Delhi High Court
Daljit Singh And Another vs Hari Steel & General Industries ... on 24 July, 2017
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Order reserved on: 21.07.2017
% Order delivered on: 24.07.2017
+ I.A. No.1557/2007 in CS(OS) 2046/2006
DALJIT SINGH AND ANOTHER ..... Plaintiffs
Through: Mr. A.S. Chandiok, Senior Advocate
along with Ms. Manmeet Arora &
Mr. Rishabh Bansal, Advocates.
versus
HARI STEEL & GENERAL INDUSTRIES LTD.
AND ORS. ..... Defendants
Through: Mr. Vikram Saini, Mr. Manish
Aggarwal, Ms. Chhaya Sharma &
Ms. Prerna Ajmani, Advocates for
defendants No.1 to 6.
Mr. Harish Malhotra, Senior
Advocate along with Ms. Vibha
Mahajan Seth, Advocate for
defendant No.8.
CORAM:
HON'BLE MR. JUSTICE VIPIN SANGHI
JUDGMENT
VIPIN SANGHI, J.
1. This is an application filed by plaintiffs, Daljit Singh and Sarvjit
Singh, under Order 12 Rule 6 r/w Section 151 of the Code of Civil
Procedure to seek judgment/decree in terms of the prayer made in the suit.
The Plaintiffs have filed the suit praying for a decree of specific
performance of an agreement to sell concluded on 07.04.2005 and further
recorded on 03.05.2005 between the Plaintiffs and Defendant No.1 company
in respect of property bearing No. A-22, Mohan Cooperative Industrial
Estate, Mathura Road, New Delhi. The Plaintiffs also seek a decree of
permanent injunction against the defendants to restrain them from selling,
transferring or encumbering the suit property to third party, and a permanent
injunction against Defendant No. 2 to 6 from transferring or encumbering
their shareholding of 10,00,000 shares in the Defendant No. 1 Company.
The reliefs sought in the application are premised on the claimed admissions
made by Defendant no. 1 to 6 in their written statement or otherwise.
2. As per plaint, defendant No. 2 - the Managing Director and the
Principal Shareholder of Defendant No. 1 company, approached the
plaintiffs for the sale of the suit property and the business carried on under
the name and style of "South Delhi Toyota" including the goodwill of the
said business. Defendant no. 2 to 6 are family members, and shareholders of
defendant no. 1 Company. The plaintiffs claim that Defendant No.2 held out
that he was the person responsible for, and in charge of the affairs of the
defendant no.1 company and, therefore, was duly authorized to execute
contracts and make promises on behalf of the defendant No.1 Company.
Defendant no.2 expressly represented to the plaintiffs that defendant no.1
company is the absolute owner in possession of the suit property, free from
all encumbrances, except claims of the DDA on account of the alleged
misuse on the property, as well as sub-division of the premises. Defendant
no.2 further represented to the plaintiffs that he is the authorized franchisee
of Toyota Kirloskar Motors Pvt. Ltd. for trading and servicing the Toyota
brand of cars and vehicles. The showroom is operated under the name and
style of "M/s. South Delhi Toyota" in one half portion of the suit property.
Defendant no.2 also represented that he had assigned his dealership rights
from Toyota Kirloskar Motors Pvt. Ltd. in favour of defendant No.1
Company.
3. The plaintiffs further claim that on 07.04.2005, the plaintiffs and
defendant no.1 company - through its Managing Director defendant no.2,
arrived at a concluded agreement for the sale of the said property and
transfer of the goodwill and franchise rights held in respect of the running
business of South Delhi Toyota for a total consideration of
Rs.55,50,00,000/- (Rupees Fifty Five Crores and Fifty Lacs Only). The
plaintiffs further agreed to pay to the defendants the difference between the
assets and liabilities of the dealership business in terms of the conditions
stipulated in the agreement. In pursuance of the said agreement dated
07.04.2005, the plaintiffs paid an amount of Rs. 2 crores to Defendant No. 1
- Rs 1 crore in cash, and Rs. 1 crore by cheque. The receipt of the same was
acknowledged by defendant No. 2 as Chairman-cum-Managing Director of
Defendant No. 1 on the letter head of Defendant No. 1. The plaintiffs
further state that an agreement to sell dated 03.05.2005 was executed in
pursuance of the agreement dated 07.04.2005, which sets out in detail three
distinct items forming subject matter of the agreement, and the respective
sale consideration payable for each of these items.
