Shefali Varma vs Meenakshi Varma & Ors
2017 Latest Caselaw 5788 Del

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*     IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                      Reserved on: 12th October, 2017
                                     Pronounced on: 24th October, 2017

+     CS(OS) 1781/2014 & CCP (O) No.149/2014, IA Nos.11156-
      57/2014, 11159/2014, 11490/2014, 11492/2014, 11566/2014,
      11568/2014, 11570/2014, 13471/2014, 13791/2014, 17342/2014,
      18301/2014, 18890/2014, 5174/2015, 13184/2015, 16153/2015,
      19601/2015, 7533/2016, 7644/2016, 13231/2016, 3852/2017,
      8145/2017

      SHEFALI VARMA                                     ..... Plaintiff
                  Through :            Mr.Sacchin Puri, Sr. Adv. with
                                       Ms.Namitha Mathews, Adv.
                  versus
    MEENAKSHI VARMA & ORS                      ..... Defendants
                  Through : Mr.Akhil Sibal, Sr. Adv. with
                            Mr.B.Shekhar      and      Mr.Mohit
                            Sharma, Adv.
                            Mr.Gautam Gupta, Adv. for
                            applicant in IA No.5174/2015
                            Mr.Rishabh Sharma, Adv. in IA
                            No.18890/2014
CORAM:
HON'BLE MR. JUSTICE YOGESH KHANNA

YOGESH KHANNA, J.

IA Nos.13066/2016, 5748/2017, 9530/2017

1. This order be read in continuation of the orders dated 26 th May, 2017 and 31st May, 2017 whereby the defendants No.1 and 2 were required to complete certain formalities in the form of filing an affidavit as also filing the statement of account of security deposits (received from

the perspective buyers/tenants etc.) against the given space/flat/shop. The arguments are carried further by the learned senior counsel for the defendant by saying that presently the defendants need to lease 2.71 lakh sq.ft area and out of which for 1.55 lakh sq.ft they intend to execute the LOIs and in 55 cases they have already executed the LOIs, placed on record but for 34 LOIs time had expired. It is stated the details of amount so collected as security deposit, has been placed before the Court along with an affidavit and hence the prayer is to permit the defendants to lease the vacant space in the RD Mall as they have been negotiating with the perspective tenants for giving the spaces on lease to save the parties to litigation from further losses; the RD Mall being a commercial property can fetch huge rents and any effort to put an hold to such negotiation process may lead to loss to all the family members of Verma family.

2. The learned counsel for the defendants have referred to various orders wherein from time to time the Court has permitted sale of spaces at different places or to put tenants in such buildings. The learned counsel for the defendant referred to an order dated 24th July, 2014, which runs as under :

"As prayed, the interim order is clarified to the extent that the order will not come in the way of defendants No.3 and 4 for negotiating with perspective purchasers or tenants, for giving any property on lease or negotiating for sale."

3. Further on 13.08.2014 this Court ordered:

"It is also pointed out by learned senior counsel for the plaintiff that with respect to three flats

there is no occupancy certificate. Mr.Nayar submits that in case there is no occupancy certificate, the sale deed would not be executed with respect to three flats. It is also principally agreed that it will be open for both the parties to look for buyers for sale of nine fiats, as mentioned in page 13 of the application and two flats mentioned in para 6 of the application, and also prospective tenants in Vijaya Building. It is also agreed that the flats will be sold and given on rent to the highest buyer/tenant."

4. Further on 26.08.2014 the Court notes:

"Leave is also granted to the defendants to give the flats at Vijaya Building on rent; however, once the terms including rate of rent is finalized with the tenant, an e-mail will be sent to the plaintiff giving the details. As agreed, plaintiff shall have the option to give details of tenant(s) with a better offer within those five (5) days.

The defendants agree to provide details of the nine (9) flats, details of which are at page 496 of the paper book and the details of three (3) flats, details of which are at page 547 of the paper book. As regards particulars sought by counsel for the plaintiff with regard to flats for being sold, details of which are at page 496 of the paper book, it is pointed out that these nine (9) flats comprise of 575 sq. fts. super area.

