of the property in its
independent right under the Collaboration Agreement;
(ix) that it was expressly provided in the Collaboration Agreement
that the builder was not the agent of Mrs. Sati Tahilramani;
(x) that the provisions of Order 12 Rule 6 were not attracted;
(xi) that the plaintiffs had not paid the appropriate Court Fees; and,
(xii) that the suit filed by Mrs. Sati Tahilramani against the builder
was also dismissed in default on 4th May, 2007 and as such the
validity of cancellation of the Collaboration Agreement had not
been adjudicated.
21. The bank also contested the application under Order 12 Rule 6 of the
CPC on the same grounds as the builder and additionally pleading:-
I. that the bank had vide Agreement dated 20th March, 1995 r/w
MoU dated 20th March, 1995 with the builder acquired three
flats in the property and had paid the entire amount of
consideration therefor to the builder; and,
II. that the bank was a bona fide purchaser of the said partition of
the property and legal owner thereof.
22. The learned Addl. District Judge has vide impugned judgment and
decree dated 15th January, 2013 allowed the application of the plaintiffs
under Order 12 Rule 6 of the CPC and passed a decree for possession
against the builder and the bank, finding/observing/holding:-
A. that it was not in dispute that this Court vide decree dated 25 th
November, 1975 in the suit No.640-A/1974 in terms of made
the arbitral award, declared Mr. Hardasmal Banasing Hingorani
and Mrs. Sati Tahilramani as owners in equal share of the
property;
B. as per the aforesaid decree which was not challenged at any
time by Mrs. Sati Tahilramani, Mr. Hardasmal Banasing
Hingorani was the owner of the 50% of the property;
C. the legal heirs of Mr. Hardasmal Banasing Hingorani were not
disputing his Will dated 13th September, 1974 whereunder the
plaintiffs and the defendant no.1 had succeeded to the 50%
share of Mr. Hardasmal Banasing Hingorani in the property;
D. that under the Collaboration Agreement relied upon by the
builder and the bank, the builder only had a right of 50% of the
sale proceeds of the property;
E. that as per the judgment dated 13th January, 2012 supra in
CM(M) No.29/2012 preferred by the builder and which had
attained finality, the builder had no right, title or interest in the
property;
F. it was the admitted position that the Collaboration Agreement
had been terminated by Mrs. Sati Tahilramani vide Notice dated
17th October, 1992 followed by Public Notice dated 24th March,
1994;
G. it was again the admitted position that though the builder had
challenged the said termination by filing a suit but the said suit
was dismissed in default vide order dated 24th September, 1998;
H. upon dismissal of the suit aforesaid the challenge to the
termination of Collaboration Agreement had come to an end
and had attained finality;
I. that the builder thereafter had no right to remain in possession
of the property;
J. that the bank had no privity of contract with the plaintiffs and
claimed rights only through the builder;
K. that though the bank claimed to be in possession as owner of the
property through the builder but the builder refuted the said
right of the bank and according to the builder the bank was in
occupation of the property as a licensee and not as the owner;
L. that the documents executed between the builder and the bank
also showed the transaction to be only of license and not of sale;
M. that the bank cannot get a better title than the builder;
N. that when the builder itself was not having any right, title or
interest in the property it could not have transferred any such
right to the bank;
O. that the contention of the bank of being a bona fide purchaser
was thus without any merit;
P. that the property already stood partitioned by metes and bounds
between the plaintiffs and the defendants no.1to3;
Q. that though the said partition had been challenged by the bank
and the builder but without any success;
R. that as per the said final decree for partition, the plaintiffs are
the owners of the portion in occupation of the bank; and,
S. that there was thus nothing requiring adjudication and there is
no impediment to granting a decree for possession in favour of
the plaintiffs.
23. The counsel for the bank has argued:-
(a) that there is no prayer in the plaint for relief of possession;
(b) that the bank was originally not even impleaded as a defendant
to the suit and though was subsequently added as a defendant
but no amendment to the plaint incorporating any pleas against
the bank was sought with the result that no averments/relief
exist in the plaint against the bank (however the counsel admits
that no such objection has been taken in the written statement);
(c) that the relief claimed in the plaint for delivery of legacy can
only be with respect to movable and not with respect to
immovable property; reliance is placed on the definition of
legacy in the Oxford English Reference Dictionary; P.