4. The breakup of the total consideration disclosed in the agreement is as
follows:
1 Rs.49,00,00,000/- For the purchase of the land and
building at A-22, Mohan Coop.
Industrial Estate, Mathura Road,
New Delhi.
2 Rs. 6,50,00,000/- For the purchase of the running
business of 3S Dealership of Toyota
Kirloskar Motor Pvt Ltd carried on
in the name and style of 'South Delhi
Toyota'.
3 Difference in the value To be ascertained.
of the assets and
liabilities of the
running business i.e.
the net worth of South
Delhi Toyota, on the
basis of the balance
sheet agreed to be
furnished as on
15.06.2005, to be
transferred on
30.06.2005.
5. The plaintiffs state that they paid a further amount of Rs. 3 Crore on
03.05.2005 to Defendant No. 1 Company as recorded in the said agreement
itself. In the agreement dated 03.05.2005 the aspect of payment of part
consideration is recorded as follows:
"2 (a) That out of the total consideration of Rs.55,50,00,000/-
(Rs. Fifty five Crores Fifty Lacs Only) the purchasers have paid
to the vendor a sum of Rs.5,00,00,000/- (Rs. Five Crores Only)
as part consideration; at the time of execution of this
Agreement to Sell in the following manner:
a) Cheque no. 840711 dt 7.4.2005 drawn on ICICI Bank,
Punjabi Bagh West, New Delhi - Rs.1,00,00,000/- (Rs.
One Crore only).
b) Cheque no. 840633 dt 28.4.2005 drawn on ICICI Bank,
Punjabi Bagh West, New Delhi - Rs.1,00,00,000/-
c) Cash - Rs.3,00,00,000/- (Rs. Three Crores only)
The receipt of which the vendor hereby acknowledges."
6. Plaintiffs further state that on 24th Nov, 2005 summons were received
from office of Assistant Commissioner of Police, Economic Offences Wing,
Anti-Land & Building Racket Section, Delhi Police, in respect of a
complaint filed by one Praveen Kumar Jolly (subsequently impleaded in the
suit as defendant No.8), claiming rights in one half portion of suit property
on the basis of MOU dated 24.05.2003 executed with defendant No.1
company. Thereafter, the plaintiffs made further inquiries which revealed
that the said Praveen Jolly (Defendant No. 8) had also filed a Civil Suit on or
around 28th October 2005 as CS(OS)1508/2005 titled "Praveen KumarJolly
Vs. M/S Hari Steel & General Industries Ltd & Anr." seeking specific
performance of an alleged MoU dated 24.05.2003. The plaintiffs further
state that defendants have categorically admitted the execution of the
agreement to sell with the plaintiffs herein, in CS(OS) 1508/2005, filed by
Shri Praveen Kumar Jolly.
7. The present application under Order 12 Rule 6 CPC was filed by the
plaintiffs on 09.02.2007, seeking relief on the basis of the claimed
admissions made by Defendant No.2 to 6 on 20.12.2006 in the proceedings
arising out of Bail Application Nos. 4109-4110/2006 in FIR No. 517/2006
under Section 420/ 120-B IPC registered against defendants no. 1 to 6 on the
complaint made by Praveen Jolly at PS - Sarita Vihar. It was alleged in the
said FIR that the defendants no. 2 to 6 cheated defendant no. 8 by entering
into multiple agreements for sale of the same property. The plaintiffs submit
that the defendants have categorically admitted their readiness and
willingness to execute a sale deed with respect to suit property in favor of
the plaintiffs in terms of the agreement dated 03.05.2005 in the proceedings
undertaken in the said Bail Application.
8. The submission of Mr. Chandhiok, learned senior counsel for the
plaintiffs is that while seeking anticipatory bail vide Bail Application
Nos.4109-4110/2006 in case FIR No.517/2006 referred to above, the
applicants, including defendant No.2, inter alia, admitted that they had
entered into the MOU dated 03.05.2005 with the plaintiffs, to whom they
had agreed to sell the entire property for Rs.55.50 Crores. In the Bail
proceedings, the submission of counsel representing the bail applicants,
including defendant No.2 herein, was that:
"... ... ... even today that his clients are prepared to return the
balance amount of Rs.2.90 crores to the first buyer Praveen
Jolly immediately with reasonable interest that may be fixed by
the Court and this contention is made in order to show the
bona-fides on the part of the petitioners that they never
intended to cheat either the first buyer or the second buyer.
