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M/S Prime Time India Ltd. vs Somnath Vij And Ors
2017 Latest Caselaw 3070 Del

Citation : 2017 Latest Caselaw 3070 Del
Judgement Date : 6 July, 2017

Delhi High Court
M/S Prime Time India Ltd. vs Somnath Vij And Ors on 6 July, 2017
        IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                               Judgment delivered on: 06.07.2017

+       CS (OS) 554/2004

M/S PRIME TIME INDIA LTD.                                          ..... Plaintiff
                                Versus
SOMNATH VIJ AND ORS                                ..... Defendants
Advocates who appeared in this case:
For the Plaintiff :  Mr Anil Airi, Senior Advocate with Mr Ravi
                     Krishan Chandna, Mr Aman Madan, Ms Sadhana
                     Sharma, Ms. Bindiya Logawney and Ms Naveli
                     Kiran.
For the Defendants : Mr. Baldev Krishan for D-1.
                     Mr. Anupam Srivastav and Mr. Shikhar Sareen
                     for D-2.
                     Mr. Keshav Dayal, Sr. Advocate with Ms. Astha
                     Nigam, Mr. Nitin Dayal, Mr. Rajat Gava and Ms.
                     Jayati Parasher for D-3 & 4A.

CORAM
HON'BLE MR JUSTICE VIBHU BAKHRU

                                      JUDGMENT

VIBHU BAKHRU, J

IA Nos.1541/2005, 843/2006 & 4476/2014

1. IA no.1541/2005 is an application filed under Order XXIII Rule 3 of the Code of Civil Procedure, 1908 (hereafter 'the CPC') by the plaintiff, defendant no.1 and defendant no.3 praying that a decree be passed in terms of the compromise arrived at between the said parties.

2. The above captioned suit has been filed by the plaintiff for a decree of specific performance of an agreement to sell dated 24.12.2003 directing

Mr Som Nath Vij, Mrs Anjali Sarin, Mrs Ambica Vij being defendant nos.1 to 3 and Mr Ashwani Kapoor (original defendant no.4, since deceased and now represented by his legal heirs), respectively to perform their obligations under the said agreement and execute a registered sale deed in favour of the plaintiff with respect to the defendants' undivided 72% share in property bearing no. 32, Golf Links, New Delhi (hereafter 'the suit property').

3. It is stated that late Smt. Kailash Kapoor - the mother of defendant nos. 2 and 3, late Ashwani Kapoor (original defendant no.4) and Mr Ashok Kapoor - was the owner of the suit property. Smt. Kailash Kapoor expired on 31.10.1992 leaving behind a Will wherein, the suit property was bequeathed to Mr Ashok Kapoor and original defendant no.4, late Ashwani Kapoor. However, a family settlement was arrived at whereby original defendant no.4 (late Ashwani Kapoor), Mr Ashok Kapoor and Mr Y.P.R. Kapoor (father of defendant nos.2 and 3, original defendant no.4 and Mr Ashok Kapoor), were given 1/3rd share each in the suit property.

4. Mr Y.P.R. Kapoor expired on 01.03.1993. Thereafter, defendant no.3 filed a suit (CS(OS) 2187/1993) challenging the family settlement and for partition of the suit property. Defendant no.2 was also a party to the said suit. During the pendency of the partition suit, defendant nos.2 and 3, original defendant no.4 as well as Mr Ashok Kapoor entered into an arbitration agreement and appointed defendant no.1 as an arbitrator to decide their respective shares in the suit property and also authorised him to sell the suit property and distribute the sale proceeds amongst them.

5. Defendant no.1 rendered an award dated 28.10.2002, wherein it was held that the suit property cannot be divided by metes and bounds and the share in the suit property was determined as follows :-

                Legal Heir                      Share (%)






                (original defendant
                no.4)



6. Thereafter, defendant nos.2 and 3 and original defendant no.4 along with Mr Ashok Kapoor entered into a memo of agreement dated 10.12.2002 wherein they empowered defendant no.1 to act as per the terms of the arbitral award. An application under Order XXIII Rule 3 of the CPC was also filed in the Court (in CS(OS) 2187/1993) to take the compromise on record. The decree sheet dated 13.12.2002 was drawn accordingly.

