Rohit Jain vs Promila Kumar & Others
2014 Latest Caselaw 4191 Del

$~21.
*     IN THE HIGH COURT OF DELHI AT NEW DELHI
+        CS(OS) 1439/2014
%                                               Judgment dated 05.09.2014


         ROHIT JAIN                                               ..... Plaintiff
                            Through :     Mr.Virender Ganda, Sr. Adv. with
                                          Mr.Rakesh Kumar, Mr.Vipul Ganda,
                                          Mr.S.K. Giri and Mr.Parmod Sachdeva,
                                          Advs.

                            versus

         PROMILA KUMAR & OTHERS                         ..... Defendants
                     Through : Mr.Gopal Jain, Sr. Adv. with Ms.Padma
                               Priya and Mr.Gaurav Wadera, Adv. for
                               defendant no.1 and for applicants in
                               I.A.16337/2014
                               Mr.Vipin Jain and Mr.Vipul Jain, Advs.
                               for defendant no.3.
                               Mr.Kunal Sharma, Adv. for
                               defendant/DDA.


         CORAM:
            HON'BLE MR. JUSTICE G.S.SISTANI

G.S.SISTANI, J (ORAL)

16337/2014 (O 1 R 10)

    1.

Present application has been filed by the applicants/Mr.R.M. Kapur, Mrs.Charu Garg, and Mrs.Rita Gupta seeking impleadment as defendants in the present suit. Applicant no.1, Mr.R.M. Kapur, seeks impleadment on the ground that he is the owner of the suit property and applicants no.2 and 3 seek impleadment on the ground that applicant no.1 has executed sale deeds in their favour for two separate floors of the same

property.

2. Mr.Jain, learned senior counsel for the applicants, submits that applicants are proper and necessary parties and their presence is necessary for the final adjudication of the matter.

3. Mr.Ganda, senior counsel for the plaintiff, submits that without admitting any of the averments made in these applications the present application may be allowed and the applicants may be impleaded as parties to the present suit.

4. Accordingly, the present application is allowed in view of above and subject to the submission made by learned senior counsel for the plaintiff. The applicants are impleaded as defendants no.5, 6 and 7 in the present suit. Let amended memo of parties be taken on record.

5. Application [I.A.16337/2014 (O 1 R 10)] stands disposed of. I.A.NOS.9486/2014 (O 39 R 1 & 2), 15065/2014 (O 39 R 4 = By newly added defendants no.5 -7)

6. Both these applications have been heard together and are being disposed of by a common order.

7. Plaintiff has filed the present suit for specific performance of an Agreement to Sell, which has been styled as Memorandum of Understanding dated 10.12.2010 (hereinafter referred to as MoU), with respect to the property bearing no.11, Masjid Moth Extension, now known as Uday Park, New Delhi, measuring 180 sq. meters (hereinafter referred to "as the suit property").

8. The MoU was executed by one, Mrs.Promila Kumar, in favour of the plaintiff, Mr.Rohit Jain. The sale consideration was fixed at Rs.1.75 crores. The MoU shows that the property was in possession of one, Mr.R.M. Kapoor (newly added defendant no.5), however, the property was sold on as is where is basis without possession. The MoU also states

that out of the sale consideration the plaintiff was also to clear the loan amount of Punjab National Bank as the property stands mortgaged by Mr.S.K.Malhotra on 30.3.1979 and all other dues.

9. Further as per the plaint, the plaintiff was shocked to learn that the property had been demolished by one Mr.Kapur, whose name figures in the MoU as the person, who was in the possession of the property. Since the plaintiff claims to have purchased the property on as is where is basis the present suit was filed seeking the following reliefs:

a. direct the Defendant No.3 to take the outstanding balance of loan amount standing in the name of the Defendant No.2 from the plaintiff for which the suit property had been mortgaged in its favour; and

b. direct the Defendant No.1 to execute the Sale Deed in favour of the Plaintiff with regard to the suit property i.e. 11, Masjid Moth Extension, Residential Scheme now known as Uday Park New Delhi, which is bounded by East: Plot No.10, West: Plot No.12, North: Road 13.5 Meters wide and South: Plot No.22 admeasuring 180 Sq.Meters; and

c. to direct the Defendants Nos.1 to 3 to hand over the original title documents of the suit property to the plaintiff; and

d. to pass a decree of possession of the suit property in favour of the Plaintiff; and

e. award the costs of the present suit to the Plaintiff.