Ramanatha Aiyar‟s The Law Lexicon, Black‟s Law Dictionary
and West's Legal Thesaurus/Dictionary;
(d) thus no decree for recovery of movable property in possession
of the bank could have been passed;
(e) that the Gift Deed of the property by Mr. R.B.Tahilramani in
favour of Mrs. Sati Tahilramani was not set aside by the
Arbitrator in his award (however on enquiry it is again admitted
that no such plea exists in the pleadings);
(f) that there is no judgment declaring Mr. Hardasmal Banasing
Hingorani as the owner of 50% share in the property;
(g) that the plaintiffs are in collusion with the defendants no.2&3;
(h) that the said collusion is evident from the fact that though the
predecessor of the defendants no.2&3 namely Mrs. Sati
Tahilramani had entered into a Collaboration Agreement and
through whom the bank is claiming but in the division effected
by the plaintiffs and the defendants no.2&3 of the property
between themselves, the portion in occupation of the bank has
been allocated to the plaintiffs and not to the defendants no.2&3
who as heirs of Mrs. Sati Tahilramani who had entered into the
Collaboration Agreement could not have recovered possession
from the bank.
(i) that the decree is against the equities of the case;
(j) that the bank has been wronged; and,
(k) alternatively it is argued that liberty be granted to the bank to
proceed against the heirs of Mrs. Sati Tahilramani.
24. The senior counsel for the builder has argued, (i) that the Arbitration
Award dated 30th September, 1974 is not registered; reliance is placed on
paras 5,7,15 & 20 Lachhman Dass Vs. Ram Lal (1989) 3 SCC 99 and on
Satish Kumar Vs. Surinder Kumar AIR 1970 SC 833; (ii) that there were no
admissions on the basis of which a decree under Order 12 Rule 6 of the CPC
could have been passed; (iii) attention is invited to the Collaboration
Agreement to contend that the same amounts to „liquified sale‟ and having
been acted upon by Mrs. Sati Tahilramani taking 50% of the total sale
proceeds, the builder cannot be deprived of the rights thereunder; (iv) that
there has been no adjudication of the rights claimed by the builder; attention
is invited to para 3 of the written statement on merits of the builder
containing the plea that the builder has a right to retain 50% of the share in
the said project as the sale proceeds of the remaining 50% have already been
paid to Mrs. Sati Tahilramani during her lifetime; (v) attention is invited to
the reply filed by the builder to the application under Order 12 Rule 6 of the
CPC where in para 16 it is pleaded that though the defendants no.2&3 had
initially contested the claim of the plaintiffs but subsequently took a
summersault and admitted claim of the plaintiffs in collusion with the
plaintiffs; (vi) that the vested rights of the builder cannot be disturbed; (vii)
that the Trial Court proceeded on the premise that the order dated 24 th April,
2008 of preliminary and final decree of partition had attained finality when
the same is still subject matter of challenge in RFA No.500/2012; (viii) that
CM (M) petitions aforesaid were filed challenging the order dated 23 rd
September, 2011 and not the preliminary and final decree of partition; (ix)
that in any case the judgment dated 13th January, 2012 of this Court of
dismissal of CM(M) No.29/2012 is also on the ground of the same being not
maintainable and thus any observations on merits therein would also be
obiter; and, (x) that the collusion is also apparent from Dr. Aman Hingorani
having earlier appeared for Mrs. Sati Tahilramani.