The learned counsel for the petitioners has further submitted
that his clients and also ready and willing to execute sale deed
of the property in question in favour of the second set of
buyers in terms of MOU dated 03.05.2005."(Emphasis
supplied)
9. Mr. Chandhiok submits that in view of the aforesaid statement made
by the defendants in the bail proceedings, they are bound to fulfill their
obligations under the agreement to sell dated 03.05.2005, which is not in
dispute.
10. Mr. Chandhiok submits that the accounts/ balance sheet as at
31.08.2007 of defendant No.1 placed on record shows under the heading
"Cash & Bank Balance", the cash receipt against sale of property as Rs.4
Crores in the custody of defendant No.2. It also shows under the heading
"Deposits from" in "Schedule - VIII Current Liabilities", receipt of Rs.5
Crore from "M/s Daljit Singh & Sarvjit Singh". Mr. Chandhiok submits that
this balance sheet has been signed for and on behalf of the defendant No.1
by defendant No.2.
11. Mr. Chandhiok has also sought to place reliance on the statement of
defendant No.2 recorded in the present suit and in C.S.(O.S.) No. 1508/2015
on 29.01.2007 under Order X CPC. The defendant No.2 accepted the fact
that the agreement dated 03.05.2005 was entered into between the parties for
sale of the whole property for a total consideration of Rs.55.50 Crore and
that the said agreement was in respect of the land and building for Rs.49
Crores, and for the goodwill of the business of South Delhi Toyota, for
Rs.6.5 Crores. He submits that the business of South Delhi Toyota having
been discontinued, the plaintiffs are entitled to enforce the agreement qua
the immovable property.
12. In his statement recorded on 29.01.2007, defendant No.2 admitted, as
correct, that S.R. Varshney & Co. were the Chartered Accountants. He also
admitted that the letter dated 14.11.2005 was addressed by S.R. Varshney to
defendant No.1 company and to him (which was given exhibit mark as Ex.
'X'). Mr. Chandhiok submits that this letter dated 14.11.2005 (Ex. 'X')
addressed to defendant No.2 in his capacity as Managing Director of
defendant No.1, inter alia, states that:
"3. We were also informed that you have further entered into
an agreement with Sh. Daljit Singh and Sh. Sarvjit Singh
for the sale of whole of property and the running
business of your car -dealership M/S SOUTH DELHI
TOYOTA on 03.05.2005. You received the following
payments as advance.
(a) By cheques Rs.2,00,00,000
(b) In Cash Rs.3,00,00,000
Rs.5,00,00,000
4. The perusal of accounts show a deposit of
Rs.2,00,00,000/- only and the cash receipt of
Rs.3,00,00,000/- is not accounted for in the books of
account of the company.
Your accounts staff has informed us that the cash of
Rs.3,00,00,000/- is in your personal custody."
13. Mr. Chandhiok submits that the aforesaid balance sheet was filed only
after a notice to produce the same was given to the defendants dated
03.11.2011; the same was not complied with; the plaintiffs filed I.A. No.
150401/202 under Order XI Rule 12 & 14 CPC seeking direction to produce,
inter alia, the said balance sheet; the said application was contested by the
defendants by filing their reply, and; the passing of the order dated
10.01.2004 by the learned Joint Registrar allowing the said application and
directing production of the balance sheet in question.
14. Mr. Chandhiok submits that the aforesaid displays the conduct of the
defendants in seeking to withhold the incriminating documents, namely the
balance sheet of defendant No.1 company - which recognizes and
acknowledges receipt of Rs.4 Crores towards sale of the property in
question, which is now sought to be denied by the defendants.
15. Mr. Chandhok has sought to place reliance on the judgment of this
Court in Sunrise Construction Vs. Ms. Veena Wahi, ILR (2009) VI Delhi
38, wherein this Court passed a decree for specific performance on
admission under Order XII Rule 6 CPC. In this case, the defence of the
defendant was that she had signed the receipt containing the terms of the
agreement in good faith, and the same did not reflect the actual transaction
between the parties. The Court rejected the said defence, while relying upon
Sections 91 & 92 of the Evidence Act, and in the face of the admitted
document Ex.PW-1, which was the receipt dated 18.09.2007.
16. Mr. Chandhiok submits that the said decision squarely applies in the
facts of the present case. Thus, Mr. Chandhiok submits that the present suit
- so far as the relief of specific performance is concerned, should be decreed
in respect of the suit property, since the plaintiffs have always been, and are
even now ready & willing to complete the transaction by making payment of
the balance consideration under the agreement towards sale of the property.