The defendants will inform the plaintiff by an e- mail in case they have purchasers and the price being offered; five (5) days' time will be granted to the plaintiff to propose a buyer with a better offer. In case the plaintiff do not respond within five (5) days, it is made clear that the defendants will be free to sell the flats to the highest purchaser.

Plaintiffs will also be entitled to inspect the premises after giving notice by e-mail of one (1) day to the defendants. Copies of the occupancy certificate will be provided during the course of the day.

Counsel for the plaintiff submits that the details of the statement of accounts with respect to the four (4) banks, list of which has been handed over to counsel for the defendants, should be provided. Counsel for the defendants submits that he will take instructions in the matter.

Further time is sought by counsel for the defendants, to file written statement. The request for extension of time is opposed. By way of last opportunity, let the written statement be filed within ten days. Replication be filed within ten days thereafter.

It is agreed that upon selling the flats and on giving the same on lease, at the first instance the sale proceeds of these flats shall be utilized for making payment to the DTCP."

5. On 15.07.2015, the Court noted as under :

"1. At the outset, Mr. Chaudhary, learned counsel for the applicant/Association states that he does not wish to press IA 24289/2014, for seeking impleadment in the partition suit instituted by the plaintiff. However, he wishes to press LA. 24290/2014, filed for seeking modification of the order dated 29.05.2014, for the reason that due to the passing of the said order, the defendant No.4/company, who had floated a project in the year 2005, for raising a residential complex in Ardee City, Sector-52, Gurgaon, namely, "Palm Grove Heights", is not in a position to hand over possession of the apartments to the allottees. He states that there are approximately 400 apartments that have been constructed by the defendant no. 4 / company and the applicant/Association is representing the interest of about

200 allottees. Contrary to the assurance given by the defendant No.4/company that the project would be completed and possession of the apartments shall be handed over to the allottees in the year 2009, learned counsel submits that it is now almost ten years, from the date when the project was floated in the year 2005, but the applicants, who have invested their hard earned money in the said flats and taken loans for depositing the installments, have been left high and dry.

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4. As the plaintiff has some reservations about the genuineness of the members of the applicant/Association and it is stated that if left unsupervised, the defendant No.4/company is likely to hand over possession of the apartments to some Benami holders of the defendant no. 1 and 2, with the consent of the parties, it is deemed appropriate to appoint a Local Commissioner in whose presence, completion of the formalities of handing over/taking over of the possession of the apartments shall take place. Learned counsels request that in view of the ticklish nature of the matter, an advocate with some experience may be appointed as a Local Commissioner to execute the task.

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6. Accordingly, Ms. Asha Jain Madan, Advocate (Mobile No.9810041102) is appointed as a Local Commissioner in whose presence, the documents for handing over/taking over of the possession of the apartments in the subject project shall be executed. The Local Commissioner shall satisfy herself about the genuineness of the Builder-Buyer Agreements in each case before permitting the defendant No.4/company to execute documents for handing over possession thereof to the allottees. At the time of executing the said documents, the allottees and the defendant No.4/company shall produce the original documents before the Local Commissioner to establish that the allotment made is genuine, including the relevant records

maintained by the defendant No.4/company which shall reflect the amounts that have been deposited and those that are outstanding against each name. The process of handing over / taking over the possession of the apartments shall be undertaken/subject to the occupancy certificate being issued by the civic authority, and a copy thereof being furnished by the defendant nor 4 / company to the learned Local Commissioner and the plairmff through counsel, within one week from the date of receipt.

7. Defendant no. 4 / company shall make available adequate space for the Local Commissioner to execute the commission at its office situated at Gopal Das Tower, Barakhamba Road. The fee of the Local Commissioner is tentatively fixed at Rs.2 lacs, to be borne by the plaintiff, apart from the out of pocket expenses that may be incurred by her. The Local Commissioner shall submit a report within eight weeks from the date a copy of the occupancy certificate is handed over to her by the defendant No.4/company. She shall be at liberty to file an interim report even earlier and seek appropriate orders from the Court, if considered necessary."