7. In the meanwhile, Mr Ashok Kapoor entered into an agreement dated 02.07.2002 with the plaintiff to sell his 1/3rd share in the suit property for a sum of ₹1.25 crores. The entire consideration was paid by the plaintiff towards such sale. On being aware of the arbitral award and the decree passed in CS(OS) 2187/1993, the plaintiff filed a suit (CS(OS) 254/2003) for specific performance of the agreement dated 02.07.2002. In the said suit, defendant nos.1 and 3 and Mr Ashok Kapoor relied upon the terms of the decree dated 13.12.2002 passed in CS(OS) 2187/1993 and the arbitral award dated 28.10.2002.

8. Thereafter, the plaintiff entered into an agreement to sell dated 24.12.2003 with defendant no.1 for sale of 72% share of defendant nos.2 and 3 and original defendant no.4 in the suit property for a sum of ₹3.21 crores. The agreement dated 24.12.2003 was also signed by Mr Ashok Kapoor as a confirming party since it was agreed between him and the plaintiff that the consideration paid to him under the agreement dated 02.07.2002 shall be treated as the consideration for his 28% share in the suit property. It is claimed that the plaintiff paid a sum of ₹45 lacs at the time of execution of the agreement dated 24.12.2003. Further, ₹10 lacs was paid for conversion of the suit property from leasehold to freehold.

9. It is claimed that as per the terms of the agreement to sell dated 24.12.2003, the parties to the agreement agreed that within seven days of execution of the said agreement, the defendants would apply to Court for release of keys of the part of the first floor of the suit property vacated by the tenant. Additionally, it was agreed that the defendants would also file an application for settlement of the disputes in CS(OS) 254/2003 captioned as 'Prime Time India Ltd v Ashok Kapoor and Ors'. Pursuant to the said agreement dated 24.12.2003, applications were filed, however, later, the applications were sought to be withdrawn by the defendants, inter alia, on the basis that the agreement to sell dated 24.12.2003 was not definitive in nature.

10. In the present suit, by an order dated 27.05.2004, an ad-interim injunction was granted whereby the parties were directed to maintain status quo with regard to the title and possession pertaining to the undivided 72 % share in the suit property.

11. Thereafter, the plaintiff, defendant no.1 and defendant no.3 filed the present application (IA no.1541/2005) setting out the terms of the compromise arrived at between defendant no.3 as also Mr Ashok Kapoor with the plaintiff. The relevant extract of the present application is set out below:-

"4. That the plaintiff and the defendant No.1 have accordingly settled the dispute concerning the share of the defendant No.3 i.e. 22% (twenty two percent) in the suit property and concerning 28% share of Mr. Ashok Kapoor in the said property, the subject matter of Suit No. 254 of 2002, on the following terms conditions:

(a) The defendant No.3 has agreed to transfer her share in the suit property in favour of the plaintiff to the extent of 22% share with all her rights, title and interest therein.

(b) That the plaintiff has agreed to release to the defendant No.3 and defendant no.3 has agreed to accept her share of consideration in pursuance of the settlement of all her disputes with regard to her 22% share and the defendant No.1 has no objection to such settlement between the plaintiff and the defendant No.3.

(c) That the plaintiff shall release a further sum of Rs.86,00,000/- (Rupees eighty six lakhs only) by way of Bank Draft in favour of the defendant No.3 in pursuance of the agreement dated 24.12.2003 as full and final payment towards the share of the defendant No.3 at the time of recording of the above terms of settlement by this Hon'ble Court in the above suit and in suit no. 254 of 2002. A photo copy of the Bank Draft Bearing No. 007788 dated 23/2/05 issued by United Bank of India, Greater Kailash-I,

New Delhi favour the defendant No.3 is attached hereto.

(d) That after receiving the above said amounts in respect of her 22% share in the suit property the defendant No.3 shall be left with no right, title and interest in the suit property and the same shall vest with the plaintiff. The plaintiff agrees that the defendant No.3 shall not be liable for any sort of expenses for plaintiff's affecting its transfer in their own name to the extent of 22% share in the suit property. The defendant no.1 and 3 have no objection if the possession of the part of the First Floor of the property, keys of which are presently with the Hon'ble Court, be handed over to the Plaintiff.