17. On the other hand, learned counsel for the defendants No.1 to 6, has
vehemently opposed the present application. He submits that far from
making any admission, the defendants No.1 to 6 have seriously disputed the
genuineness of the agreement dated 03.05.2005, since two pages of the
original agreement signed by defendant No.2, i.e. pages 3 & 4, have been
replaced and substituted by pages which bear forged signatures of defendant
No.2. He submits that the consistent stand of the defendants is that though
the agreement had been arrived at between the parties for sale of the suit
property, goodwill and assets of the defendant company, for Rs.55.50 Crores
plus, only an amount of Rs.2 Crores had been received by the defendants,
and not Rs.5 Crores, as claimed by the plaintiffs.
18. He submits that additional issues have been framed in the suit on
05.05.2010 including the issue:
"(2) Whether pages 3 and 4 of the agreement dated 3rd May,
2005 have not been executed by defendant No.2 and there are
insertions/ interpolations in the agreement? If so, to what
effect? OPD-1 to 6"
19. Learned counsel for defendants No.1 to 6 submits that in view of the
said issue of fact having been framed - which goes to the root of the matter,
it would be premature to assume, at this stage, that the agreement produced
by the plaintiffs dated 03.05.2005 is the genuine and binding agreement
between the parties. He places reliance on the decision of a Division Bench
of this Court in Express Towers P. Ltd. Vs. Mohan Singh, 2007 (97) DRJ
687. In paragraph 13 of this decision, the Court, inter alia, observed:
"13. It is well settled that pleadings including written
statement have to be read as a whole to decide whether there is
unequivocal and clear admission by a party. The respondent
nos. 1 and 2 have denied executing any documents or sale
deeds in favour of the defendant nos. 3-5 in the plaint. It is
claimed that their signatures have been forged and the
persons responsible must be brought to book and prosecuted.
The defendants Nos. 3-5 have not appeared in the Suit and have
been proceeded ex-parte. As noticed by the learned Single
Judge, the Court has not proceeded under Order VIII and
passed any decree. The appellants herein being the plaintiffs
have been asked to lead evidence on the pleas and contentions
raised. It is only after evidence is led and the respective claims
and stands are adjudicated that it can be decided whether the
alleged sale deeds are forged, fabricated and fictitious
documents. The Court will also examine whether the appellants
or the respondent nos. 1 and 2 were responsible for executing
the said documents." (emphasis supplied)
The Division Bench dismissed the first appeal against the order passed
by learned Single Judge dismissing the plaintiff's application under Order
XII Rule 6 CPC. He also placed reliance on Raj Kumari Garg Vs. S.M.
Ezaz, 2012 (132) DRJ 108.
20. Learned counsel for defendants No.1 to 6 submits that the forgery and
fabrication of the agreement dated 03.05.2005 by the plaintiffs came to light
when the said agreement was produced by the plaintiff in C.S.(O.S.) No.
1508/2005 - Mr. Praveen Kumar Jolly. Immediately on receipt of the copy
of the agreement dated 03.05.2005, the defendants herein moved I.A./ Crl.
M.A. No. 61/2006 in C.S.(O.S.) No. 1508/2005 under Section 340 Cr.P.C.,
challenging the genuineness of the agreement dated 03.05.2005. He submits
that till the issue about the genuineness of the agreement dated 03.05.2005 is
decided finally, no decree for specific performance could be passed,
premised on the said disputed agreement.
21. Learned counsel for defendants No.1 to 6 has also referred to the
averments made by the defendants in paragraph 2 of the written statement
under the heading "Preliminary Objections", and paragraphs 4, 5 & 8 under
the heading "Preliminary Submissions", which read as follows:
PRELIMINARY OBJECTIONS:-
"2. The Defendants raise preliminary objection to the very
maintainability of the plaint on the ground that the
proceedings initiated by the Defendants vide I.A. No. 61 of
2006 in CS (OS) No. 1508 of 2005 under Section 340 Cr.P.C.
challenging the genuineness of the Agreement dated
3.05.2005 is still pending before this Hon'ble Court. In view
of the above, the present suit is liable to be dismissed at the
threshold stage itself." (emphasis supplied)
PRELIMINARY SUBMISSIONS:
"4. The Defendant No.1 to 6 state that although an
arrangement was entered into with Mr. Daljit Singh and Mr.