10. This Court while issuing summons in the suit restrained the defendants from selling, alienating, transferring, parting with possession and carrying out any construction over the property till the next date. It may be noted

that Mr.R.M.Kapur was not impleaded as a party.

11. I.A.16337/2014 has been filed by three applicants i.e. Mr.R.M. Kapur, Mrs.Charu Garg, and Mrs.Rita Gupta, who have now been impleaded as parties to the present suit, being defendants no.5, 6 and 7. The newly added defendants no.5, 6 and 7 claim to be the owner of the suit property. The stand of defendants no.5, Mr.R.M.Kapur is that he purchased the same from Mr.S.K.Malhotra by means of an Agreement to Sell dated 30.12.1981. On the same date, Mr.S.K.Malhotra also executed a General power of Attorney in favour of wife of Mr.R.M.Kapur (defendant no.5). The General Power of Attorney and Will were duly registered. Subsequently, Mr.R.M.Kapur approached DDA for conversion of the property from lease hold to free hold and a Conveyance Deed was executed through his wife in his favour. At the request of Mr.R.M.Kapur, the property was converted from lease hold to free hold. Conveyance Deed was executed on 19.6.1998, a copy of which has been placed on record. Thereafter by means of two sale deeds dated 6.6.2013 Mr.Kapur, defendant no.5, sold the second floor to Mrs.Garg, defendant no.6, and terrace rights to Mrs.Gupta, defendant no.7. Meanwhile building plans were sanctioned at the request of Mr.R.M.Kapur by the MCD on 10.8.2013. Mr.R.M.Kapur commenced the construction over the property, which was demolished in August, 2013. Photographs have been placed on record to show that the structure of the building stands completed.

12. Mr.Gopal Jain, learned senior counsel for defendants no.5 to 7, submits that the property was sold by Mr.S.K. Malhotra, defendant no.2, and Mrs.Promila Kumar, defendant no.1, to the newly added defendant no.5. Mr.Jain further submits that possession and title of Mr.Kapur, defendant no.5, cannot be challenged in view of unimpeachable documents placed on record being (i) Agreement to Sell (ii) Will (iii) General Power of

Attorney (iv) Conveyance Deed (v) House Tax Receipt (vi) Assessment Order, (vii) and the fact that the building plans stand sanctioned at his request. Counsel, thus prays that the injunction order should be vacated and he should be permitted to construct over the plot, in question.

13. Mr.Ganda, learned senior counsel appearing on behalf of the plaintiff, refutes all the allegations made by Mr.Gopal Jain and submits that the documents sought to be relied upon by the newly added defendants are a nullity in the eyes of law since the property was mortgaged to Punjab National Bank on 30.3.1979, which was prior to the alleged sale in favour of Mr.R.M.Kapoor. Senior counsel next contends that defendant no.5 was aware about the mortgage since the year 2008 and except for a casual communication addressed to the Bank no steps were taken by defendant no.5 to protect and safeguard his interest, if any, and in case he was the owner and would have paid valuable consideration he would have taken necessary legal measures to safeguard his interest, if any as not only a notice under Section 13 of SERFASI Act has been issued by the Bank, the Bank had also threatened to take possession of the property. Mr.Ganda further submits that valuable consideration has been paid by the plaintiff to defendant no.1 and defendant no.1 is the successor-in-interest of the original owner, Mr.Sudhir Kumar Malhotra, defendant no.2, however, senior counsel further submits that pursuant to the order of the Court the entire balance sale consideration of Rs.1.65 crores stand deposited with the Registrar General of this Court and, thus, valuable rights have accrued in favour of the plaintiff qua the property in question.

14. While the plaintiff seeks confirmation of the order of injunction defendants no.5, 6 and 7 seek vacation of the interim orders.