(e) The defendant No.1 and 3 agree and undertake to execute the conveyance deed/sale deed and all such documents such as General power of Attorney, Special Power of Attorney, affidavits, etc. in favour of the plaintiff to the extent of 22% share of the defendant No.3 and w.r.t. 28% of Mr Ashok Kapoor, of whom the defendant no.1 is registered Power of Attorney.

(f) The defendant No.1 and 3 agree and undertake not to create any impediment and shall assist and sign and execute all such documents as may be required by the plaintiff for transfer of all the rights, title and interest in the suit property to the extent of 22% share of the defendant No.3 and 28% share of Mr. Ashok Kapoor, on being called upon by the plaintiff and without any demur or protest.

(g) That similarly the defendant no.1 shall make statement and withdraw all their objections in Suit No. 254 of 2002 and decree in terms of settlement shall be passed for 28% share of Mr. Ashok Kapoor.

5. The defendants No.1 and 3 above named admit the claim of the plaintiff having been settled to the extent

of 22% without any further liability and have no objection if a decree for specific performance as being prayed for by the plaintiff is passed in terms of the settlement stated herein above."

12. IA no.1541/2005 has been signed by the plaintiff, defendant no.1 and Mr K.C. Vij, father-in-law and the constituted attorney holder of defendant no.3. The application is supported by the affidavits of the said persons.

13. Almost simultaneous to filing IA no.1541/2005, Mr Ashok Kapoor, the plaintiff, defendant no.1 and defendant no. 3 also filed a similar application being IA 1515/2005 in CS(OS) 254/2003. It is relevant to note that the said application expressly recorded that Mrs Ambica Vij, (who was arrayed as defendant no.5 in the said suit) had agreed to settle all disputes with the plaintiff with respect to her 22% share in the suit property. Mr Ashok Kapoor, Mrs Ambica Vij (defendant no.3) and Mr Som Nath Vij (defendant no.1) who were arrayed as defendant nos.1, 5 and 7 respectively in the said suit also agreed to withdraw all allegations and objections in their written statement(s). The relevant terms of the said application were noted by the Court in the order dated 13.07.2016 whereby the said suit was decreed in favour of the plaintiff and against Mr Ashok Kapoor. The relevant extract of the said order has been reproduced below:-

"36. By this application-

(i) defendant No.1 confirmed that he had received the entire sale consideration in terms of agreement to sell dated 2nd July, 2002 of Rs.1.25 crores from the plaintiff;

(ii) it was agreed that the share of the defendant No.1 in the property as mentioned in the agreement to

sell dated 2nd July, 2002 be read as 28% instead of 1/3rd and the sale consideration received be treated in lieu of the said 28% share in the property;

(iii) the defendants No. 1 Mr. Ashok Kapoor, 5 Mrs. Ambica Vij and 7 Mr. Som Nath Vij withdrew all the allegations and objections in their written statement/s;

(iv) the defendant No.5 Mrs. Ambica Vij agreed to settle all her disputes with the plaintiff with respect to her 22% share in the property and to file a compromise in connected suit CS(OS) No.554/2004;

(v) the defendants No.1,5 and 7 gave their no objection to hand over physical possession of part of the first floor in custodia legis to the plaintiff;

(vi) the defendants No.1, 5 and 7 agreed to execute documents for transfer of 28% share of the defendant No.1 Mr. Ashok Kapoor and 22% share of the defendant No.5 Mrs. Ambica Vij (which had also been agreed to be sold by the defendant No.5 to the plaintiff and for specific performance of which connected CS(OS) No.254/2003 is pending);

(vii) the defendants No.1, 5 and 7 agreed not to create any impediment to the transfer of title of the property in favour of the plaintiff;

(viii) the defendant No.7 Mr. Som Nath Vij confirmed that power of attorney executed by defendant No.1 Mr. Ashok Kapoor in his favour was subsisting;

(ix) the plaintiff and defendant No.1, 5 and 7 sought recording of the said compromise."

14. Subsequent to the filing of IA no.1541/2005, defendant nos.1 and 3 filed another application (IA no.843/2006) seeking to withdraw the settlement arrived at between the parties (as recorded in IA no.1541/2005)

on various grounds including concealment of material facts by the plaintiff (most of which were already pleaded in the written statement filed by defendant nos.1 and 3). The said application was filed by defendant no. 1 for and on behalf of defendant no.3. A similar application (IA no.818/2006) was also filed in CS(OS) 254/2003 by Mr Ashok Kapoor, which was dismissed by the Court on 13.12.2012.