Sarvjit Singh for the sale of land admeasuring 19074.69 sq.
yards bearing No. 22, Mohan Cooperative industrial Estate,
Mathura Road, New Delhi -110-004 but the same was never
concretized into an agreement as the nature, extent and various
clauses as also the amount of consideration were yet to be
finalized. This is also evident from the fact that almost all the
necessary columns were left blank to be filled in after mutual
agreement only. The incomplete/unsigned document, which
was taken away and was lying either with Mr. Daljit Singh
and Mr. Sarvjit Singh, or with Mr. T.R. Arya, who, with
vested interest, had been instrumental all-through in
negotiating/influencing the purported transaction."
(emphasis supplied)
"5. That when a copy of the said document was produced in
the ongoing proceedings of Civil Suit (O.S) No. 1508 of 2005,
the Defendant No.2 was shocked to see that not only the
columns which were left blank had been filled up with
distorted facts and figures, but the document also bore the
forged signatures of the Defendant No.2. The statement of
Defendant No.2 recorded before this Hon'ble Court testifies to
the forgery/ fraud committed by the Plaintiffs.
Copy of the statement/ deposition of Defendant No.2 in
C.S. (OS)00 1508 of 2005 on 28th February 2006 is annexed as
ANNEXURE -A." (emphasis supplied)
"8. The Defendants also state that an amount of Rs.2 Crores
was intentionally taken by Mr. T.R. Arya from the Plaintiffs
in May 2005 in the absence of Mr. Ram Dilawri allegedly for
running of the business of the Company. The ploy was
devised by Mr. T.R. Arya only to mount pressure on the
Defendants to yield to the unscrupulous methods of the
Plaintiffs to part with the subject property. However on
coming to know about the said amount having been taken by
Mr. T.R. Arya, in the name of the Company the Defendant
No.2 immediately returned the said amount to the
Plaintiffs."(emphasis supplied)
22. Learned counsel for defendants No.1 to 6 has also drawn the attention
of the Court to paragraphs 2 & 3 of I.A./ Crl. M.A. No. 61/2006 in
C.S.(O.S.) No. 1508/2005 under Section 340 Cr.P.C., which reads as
follows:
"2. The Defendant No.1 states that although an arrangement
was entered into with Mr. Daljit Singh and Mr. Sarvjit Singh
but the same was never concretized in an Agreement as its
nature, extent and various clauses as also the amount of
consideration were not finalized. This is also evident from the
fact that almost all the necessary columns were left blank to be
filled in after mutual agreement only. Consequently, the
document, which was incomplete remained unsigned. The
unsigned document was taken away by and is still lying either
with Mr. Daljit Singh and Mr. Sarvjit Singh, or with Mr. T.R.
Arya, who, with vested interest, had been instrumental all-
through in negotiating/influencing the purported transaction.
3. That when a copy of the said document was produced in
the ongoing proceedings, the Defendant No.1 was shocked to
see that not only the columns which were left blank had been
filled up with distorted facts and figures, but the document
also bore the forged signatures of the Director of the
Defendant No.1. Furthermore, even the date of the alleged
Agreement and the clauses stating about the payment of
rupees three crores in cash, in addition to two cheques of
rupees one crore each, were falsely and fraudulently
incorporated." (emphasis supplied)
23. Learned counsel for defendants No.1 to 6 has placed reliance on
Shanti Kumar Panda Vs. Shakuntala Devi, 2004 Crl.L.J. 1249, wherein the
Supreme Court has held that a decision by a Criminal Court does not bind a
Civil Court, while a decision of a Civil Court binds a Criminal Court. He,
therefore, submits that the submissions of the accused/ bail applicants, i.e.
the defendants herein recorded in the order dated 20.12.2006, are of no avail
to the plaintiffs.
24. Learned counsel for defendants No.1 to 6 further submits that in view
of the pendency of C.S.(O.S.) No. 1508/2005 filed by Praveen Kumar Jolly
in respect of the earlier agreement to sell, wherein an order of status quo has
been passed on 28.10.2005, no decree of specific performance can be passed
in favour of the plaintiffs in the present suit. He submits that the Doctrine of
lis pendens contained in Section 52 of the Transfer of Property Act would
apply in the facts of the present case.
25. Learned counsel for defendants No.1 to 6 has also placed reliance on
Guruswamy Nadar Vs. P. Lakshmi Ammal (Dead) Through LRs. and
Others, (2008) 5 SCC 796 : AIR 2008 SC 2560, and Har Narain (Dead) by
LRs Vs. Mam Chand (Dead) by LRs and Others, (2010) 13 SCC 128.