25. Dr. Aman Hingorani has argued:-
A. that the builder having withdrawn RFA No.185/2012 preferred
against the preliminary and final decree for partition is not
entitled to argue thereagainst;
B. that though the aforesaid RFA No.185/2012 was withdrawn
stating that the builder was taking its remedies before the
Supreme Court against the judgment dated 13th January, 2012 of
this Court in CM(M) No.29/2012 but the builder has not
approached the Supreme Court till now;
C. that the RFA No.500/2012 filed by the bank which claims
through the builder is also thus not maintainable;
D. that the documents between the builder and the bank show the
bank to be only a licensee and the bank thus does not have any
independent right;
E. that the bank in fact is acting like a shark and is a trespasser in
the property;
F. the builder as well as the bank are bound by their admissions as
contained in the judgment dated 13th January, 2012 in CM(M)
No.29/2012 preferred by the Builder;
G. that RFA No.500/2012 in any case is palpably barred by time
and the delay in filing thereof is not liable to be condoned;
reliance is placed on (i) Ajit Singh Thakur Singh Vs. State of
Gujarat (1981) 1 SCC 495; (ii) Rabindra Nath Samuel
Dawson Vs. Sivakami AIR 1972 SC 730; and, (iii) Pundlik
Jalam Patil Vs. Executive Engineer, Jalgaon Medium Project
(2008) 17 SCC 448;
H. Reliance is placed on the definition of "deliver" in P.
Ramanatha Aiyar‟s The Law Lexicon 1987 Reprint Edition;
I. that the arbitral award culminating in a decree of the Court was
not required to be registered; reliance in this regard is placed on
(i) N. Khosla Vs. Rajlakshmi AIR 2006 SC 1249; (ii) Nathu
Lal Vaishi (Dr.) Vs. G.S. Kamal Advocate 166 (2010) DLT
751; (iii) Som Dev Vs. Rati Ram (2006) 10 SCC 788; and, (iv)
P.K. Nangia Vs. The Land & Development Officer, New Delhi
ILR (1987) I Delhi 405;
J. that the arguments raised are not based on any pleading, neither
in the written statement nor in the memorandum of appeal;
K. that the Will dated 13th September, 1974 of Mr. Hardasmal
Banasing Hingorani is of a date after Mrs. Sati Tahilramani had
in the arbitration proceedings then pending admitted Mr.
Hardasmal Banasing Hingorani to be the owner of 50% share in
the property;
L. that the builder or the bank have no locus to challenge the Will
of Mr. Hardasmal Banasing Hingorani;
M. that the Gift Deed by R.B.Tahilramani in favour of his wife
Mrs. Sati Tahilramani was superseded by the subsequent
arbitration award;
N. that the builder acquiesced in termination of the collaboration
agreement;
O. reliance is placed on (i) Chairman, U.P. Jal Nigam Vs.
Jaswant Singh AIR 2007 SC 924; (ii) Ferro Alloys Corp. Ltd.
Vs. Union of India AIR 1999 SC 1236; and, (iii) Fateh Kumar
Singh Vs. Kishan Chand Kachar AIR 1935 Calcutta 816 to
contend that the builder having not pursued the challenge to the
termination of the Collaboration Agreement, cannot be
permitted to in this suit/proceeding challenge the termination;
P. reliance is placed on D.C.M. Ltd. (M/s) Vs. M/s R.K. Towers
(India) Pvt. Ltd. 2008 IX AD (Delhi) 553 to contend that once
the builder has not claimed specific performance of the
Collaboration Agreement, he is deemed to have waived/given
up its claim for performance and cannot be allowed to resurrect
the same and a transaction cannot be left in a state of flux
indefinitely;
Q. reliance is placed on (i) Arun Mehra Vs. Durga Builders P.
Ltd. (2007) 138 Comp. Case 935 (Delhi); and, (ii) Dalchand
Vs. Seth Hazarimal AIR 1932 Nagpur 34 to contend that the
builder has acquiesced in termination; and,
R. reliance is placed on (i) Salim Makkar Vs. N.K. Pansari AIR
2001 Calcutta 162; and, (ii) Miyabhai Jamalbhai Vs. Karim
Bhai Mahomedbhai AIR 1967 Gujarat 16 to contend that the
bank as a licensee of the builder is bound by the judgments
binding on the builder.
26. The counsel for the bank in rejoinder has referred to Shivashankar
Prasad Sah Vs. Baikunth Nath Singh AIR 1969 SC 971 laying down that
dismissal in default of a proceeding does not amount to " heard and finally
decided by the court".