15. Thereafter, by an order dated 10.07.2006, the said defendants were directed to deposit the entire consideration received from the plaintiff in view of the challenge raised, by filing of the application, IA no.843/2006.

16. Despite the order passed on 10.07.2006, defendant no.3 continued to utilise the funds received from the plaintiff and the amount of ₹86 lacs was deposited belatedly on 19.09.2011.

17. Subsequently, defendant no.3 also filed IA no.4476/2014 inter alia seeking that the compromise agreement, that is, IA no.1541/2005 be rejected. Defendant no.3 inter alia claimed that defendant no.1 had no authority to enter into any compromise with the plaintiff and had misled Mr K.C. Vij, father-in-law of defendant no.3 (who is also her power of attorney holder), into believing that IA no.1541/2005 and IA no.1515/2005 in CS(OS) 254/2003 were being entered into as a step towards implementing the compromise agreement dated 24.12.2003. It was also contended that IA no.1541/2005 is an attempt to secure a sale of the shares of the co-owners by the plaintiff in collusion with defendant no.1 and his lawyer, Mr Baldev Krishnan, who was also the counsel of defendant no.3 and Mr Ashok Kapoor.

18. It is an admitted position that defendant no.3 had received an amount of ₹86 lacs from the plaintiff as evident from the statement of Mr K.C. Vij, the constituted attorney of defendant no.3, recorded on 25.02.2005 as also the affidavit affirmed by defendant no.3 on 15.05.2007 in compliance with order dated 15.03.2007. There is also no dispute that defendant no.1 had also received ₹55 lacs on behalf of the co-owners.

19. A Coordinate Bench of this Court considered the application, IA no.1515/2005 filed in suit CS(OS) 254/2003 on 13.07.2016 and decreed the said suit in terms of the compromise as recorded in IA no.1515/2005. In normal course, the said application, IA no.1515/2005 in CS(OS) 254/2003 having been allowed by this Court, no further challenge to the compromise as recorded in the present application, IA no.1541/2005 could be entertained and defendant no. 3 (arrayed as defendant no. 5 in CS(OS) 254/2003) had confirmed the compromise as recorded in IA no.1541/2005. However, the Court while allowing the said application (IA no.1515/2005) had specifically observed that nothing observed therein would come in the way of this Court in considering the matter in this suit and shall not influence such consideration.

20. Having noted the above, this Court cannot ignore the fact that Mr K.C. Vij as attorney holder of Mrs Ambica Vij (defendant no.3) had admittedly signed the application (IA no.1515/2005 in CS (OS) 254/2003) whereby her compromise as indicated in the present application (IA no.1541/2005) was reaffirmed by her.

21. Having stated the above, this Court may now examine the opposition by Mrs Ambica Vij, defendant no.3 to the present application (IA

no.1541/2005). As indicated above, defendant no.3's opposition to the present application is articulated in IA no.843/2006 and IA no.4476/2014.

22. In the said application (IA no.843/2006), the applicants (defendant no.1 and defendant no.3) have referred to the multiple actions instituted by parties in respect of the suit property. In paragraph 4, it is averred that the agreement to sell dated 24.12.2003 (the specific performance of which is sought in the present suit) had never reached finality. It is further averred that the defendants would be able to explain their position only if the original of the agreement dated 24.12.2003 is filed.

23. In paragraph 6 of the said application (IA no.843/2006), defendant no.3 has conceded that IA no.1541/2005 has been filed as defendant no.3 was "fed up with the longevity of the pendency of various suits in respect of the suit property". It is relevant to point out that the said application has been filed by defendant no.1, Mr Som Nath Vij, for self and on behalf of defendant no.3. It is claimed that defendant no.1 had signed IA no.1541/2005 "due to inadvertence". It is claimed that IA no.1541/2005 and the compromise recorded therein ought to be rejected for various reasons, which are summarized below:-

i. The total consideration independently agreed between plaintiff and defendant no.3 has neither been finalized nor has been paid to the satisfaction of defendant no.3.

ii. Conduct of the representative of plaintiff, Mr Jha disentitles him from claiming discretionary relief as the plaintiff has encroached upon the first floor of the suit property by flouting orders of this Court.

iii. The share of Mr Ashok Kapoor in CS(OS) no. 254/2003 has not

been finalized.

iv. The terms of the compromise have not been finalized, particularly, the consideration payable to defendant no.3 and the other co-owners, namely, Mr Ashwani Kapoor (since deceased) and Mrs. Anjali Sarin are not agreeable to any sort of compromise.

v. There is no lawful agreement between the parties.

vi. The application is ambiguous as the total amount of consideration is uncertain.