15. I have heard learned senior counsel for the parties, considered their rival submissions and also perused the pleadings and the documents, which

have been placed on record. The plaintiff claims injunction on the basis of MoU executed between the plaintiff and defendant no.1. The MoU Shows that defendant no.1 has claimed title through defendant no.2, Mr.S.K. Malhotra, who is the erstwhile owner of the suit property. It is relevant to notice that even the newly added defendants no.5 to 7 seek title over the property in question through Mr.S.K. Malhotra, who is yet to be served.

16. While, Mr.Ganda, learned senior counsel, has strongly argued that having paid the entire sale consideration the construction should not be permited, Mr.Gopal Jain, learned senior counsel, has strenuously urged before this Court that he is in fact the owner and was in possession of the property and no fetters can be put on his rights.

17. Learned counsel for the Bank submits that any order, which may be passed, cannot be binding on the bank as a remedy to either of the parties is provided under the SERFASI Act, more particularly Section 17 of the Act and since none of the parties have chosen to seek such a remedy this Court cannot restrain the Bank from taking further action. There is force in the submission made by counsel for the Bank.

18. The short question, which comes up for consideration before this Court is as to how to preserve the property in question till the rights of the parties are adjudged as the aim and object of Order XXXIX Rules 1 and 2 CPC is to preserve the subject matter of the suit till adjudication. Defendant no.5 has placed reliance on the Conveyance Deed and other supporting documents to show that he is the owner and in settled possession and further building plans have been sanctioned at his request. Mr.Jain also submits that in case the ex parte injunction is not vacated, defendants no.5-7 shall suffer irreparable loss as investment has been made in the construction over the property and structure is complete. In case further construction is not permitted the structure is liable to be deteriorate.

Senior counsel further submits that even as per the own showing of the plaintiff, he was never in possession over the property in question.

19. The documents placed by Mr.Jain would show that a Conveyance Deed has been executed in favour of defendant no.5 way back in the year 1998; defendant no.5 is in settled possession of the property in question, which was in the knowledge of the plaintiff; and building plans have also been sanctioned at his behest and structure stands completed. Prima facie a possibility arises in this case that defendant no.2, Mr.Malhotra, sold the property to defendant no.5 and subsequently he also entered into an arrangement with Mrs.Promila Kumar, who in turn entered into a MoU with the plaintiff.

20. Whether the plaintiff is a bona fide purchaser or not is a question, which cannot be adjudicated upon at this stage. But the documents relied upon by defendant no.5 cannot be ignored especially the Conveyance Deed, House Tax Receipt and Assessment Order. It is also important to note that the plaintiff is the subsequent purchaser and it is not possible that the plaintiff did not carry out due diligence prior to purchasing the property. Once the plaintiff learnt that property was occupied by Mr.R.M. Kapur, he would have made necessary inquiries including from the House Tax Department.

21. While considering an application under Order XXXIX Rules 1 and 2 CPC, the Court must take into consideration three factors i.e. (i) strong prima facie case; (ii) balance of convenience; and (iii) irreparable loss.

22. Principles laid down for grant of interlocutory injunction have been discussed by the Supreme Court in the case of Hindustan Petroleum Corpn. Ltd. v. Sriman Narayan & Anr reported at (2002) 5 SCC 760. Relevant paragraphs of the judgment read as under:-

"7. It is elementary that grant of an interlocutory injunction during the pendency of the legal proceeding is a matter requiring the exercise of discretion of the court. While exercising the discretion the court normally applies the following tests:

(i) whether the plaintiff has a prima facie case;

(ii) whether the balance of convenience is in favour of the plaintiff; and

(iii) whether the plaintiff would suffer an irreparable injury if his prayer for interlocutory injunction is disallowed.

8. The decision whether or not to grant an interlocutory injunction has to be taken at a time when the exercise of the legal right asserted by the plaintiff and its alleged violation are both contested and remain uncertain till they are established on evidence at the trial. The relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before which that uncertainty could be resolved. The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection has, however, to be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where "the balance of convenience" lies.

9. In Dorab Cawasji Warden v. Coomi Sorab Warden (1990) 2 SCC 117 this Court, discussing the principles to be kept in mind in considering the prayer for interlocutory mandatory injunction, observed:

"16. The relief of interlocutory mandatory injunctions are thus granted generally to preserve or restore the status quo of the last non-contested status which preceded the pending controversy until the final hearing when full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully

taken from the party complaining. But since the granting of such an injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irreparable harm to the party against whom it was granted or alternatively not granting of it to a party who succeeds or would succeed may equally cause great injustice or irreparable harm, courts have evolved certain guidelines. Generally stated these guidelines are:

(1) The plaintiff has a strong case for trial. That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction.