6. Further the order dated 15.12.2015, notes:

"4. Mr.Nayar, learned Senior Advocate appearing for the defendants No.l, 3 & 4 states that during the pendency of the present proceedings, vide orders dated 13.8.2014 and 26.8.2014, the defendants were granted liberty to sell 12 flats in Ardee City, Gurgaon, Haryana on the condition that they would first inform the plaintiff by an e-mail in case they have purchasers for the said flats and specify the price being offered and if the plaintiff comes up with a better offer within a fixed time-frame, then the flats could be sold at a better offer. In the alternate, the defendants were given liberty to sell them to the higher purchaser. Learned counsel for the defendants requests that a similar procedure may be permitted to be adopted by granting permission to the defendants to sell three plots and three flats in Ardee City,

Gurgaon, Haryana that are a part of stock-in-trade of the defendant No.4 / company so that the sale proceeds can be utilized for furnishing a Bank Guarantee to the electricity agency.

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6. Mr. Nayar, learned Senior Advocate explains that the sale proceeds received from the sale of nine flats sold by the defendants pursuant to the order dated 26.8.2014, were primarily utilized towards the external development charges of the project and his client can furnish the relevant details to the Court, if directed.

7. On the next date of hearing, counsel for the defendants shall make available the relevant details of sale of the nine flats in question with the documentary proof for the court's perusal.

8. In the meantime, the first relief prayed for in the application is allowed. The defendants are permitted to hand over the possession of a parcel of land measuring 0.25 acres as specified in the Zoning Plan to the Dakshin Haryana Bijiee Vitran Nigam Ltd., for setting up a sub-station at Palm Grove Heights, Ardee City, Sector 52 and 57, Gurgaon, Haryana."

7. On 07.01.2016 this Court held:

"8. Having regards to the submission made by the counsel for the defendants No.l, 3 & 4 and taking into consideration the averments made in line present application, it is deemed appropriate to permit the applicants to generate funds for furnishing a bank guarantee to Dakshin Haryana Bijiee Vitran Nigam Ltd. towards 100% margin money by selling flats/plots as detailed in para 16 of the present application to the extent of Rs.8.00 crores, by following the same procedure as was laid down in the order dated 26.8.2014.

9. In view of the submission made by the learned Senior Advocate appearing for the plaintiff that on the last occasion, the defendants did not strictly adhere to the procedure laid down in the order dated 26.8.2014, having failed to give an option to the plaintiff to find a buyer for the two flats mentioned at Sr.No.2 & 4 of Annexure-A to the affidavit dated 5.1.2016, the applicants/defendants are directed to ensure that they strictly adhere to the procedure laid down in the said order so that before each flat/plot is proposed to be sold, the plaintiff is given an option and ample time to find a buyer, as already ordered. The plaintiff shall be permitted a period of two weeks from the date of receipt of communication from the defendants to identify a suitable buyer for the flats/plots."

8. The matter also went in Division Bench in FAO(OS) No.317/2014 wherein on 17.07.2014 the following order was noted :

"6. Since the appellants state on oath that they are negotiating with the existing tenants for renewal/fresh lease to be executed and raise a grievance that the injunction not only affects the rights of the appellants but even is a stumbling block qua the right of the tenants, with consent of the plaintiff (respondent No.1) we permit the renewal/extension/execution of fresh leases for the flat on the 2nd floor of Dr.Gopal Das Bhawan, measuring 8932 sq.ft (super area) tenanted to Japan International Cooperation Agency as also the flat on the 3rd floor of Dr.Gopal Das Bhawan, measuring 5068 sq.ft (super area) let out to the same agency, currently fetching a rent of `235/- per sq.ft per month noting that the renewal/extension of lease would be at the same rent. The rent for the flat on the 8th floor of Dr.Gopal Das Bhawan, measuring 2150 sq.ft (super area) tenanted to BNP Paribas Asset Management India Pvt.Ltd. is currently `130/- per sq.ft per month which is proposed to be enhanced to `156/- per sq.ft per month. Rent for the upper ground floor flat measuring 7000 sq.ft (super area) tenanted to Reliance Industries Ltd. is `72/- per

sq.ft per month which is proposed to be enhanced to `150 per sq.ft. per month.