26. In his rejoinder, Mr. Chandhiok has submitted that the plaintiffs are
willing to give an undertaking that the decree for specific performance that
may be passed in favour of the plaintiffs, would be subject to the relief that
may be granted in the suit preferred by Praveen Kumar Jolly, i.e. C.S.(O.S.)
No. 1508/2005. He points out that the defendants herein filed their reply to
I.A. No. 8899/2005 - filed by the plaintiff Praveen Kumar Jolly in
C.S.(O.S.) No. 1508/2005. Along with the said application, the plaintiff in
the said suit - Praveen Kumar Jolly, filed the copy of the agreement dated
03.05.2005 between the plaintiff and the defendants No.1 to 6 herein. In
their reply filed to the said application on 11.11.2005, the defendants No.1 to
6 admitted in paragraph 6:
"6. ... ... ... that the Agreement with Daljit Singh and
Sarvjit Singh was entered into after the MOU dated
24.05.2003 between the plaintiff and Defendant No.1 came to
an end. However, the terms and conditions of the Agreement
remain to be fulfilled by the concerned parties. Furthermore,
the very Agreement makes it more incumbent on the part of the
Plaintiff to deposit the money since he cannot sit pretty by
locking in litigation the property worth crores of rupees and
derailing any prospective deal on the said property. The
Defendant No.1 states that the Plaintiff was aware of the
Agreement and it is false that the Agreement was received by
the plaintiff through registered post." (emphasis supplied)
27. In response to the submission of learned counsel for defendants No.1
to 6 that the doctrine of lis pendens contained in Section 52 of the Transfer
of Property Act would be applicable, Mr. Chandhiok submits that on the
date when the agreement was entered into between the plaintiffs and the
defendants No.1 to 6, i.e. on 03.05.2005, no suit was pending in respect of
the suit property, much less C.S.(O.S.) No. 1508/2005.
28. Mr. Chandhiok has also placed reliance on the decision of this Court
in I.A. No. 8723/2014 in C.S.(O.S.) No. 299/2012 titled Harbhajan Singh
Chopra Vs. Fountain Head Hotels Pvt. Ltd decided on 29.07.2015, to
submit that after the relevant facts have been admitted, the mere fact that the
defendants have tried to put their own interpretation with a view to defeat
the claim of the plaintiffs, would not be sufficient to decline the relief under
Order XII Rule 6 CPC. The Court further held that in view of the
admissions made, inter alia, in the judicial proceedings, it was not necessary
to undertake a trial in the matter which would lead to wastage of time and
costs to the parties.
29. Mr. Chandhiok also placed reliance on P.C. Gulati Vs. Lajya Ram
Kapur, AIR 1969 (Delhi) 275. In this case, the Court held that merely
because multiple suits are pending, the Court would not be justified in
keeping all of them pending when one of them could be disposed of on the
basis of the admissions made by the defendants. Thus, Mr. Chandhiok
submits that pendency of C.S.(O.S.) No. 1508/2005 is no ground to keep the
present suit pending in view of the admissions made by the defendants.
30. After the order was reserved initially in the aforesaid application on
28.04.2016, the matter was mentioned by learned senior counsels
representing the plaintiffs and the defendant No.8. The Court directed the
matter to be listed for directions on 05.05.2016. The plaintiffs also
undertook to communicate the date fixed to learned counsel for the
defendants No.1 to 6 and the defendant No.7.
31. To obviate the submission of learned counsel for the defendants No.1
to 6 that the prior suit of Mr. Praveen Kumar Jolly (defendant No.8), i.e.
C.S.(O.S.) No.1508/2005 is pending wherein an order of status quo is
operating, the statement of defendant No.8 Mr. Praveen Kumar Jolly and the
plaintiffs were placed on record, inter alia, recording the no objection of
defendant No.8 to the passing of a decree in the present case while it being
agreed that the plaintiffs in the present suit be bound by the interim order
dated 14.11.2005 passed in C.S.(O.S.) No. 1508/2005, and in the event of
the said suit being decreed by this Court, the sale deed shall be executed by
the plaintiffs in their favour and that the interim order shall continue to
operate till the final disposal of C.S.(O.S.) No. 1508/2005 and bind the
plaintiffs herein.