(2) It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money.

(3) The balance of convenience is in favour of the one seeking such relief.

17. Being essentially an equitable relief the grant or refusal of an interlocutory mandatory injunction shall ultimately rest in the sound judicial discretion of the court to be exercised in the light of the facts and circumstances in each case. Though the above guidelines are neither exhaustive nor complete or absolute rules, and there may be exceptional circumstances needing action, applying them as a prerequisite for the grant or refusal of such injunctions would be a sound exercise of a judicial discretion."

23. During the course of hearing, Mr.Jain, learned counsel for the newly added defendants, was asked whether his clients are willing to give an undertaking that the suit property shall not be sold during the pendency of the suit, and further the construction would be carried out subject to final order to be passed in the suit and, thus, no special equities will flow in their favour in case the plaintiff succeeds in the suit.

24. At this stage, learned senior counsel for defendants no.5-7 on instructions

submits that defendants no.5-7 are willing to give an undertaking to the Court that any construction carried out by him shall be subject to final orders by the Court and he will not sell the property to any third party without prior permission and further no special equities will flow in his favour in case the decision is rendered against him.

25. Having regard to the submissions made by counsel for the parties and the documents placed on record, I am of the considered view that during the pendency of the suit, the suit property is required to be preserved and accordingly all the parties are restrained from selling the property bearing no.11, Masjid Moth Extension, Residential Scheme, now known as Uday Park, New Delhi, measuring 180 sq. meters. I am also of the view that in case defendants no.5-7 are not allowed to raise construction, they would suffer irreparable loss and moreover the structure, which has been completed, would deteriorate and, thus, it would be in the interest of justice that defendants no.5-7 should be permitted to carry out construction. Another reason why this Court is inclined to permit defendants no.5-7 to carry out construction is that the plaintiff was never in possession of the property. He purchased the property on as is where is basis. He was aware that the property was occupied by Mr.R.M. Kapur. It cannot be conceived that the plaintiff purchased the property without inquiring either from Mr.R.M. Kapur or from his own sources as to what was the status of Mr.R.M. Kapur in the suit property. But defendants no.5-7 cannot be permitted to take advantage of the construction, which is being carried out by them. Accordingly, the interim order dated 19.5.2014 stands vacated and the following directions are passed:

(i) Defendants no.5-7 will be permitted to carry out construction in accordance with law.

(ii) Defendant no.5, 6 and 7 will not sell or mortgage the property (except sale already carried out in favour of Mrs.Garg and Mrs.Gupta).

(iii) Defendant no.5 to 7 will also not create any third party rights without prior permission of the Court.

(iv) No special equities will flow in favour of defendants no.5 to 7.

(v) In case the plaintiff decides to clear the dues of Punjab National Bank, the same shall be subject to final orders which may be passed and no special equities will flow in favour of the plaintiff.

(vi) Plaintiff shall also not sell the property without prior permission of the Court.

26. As agreed, in case the Punjab National Bank wishes to release the title deeds, the same shall be deposited with the Registrar General of this Court, who shall keep the same in a safe custody.

27. It is agreed that in case an application is made by the plaintiff for release of payment, deposited in this Court, to the Bank, the amount shall be in favour of the Bank. All these arrangements are without prejudice to the rights and contentions of all the parties and subject to final orders which may be passed.

28. I.A.NOS.9486/2014 and 15065/2014 stand disposed of. CS(OS) 1439/2014

29. Trial of this case is expedited. The plaintiff will take necessary steps to serve the unserved defendants by all modes including dasti and affixation.

30. List on 17.10.2014.

I.A.16594/2014 (O 1 R 10) I.A.16593/2014 (O 6 R 17)

31. Let reply be filed within two weeks from today. Rejoinder, if any, be filed within two weeks thereafter.

32. List on 17.10.2014.

G.S.SISTANI, J SEPTEMBER 05, 2014 msr