24. Defendant no.3 has filed yet another application (IA no.4476/2014) to oppose the recording of the compromise. The grounds as urged in the said application for opposing the compromise are summarized as under:-

i) Defendant no.1 was not entitled to enter into an agreement or sell a part of the suit property;

ii) Defendant no.1 had no authority to enter into any compromise;

iii) The application filed (IA no.1541/2005) is an attempt to play a fraud upon the Court.

iv) The constituted attorney of defendant no.3 (that is, Mr K.C. Vij) was misled by defendant no.1 regarding the nature of compromise agreements as reflected in the present application as well as in IA No. 1515/2005 in CS (OS) 254/2003. It is alleged that Mr K.C. Vij was misled into believing that the compromise agreement dated 24.12.2003 (which is the subject matter of dispute in the present suit) was being implemented and the applications in question were a step towards implementing the same.

v) The plaintiff had fraudulently admitted to illegally obtaining the

possession of the entire suit property by seeking keys of the vacant first floor which was lying with the Registry of this Court.

25. Defendant no.3 has also alleged that the plaintiff, defendant no.1 and the lawyer, Baldev Krishan, had colluded to present a compromise relating to sale of part of the suit property which was never consented to by defendant no.3. It is further stated that defendant no.1 with a view to cover their tracks had filed applications for withdrawal of the compromise recorded in the present application being IA no.1541/2005 (IA no.818/2006 in CS(OS) 254/2003 and IA no.843/2006 in the present suit).

26. Although it was urged on behalf of the applicant (defendant no.3) that the compromise is fraudulent, this Court is unable to appreciate or accept the said contention. Indisputably, the applicant (defendant no.3) had full knowledge of the pending litigations and therefore all averments made to the effect that plaintiff had instituted several actions and/or caused to have instituted several actions does not further the applicant's case of fraud in any manner.

27. There is also no dispute that Mr K.C. Vij was the duly constituted attorney of defendant no.3 and was duly empowered to sign the compromise application. However, it is claimed that he had been misled by defendant no.1 into believing that the entire suit property was being sold while in fact only the share of defendant no.3 was sought to be transferred in terms of the present application. This Court is unable to accept the said contention as the terms of compromise as recorded in the present application are unambiguous and unequivocal and there could be no room for any doubt that the application only concerns the share of defendant no.3. Mr Ashok Kapoor had also agreed to enter into a compromise with

the plaintiff for sale of his 28% undivided share in the suit property and this was also clearly referred to in paragraph 4 of the present application (IA no.1541/2005). There could thus be no room for doubt that the compromise entered into by the plaintiff at the material time was only with regard to the undivided shares of Mr. Ashok Kapoor and defendant no.3 in the suit property. Accordingly, Mr. K.C. Vij (constituted attorney of defendant no.3) had also signed the compromise application (that is, IA no. 1515/2005 in CS(OS) 254/2003) on behalf of defendant no.3; the said application also confirmed the agreement of Mr Ashok Kapoor and defendant no.3 to sell their undivided share in the suit property to the plaintiff.

28. IA no. 1541/2005 is duly supported by an affidavit of the constituted attorney of defendant no.3 as well as by defendant no.1. The said affidavits clearly affirm that the deponents had understood the contents of the application and further affirmed the same to be true and correct. Admittedly, Mr K.C. Vij is the duly constituted attorney of defendant no.3 and it is not open for defendant no.3 now to contend that Mr K.C. Vij had been misled into affirming the contents of the application, which were clear and unambiguous.

29. On 25.02.2005, defendant no.3 through Mr K.C. Vij, defendant no. 3's attorney holder, had expressed the willingness to settle the disputes with the plaintiff with respect to her share in the suit property and prayed for a compromise decree to be passed in terms of IA no. 1541/2005. The statement as recorded is set out below:

"IA No.1541/2005 has been signed by me. I have read and understood the contents of this I.A. This application is

supported by my affidavit also. The original General Power of Attorney has been handed over by me to learned counsel for the plaintiff.