32. Having heard learned counsel for the parties and considered their
submissions and documents placed on record & relied upon by the parties, I
am of the view that there is no merit in the present application and the same
deserves to be dismissed.
33. The statement of Mr. Ram Dilawdri, defendant No.2 was recorded by
the Court in C.S.(O.S.) No.1508/2005 on 28.02.2006. In this statement, the
defendant No.2, inter alia, admitted that the defendant No.1 company had
entered into an agreement on 27.04.2005. However, he stated that no date
was put on the agreement when it was signed on 27.04.2005. He claimed
that the said agreement was in four pages and that he had signed the said
agreement, on each page at two places. He claimed that pages 3 & 4 of the
said agreement produced on record had been changed/ replaced. He also
claimed that the photocopy of the agreement, which was signed on
27.04.2005, was given to him three days later. He produced a copy of the
said photocopy and tendered the same as D-1. He claimed that though the
first two pages bear his signature, the signatures on pages 3 and 4 were
forged. He claimed that when he signed the said document, the blank spaces
were not filled. The blanks were filling in the handwriting of Mr. T.R. Arya,
defendant No.7. He claimed that the blanks were filed by Mr. T.R. Arya
without his knowledge or concurrence. At the same time, defendant No.2
admitted as correct that the sale consideration agreed for sale of the property
was Rs.55.50 Crores. Pertinently, he claimed that he was "given only two
Crores by means of two cheques and the payment of Rs.5 Crores shown at
page 3 of the agreement is falsely indicated". He claimed that he came to
know of the forged document dated 03.05.2005 when the plaintiff moved
I.A. No. 8899/2005 (the plaintiff being Praveen Kumar Jolly) and annexed a
copy of the said agreement with that application. He stated that when he
was shown a copy of the agreement, he had informed his lawyer about the
aforesaid facts. He also stated that the receipt annexed as Annexure A-8 to
the I.A. No. 8899/2005 was not signed by him, and his signatures were
forged. He admitted as correct that the receipt was in the handwriting of Mr.
T.R. Arya.
34. The plaintiffs have produced on record their communication dated
20.08.2005 addressed to defendant No.1, marked to the attention of
defendant No.2. The said document has been admitted by the defendant
during admission/ denial of documents conducted on 04.04.2009 and is
exhibited as Ex.P-3. Pertinently, in this document, the plaintiffs stated that
they "were supposed to give you an instalment out of the agreed price on
30.06.2005 after getting the balance sheet of the company as on 15.06.2005
and the acquisition of the running business of South Delhi Toyota, yet we
gave Rs. Two Crores in favour of Hari Steel & General Industries Ltd. in
the month of May 2005. Mr. T.R. Arya requested that for the business
needs of the company, a sum of Rs. Two Crores was required." (emphasis
supplied)
35. The plaintiffs further stated in Ex. P-3 that on 30.06.2005, upon their
visit for the purpose of giving the balance of installment due on 30.06.2005
and to take over the running business of South Delhi Toyota, the plaintiffs
were surprised upon being told that the balance sheet as on 15.06.2005 was
not ready, and shall take another two months. Paragraph 3 of this
communication (Ex. P-3) is pertinent, and the same reads:
"3. You were kind to repay Rs. Two Crores taken by Mr.
T.R. Arya for purpose of business of the company in the month
of May 2005; because of your non-commitment of handing over
the business as on 01.07.2005. We appreciate that business
etiquette and ethics on your part; and your promise to honour
the agreement by keeping the initial payment of Rs. Two
Crores." (emphasis supplied)
36. From paragraph 3 quoted above, it appears that the plaintiffs' own
stand was that the defendant had retained "the initial payment of Rs.Two
Crores" only, while repaying Rs.2 Crores to the plaintiffs - which had been
taken by Mr. T.R. Arya for the purpose of the business of company in the
month of May 2005.
37. Thus, on the one hand, there is the communication of the Chartered
Accountants of the defendants S.R. Varshney stating that defendant No.2
had received cash payments from the plaintiffs, and; the balance sheet of the
defendant No.1 company showing the receipt towards sale of the property of
Rs.5 Crores, on the other hand, is the stand taken by the defendants No.1 to
6 that only an amount of Rs.2 Crores had been received from the plaintiffs -
through cheque, under the agreement, coupled with the plaintiffs' own
communication (Ex. P-3) which shows that the defendants have retained the
initial deposit of Rs.2 Crores after returning Rs.2 Crores received by Mr.
T.R. Arya.