27. The senior counsel for the builder in rejoinder has invited attention to
the grounds in the memorandum of appeal urging that Mrs. Sati Tahilramani
had entered into the Collaboration Agreement being owner of half of the suit
property and as sole executrix of the estate of Mr. Hardasmal Banasing
Hingorani and being in possession of the same and thus the plaintiffs
claiming under the said estate of Mr. Hardasmal Banasing Hingorani are
bound by her actions.
28. I have considered the rival contentions and perused the records.
29. A perusal of the Collaboration Agreement dated 20th September, 1988
aforesaid shows:-
A. that the same was entered into by Mrs. Sati Tahilramani as sole
absolute owner of the property on the basis of the Gift Deed
dated 23rd May, 1958 executed in her favour by her husband Mr.
R.B.Tahilramani and not in her capacity as the executrix of the
Will of Mr. Hardasmal Banasing Hingorani;
B. that the transaction between Mrs. Sati Tahilramani and the
builder was not of transfer/sale/assignment by Mrs. Sati
Tahilramani to the builder of any right, title or interest in the
property but of Mrs. Sati Tahilramani allowing the builder to
carry out construction of new building on the property at its
own costs and expense after obtaining the various sanctions
therefor and of the builder in lieu of the expenses so incurred by
it, sharing 50% of the sale proceeds of the property and being
given a right to transfer and dispose of the said property; and,
C. the builder was also to apply for and obtain Completion
Certificate of the building.
30. I had during the hearing enquired from the counsels whether any
Occupancy Certificate was obtained with respect to the property.
31. Neither counsel could confirm. I had in fact further enquired from the
bank as to how the bank agreed to occupy the property and open its branch
therein without the property having Occupancy Certificate and whether not
the same is violative of the guidelines of the Reserve Bank of India. No
proper answer was forthcoming.
32. The documents dated 20th March, 1995 between the builder and the
bank with respect to the said property comprise of a MoU and agreements
with respect to individual flats. While the MoU inter alia provides that the
builder had availed of credit facilities from the bank and against which
amounts were outstanding from the builder to the bank and in satisfaction
whereof the builder had agreed to sell portions of the said property to the
bank, under the agreements, the builder granted license to the bank to use the
said portions of the property. Needless to state that both sets of documents
are unregistered.
33. I have bestowed my thoughtful consideration to the controversy.
Though on first blush, the decree for recovery of possession of immovable
property against the bank and the builder without any trial, especially in view
of the aforesaid history appears to be doubtful but on deeper consideration I
am unable to place my finger on any plea/defence of the builder or the bank
on which trial may be necessary. In fact I had repeatedly during the hearing
also enquired from the counsels for the builder and the bank that even if the
matter was to be put to trial, which is their plea/defence, on
proving/establishing of which they have a chance of defeating the claim of
the plaintiffs for recovery of possession of the property from them. No
answer was forthcoming.
34. It is the settled position in law that if on a meaningful and not a formal
reading of the pleadings, it were to be found that there is nothing to be put to
trial and that on the undisputed facts, the lis can be decided, the Court is not
to unnecessarily, for the sake of complying with procedure, put the parties
through the rigmarole of trial. A Division Bench of this Court in P.P.A.
Impex Pvt. Ltd Vs. Mangal Sain Mittal 166 (2010) DLT 84 extended the
principle laid down in T. Arivandandam Vs. T.V. Satyapal (1977) 4 SCC
467 in relation to a plaint, to the written statement also and held that a
defence which is implausible and on a meaningful, not formal reading, is
manifestly vexatious and meritless, clever drafting should not be allowed to
create an illusion and such defences should not be needlessly permitted to go
to trial. . The Supreme Court also recently in M/s Gian Chand Brothers Vs.
Rattan Lal MANU/SC/0015/2013 reiterated that it shall not be sufficient for
a defendant to deny generally the grounds alleged by the plaintiff, but he
must be specific with each allegation of fact. It was further held that where
there is evasive denial, the defendant cannot be permitted to lead evidence,
when nothing is stated in the pleadings.
35. The undisputed position which emerges is as under:-
(a) that though the property was acquired in the name of Mr.