The plaintiff has handed over a Pay Order in the sum of Rs.86 lacs drawn on United Bank of India, Greater Kailash Branch, New Delhi, dated 23rd February, 2005, bearing No.007788, drawn in favour of defendant No.3 to me today in Court.

I pray that a compromise decree in terms of the compromise recorded in IA No.1541/2005 be passed."

30. A perusal of the statement recorded indicates that IA no. 1541/2005 was signed by Mr K.C. Vij on behalf of defendant no. 3 after understanding the contents therein. Mr K.C. Vij also received a pay order for a sum of ₹86 lacs drawn in favour of defendant no.3. In the end, Mr K. C. Vij sought a decree in terms of compromise recorded in IA no. 1541/2005.

31. Defendant no. 1's statement in support of IA no. 1541/2005 was also recorded on the said date, which reads as under:

"IA No.1541/2005 has been signed by me. I have read and understood the contents of this I.A. This application is supported by my affidavit also. The original General Power of Attorney has been handed over by me to learned counsel for the plaintiff.

I pray that a compromise decree in terms of the compromise recorded in IA No.1541/2005 be passed."

32. It is also contended that the consideration offered was a fraction of the market value of the applicant's (defendant no.3) undivided share of 22% in the suit property. This contention also is wholly unpersuasive. The terms of the compromise application are clear and it is plainly stated that

the plaintiff would release a sum of ₹86 lacs to defendant no.3 as full and final payment towards her share in the suit property.

33. In compliance with the orders passed by this Court, defendant no.3 had filed an affidavit dated 15.05.2007, clearing affirming that she had received a total amount of ₹1,11,00,000/- (One Crore Eleven Lakhs) as part consideration against her 22% undivided share in the suit property. This includes a sum of ₹86 lacs received by defendant no.3 from the plaintiff on 25.02.2005. The affidavit filed by defendant no.3 on 15.05.2007 also indicated that she had deposited a sum of ₹21 lacs in the Registry of this Court but the balance amount received had been utilized in the manner as indicated in the affidavit. Thus, there could be no dispute that defendant no.3 had received the entire consideration as mentioned in the present application (IA no.1541/2005).

34. It was also contended that the plaintiff had independently agreed with defendant no.3 for a higher consideration. However, the said contention cannot be accepted. The same is without any basis or any material on record.

35. This Court is also unable to accept that the compromise is not lawful. It is contended that sale of undivided share by any of the co-owners of the suit property would be contrary to the consent decree passed on 13.12.2002 whereby all the co-owners had inter alia agreed that the suit property could not be partitioned by metes and bounds and would be sold as a whole. This contention is also inconsiderable as defendant no.3 was not precluded from selling her undivided share. It is also relevant to mention that Mr Ashok Kapoor had already sold his undivided 28% share of the suit property to the plaintiff. Further the Court had in the order dated

13.07.2016 (passed in IA no.1515/2005 in CS(OS)254/2003) clarified that the sale of the undivided share of Mr. Ashok Kapoor would not prejudice any rights of the other co-owners. Clearly, the settlement as recorded in IA no.1541/2005 would also be without prejudice to the rights and contentions of the co-owners. Thus, this Court finds no reason to reject IA no.1541/2005.

36. Accordingly, IA no.843/2006 and IA no.4476/2014 are rejected. The present application (IA no.1541/2005) is allowed.

37. The suit is, accordingly, decreed against defendant no.3 in terms of the compromise application (IA no.1541/2005). Let a decree sheet be drawn up. The application shall form a part of the decree sheet.

38. It is clarified that this order will not affect the rights of other co- owners of the suit property in any manner whatsoever. This would include their right, if any, to demand that defendant no. 3's undivided share be sold to them and/or that the suit property be sold as a whole for realising the value of their undivided share in the suit property. This is of course subject to their establishing such rights.

39. The Registry is directed to refund the amount deposited by defendant no.3 with the Registry of this Court along with accrued interest.

CS (OS) 554/2004

40. List for further proceedings on 09.08.2017.

VIBHU BAKHRU, J JULY 06, 2017 pkv/RK

 
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