38. There also appears to be incongruity in the facts and figures inasmuch,
as, while the plaintiffs claim to have paid Rs.3 Crores in cash under the
agreement, the balance sheet of the defendant No.1 company as on
31.03.2007, relied upon by the plaintiffs shows cash in hand against sale of
property in the custody of Mr. Ram Dilawdri, Managing Director, as Rs.4
Crores. All these aspects need indepth scrutiny and analysis post trial,
before a definite view can be taken in the matter
39. So far as the communication of the Auditor Mr. S.R. Varshney, is
concerned, firstly, it is not a communication of the defendants. Therefore,
whatever is stated in the said communication cannot be attributed as an
admission by the defendants. Even otherwise, this communication states
that "We were also informed that you have further entered into an
agreement with Sh. Daljit Singh and Sh. Sarvjit Singh for the sale of whole
of property and the running business of your car -dealership M/S SOUTH
DELHI TOYOTA on 03.05.2005. You received the following payments as
advance.
(a) By cheques Rs.2,00,00,000
(b) In Cash Rs.3,00,00,000
Rs.5,00,00,000"
40. It also states that "Your accounts staff has informed us that the cash of
Rs.3,00,00,000/- is in your personal custody". This communication, prima
facie, appears to be rather vague and non-specific. The Auditor does not
state as to who has informed him that under the agreement dated 03.05.2005
cash of Rs.3 Crores had been received and that the same was in the personal
custody of the Managing Director Mr. Ram Dilawdri, defendant No.2. This
communication also required defendant No.2 "to please confirm us the
above facts so that proper accounting entries be made ... ... ...". There is
nothing to show whether defendant No.2 confirmed the information that the
auditor may have gathered from the undisclosed source.
41. The aforesaid raises a serious dispute as to whether, or not, the
defendants have actually received the amount of Rs.5 Crores under the
agreement, as alleged by the plaintiffs, or only Rs.2 Crores by cheque as
alleged by defendant Nos. 1 to 6. The defendants have alleged that the two
pages of the agreement, which, inter alia, record the receipt of Rs.5 Crores
by the defendants under the agreement - including Rs.3 Crores in cash, have
been replaced with pages which bear the forged signatures of defendant
No.2. On this aspect, additional issues were framed by the Court on
05.05.2010. Since the plaintiffs claim to have made cash payments of a very
large amount of Rs. 3 Crores under the agreement, which have been disputed
by the defendants, it would be for the plaintiffs to prove the same, inter alia,
by showing the availability of such large amounts of cash with them on the
relevant dates. In my view, till those issues are decided - which are issues
of fact, it cannot be said at this stage with certainty whether the agreement
dated 03.05.2005 relied upon by the plaintiffs is the one entered into
between the parties, or not.
42. It is well-settled that to entitle a plaintiff to a decree on admission, it is
essential that the admission made by the defendant in respect of the plaintiffs
case/ claim should be clear and unequivocal. In the present case, the only
admission made by the defendants No.1 to 6 is in relation to their entering
into the agreement/ MOU with the plaintiffs for sale of the suit property; the
goodwill of South Delhi Toyota, and; the net assets of the said business. It
was also agreed that the sale consideration for the suit property was Rs.49
Crores; for the goodwill of the business of South Delhi Toyota was Rs.6.50
Crores and; for the sale of the net worth of the business of South Delhi
Toyota, the same amount was to be transferred to the defendants. To this
extent, it could be said that there are admissions made by the defendants
No.1 to 6. However, there is a serious dispute as to whether the plaintiffs
have paid Rs.5 Crores, i.e. Rs.2 Crores by cheque and Rs. 3 Crores in cash to
defendants No.1 to 6, or only Rs.2 Crores by cheque. This dispute goes to
the root of the matter. Unless and until the said dispute is resolved in favour
of the plaintiffs, no decree for specific performance of the agreement can be
passed by the Court. Pertinently, the Court has already framed issues of fact
on the aforesaid aspect.
43. In the light of the aforesaid discussion, I do not consider it necessary
to deal with the case laws or go into the other aspects or submissions
advanced by learned counsels. Consequently, I find no merit in the present
application and dismiss the same with costs of Rs.50,000/- payable to
defendants No.1 to 6. The costs be paid within two weeks.
44. It goes without saying that the observations made in this order shall
not prejudice the case of either party at the time of consideration of the
merits of the case post trial.
(VIPIN SANGHI)
JUDGE
JULY 24, 2017