R.B.Tahilramani and was gifted by him to his wife Mrs. Sati
Tahilramani and was standing in the name of Mrs. Sati
Tahilramani;
(b) such plea of benami till the coming into force on 19th May, 1988
of the Benami Transactions (Prohibition) Act, 1988, a plea that
the person in whose name the property may be recorded, was
not the real owner, was available;
(c) the dispute so raised by Mr. Hardasmal Banasing Hingorani
claiming to be the real owner of the said property was referred
to arbitration and in which Mrs. Sati Tahilramani conceded to
her father Mr. Hardasmal Banasing Hingorani being the owner
of 50% share in the property;
(d) the arbitration award declared Mrs. Sati Tahilramani and Mr.
Hardasmal Banasing Hingorani to be the owners in equal share
of the property;
(e) the said arbitration award was made a Rule of the Court by this
Court;
(f) that thus as on 25th November, 1975 i.e. when the arbitration
award was made a Rule of the Court, though the property was
standing in the sole name of Mrs. Sati Tahilramani but Mrs. Sati
Tahilramani was the owner of only 50% share in the property
and her father Mr. Hardasmal Banasing Hingorani was the
owner of the other 50% share in the property; the counsels for
the builder and the bank though have argued that the arbitration
award and the decree making it the same Rule of the Court were
required to be registered but have been unable to make good the
same and thus it cannot be said that for non-registration or for
any other reason Mr. Hardasmal Banasing Hingorani did not
become the owner of 50% share in the property;
(g) that thus, Mrs. Sati Tahilramani, on the date of the
Collaboration Agreement was not the complete owner of the
property was not entitled to enter into the Collaboration
Agreement with the builder with respect to the entire property
and the said Collaboration Agreement entered into by her did
not bind Mr. Hardasmal Banasing Hingorani or his heirs;
(h) the Will dated 13th September, 1974 of Mr. Hardasmal Banasing
Hingorani bequeathing his 50% share in the property to his wife
for her lifetime and thereafter to the plaintiffs and the defendant
no.1 could have been challenged only by the legal heirs or
persons having chance of succession to the estate of Mr.
Hardasmal Banasing Hingorani and not by any other person.
Thus the challenge by the builder and the bank to the said Will
by putting the plaintiffs to proof thereof is of no avail,
especially when none of the natural heirs of Mr. Hardasmal
Banasing Hingorani are challenging the Will and have rather
admitted the same;
(i) the plaintiffs along with the defendant no.1, under the said Will
have become entitled to 50% share in the property;
(j) that the Collaboration Agreement entered into by Mrs. Sati
Tahilramani with the builder though binding on the 50% share
of Mrs. Sati Tahilramani in the property, was terminated by
Mrs. Sati Tahilramani;
(k) the builder though initiated legal proceedings challenging the
said termination but did not pursue the same;
(l) even if the Collaboration Agreement is to be considered as an
agreement by Mrs. Sati Tahilramani to transfer right, title,
interest, share in her 50% share in the property in favour of the
builder, the same remained an „agreement to transfer‟ and did
not translate into „transfer‟;
(m) the builder did not do anything to complete the said transfer;
(n) even a purchaser of immovable property is not entitled to
continue possession in pursuance to an agreement to purchase
without applying for completion of purchase/transfer save under
Section 53A of Transfer of Property Act, 1882;
(o) there is no plea of the builder under Section 53A of the Transfer
of Property Act; The Division Benches of this Court in Kanhya
Lal Vs. Birdhi Chand Girdhari Lal MANU/DE/0333/1972 and
in State Bank of India Vs. Pushpa Arora 64 (1996) DLT 557
have held that a plea of part performance which necessarily
involves questions of fact cannot be permitted to be raised in
appeal, when it was not taken in the written statement in the
Trial Court though when a defendant in the written statement
states all the essential facts without stating the effect of those
facts, the benefit of Section 53A of the Transfer of Property Act
cannot be denied to him merely on the ground that there is no
specific mention of Section 53A of the Transfer of Property
Act. The Supreme Court also in Williams Vs. Lourdusamy
(2008) 5 SCC 647 held that it is one thing to say that a person is
in possession of the property and it is another thing to say that
he has a right to possess pursuant to or in furtherance of an
agreement for sale and that for application of Section 53A of the
Transfer of Property Act, requisite ingredients must be pleaded.
(p) the supreme court in Mohan Lal Vs. Mirza Abdul Gaffar
(1996) 1 SCC 639 held that once the agreement
purchaser/transferee looses his right of specific performance by
dismissal of the suit thereof, it would be inconsistent and
incompatible with his right to remain in possession under the
agreement; it was further held that the agreement to transfer
does not create title or interest in property and once the
agreement has met with dismissal of suit, the willingness of
purchaser/transferee to perform his part of the contract does not
arise.
(q) Similarly in D.S. Parvathamma Vs. A. Srinivasan (2003) 4
SCC 705 it was held that after dismissal on merits of a suit for
specific performance it cannot be said that the
purchaser/transferee had performed or was willing to perform
his part of the contract and is thus not entitled to protect his
possession under section 53-A of the Transfer of Property Act,
1882.
(r) Though the supreme court in Shrimant Shamrao Suryavanshi
Vs. Pralhad Bhairoba Suryavanshi (2002) 3 SCC 676 held that
merely because the claim for specific performance has become
barred by time would not disentitle the purchaser /transferee
from invoking section 53-A but the said judgment would not be
applicable since present is the case of a builder having initiated
challenge to transfer and the same having been dismissed in
default.
(s) it has been consistently held by this court in Jiwan Das Vs.
Narain Das AIR 1981 Del. 291, Sunil Kapoor Vs. Himmat
Singh 167 (2010) DLT 806 and M/S ASV Industry Vs.
Surinder Mohan MANU/DE/2060/2013 that an agreement
purchaser simpliciter has no rights in the property, not only till
the passing of a decree for specific performance of the
agreement but even till the execution of the conveyance in
pursuance thereto.
(t) the rights even if any agreed to be created by Mrs. Sati
Tahilramani in favour of the builder with respect to her share in
the property thus never fructified and the possession of the
builder and through the builder of the bank of the property is
unauthorized.
36. On all the aforesaid aspects there is no disputed fact which requires
adjudication by trial.
37. The CPC after completion of pleadings requires the Court to see
whether any material issue of law or fact arise from the pleadings of the
parties. If no material issue of law or fact to be adjudicated in trial arise,
order 15 of the CPC requires the Court to pass a decree forthwith.
38. Though the argument that there are no admissions is an attractive one
but as held by the Division Bench of this Court in Vijaya Myne Vs. Satya
Bhushan Kaura 142(2007) DLT 483(DB), SLP(C) No. 20273/2007
whereagainst was dismissed on 12th November, 2007, that the admissions
can also be constructive which can be inferred from vague and evasive
denial while answering specific pleas and that admissions can be inferred
from the facts and circumstances of the case. Moreover as aforesaid the
Court is to read the pleadings meaningfully and not formally. In the present
case as aforesaid on a meaningful reading of the pleadings the aforesaid
undisputed facts emerge and which are enough for a decree for possession to
be passed against the appellants. The counsels for the appellants are at a loss
to show any defence which have required to establish/prove in trial and if
successful wherein they would be entitled to defeat the claim for possession.
39. Though there is undue delay in preferring the RFA No.500/2012 and
there is no sufficient cause disclosed for condonation thereof and the conduct
of the appellants is replete with negligence, I may notice but even otherwise
no merit is found therein. Firstly the RFA No.185/2012 preferred by the
builder against the preliminary and final decree for partition on compromise
has been withdrawn and which binds the bank also. Secondly, once it is
found that the builder and the bank claiming through the builder, after having
failed to challenge the termination of the Collaboration Agreement were left
with no rights whatsoever in the property, they would have no locus to
challenge the preliminary and final decree for partition even if on consent
between the plaintiffs and the defendants no.2&3, mutually dividing the
property between themselves.
40. For all the aforesaid reasons, there is no merit in either of the appeals
which are dismissed with costs.
Decree sheet be drawn up.
RAJIV SAHAI ENDLAW, J.
JANUARY 31, 2014/bs/pp..