7. We are informed that the period of the lease proposed to be extended/ renewed for fresh lease period is three years.

8. The appellant shall file, along with an affidavit, a copy of the lease deeds as and when executed in the suit.

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11. If this be so, we would expect that the learned Single Judge would, time permitting, if not deal with all facets of the ex-parte ad- interim injunction granted would certainly devote some time on the next date of hearing to consider the hardship which the appellant claims is ensuing as a result of the ex-parte ad-interim injunction granted. If possible, the learned Single Judge would hear the two applications on which ex-parte ad-interim injunction has been granted as also the application filed and any other application which may be filed to vacate the ex-parte ad-interim injunction and would endeavour to dispose of the same as expeditiously as possible."

9. Thus, from time to time this Court have been giving permission to the defendants to sell/lease the property so as to avoid financial losses or to save the property from deterioration by keeping it vacant.

10. Qua the application under Order 39 Rule 2A of the plaintiff, her mother the defendant No.1, has filed her affidavit dated 21.07.2017 giving details of the deposit received by the company from perspective tenants and the summary chart of LOIs reveal that LOIs are either subject to "signing of agreement" or "without prejudice and subject to filing agreement" or "the LOI shall automatically stand terminated if the lease agreement is not signed within a month of signing of the LOI". Thus, in

these circumstances there exist no possibility to create rights orally and the only purpose of negotiating would be to set down the terms and conditions of letting out the premises, but subject to the agreement(s). In any case, no lease deed has been entered into between the parties till date to say any interest is created. The defendants have only negotiated with the perspective tenants as were permitted by order dated 24.07.2014 and token amounts so received are lying in bank. The mall has obtained its occupancy certificate in the year 2010 and till date most of the spaces are lying vacant and if are not filled up, there is apprehension that a mall in the vicinity may come up and may reduce the value of space in the present mall. Moreso the defendants are rather acting in consonance with what is referred to in para (b) page 69 of the plaint.

"(b) Problems relating to three hundred thousand sq.ft. Shopping Mall in Ardee City The Ardee City Shopping Mall called Plaza Gardenia has been also improperly managed by the Defendant no.2 due to the entire one lac sq.ft. of space, which was sold to different buyers, is lying vacant and not a single one of the fifty buyers have been given possession of the units. This has resulted in several cases being filed against Defendant N0.5 and the directors (including The Plaintiff) because of which the Plaintiff is suffering due to no fault of her own. Separate from the irreparable loss of reputation and goodwill that has been caused to the Ardee Group, it has also exposed the Groupto losses of hundreds of crores. Further, more than 2,00,000 (two hundred thousand) sq.ft. of space in the aforesaid Shopping Mall which is meant for leasing, held by the Defendant N0.5 is lying vacant for the last more than 4 years notwithstanding the fact that the completion certificate for the same was procured by the Plaintiff in 2009 due to her tireless efforts. The Plaintiff in order to generate revenues introduced several lucrative rental offers for the

said 2,00,000 sq.ft. of space, however, the lucrative rental offers were either never taken up or stalled by the Defendants No. 1and 2. Resultantly, the Defendant N0.5 lost more than a sum of Rs. 100 crores in rental income over last 4 years, besides the loss of rental to the flat buyers who have invested their money and faith in the Ardee brand."

11. Thus, whatever has been done is not against the interest of the family but rather is to save it from losses. Hence with consent of all the family members and to save the goodwill and loss to the defendant companies and as the parties have no faith upon each other so as an interim measure, Sh.Rakesh Kapoor (retd. District Judge-Delhi) is hereby appointed as a Court Observer to do the following:-

i) to supervise the leasing, initially, for a period of six months;

ii) the defendants shall provide to the learned observer, the list of unleased units/shops (for which LOI's have been executed and filed before this court) within a week of this order. The learned observer may verify the credentials of prospective tenants, verify terms of the lease, payment terms, proof of payments already made etc;

iii) to examine the final draft of lease deed(s) and may suggest the defendant to incorporate any other term(s) etc. if found necessary and/or valid;

iv) no lease shall be beyond the period of five years, initially, but with an option to renew under intimation to court;

v) if LOIs is not executed, such units be treated as unleased units;

vi) the list of unleased units/shops (for which LOIs have not been executed) with details of area of each unit, local layout plan, approvals, permissions, if any, be laid before the learned observer;

vii) a copy of list of unleased units may be given to the plaintiff to enable them to find a prospective tenant and the learned observer may consider the offer given by the plaintiff if better to that of the defendants; and shall intimate the defendants who shall then go for the best offers and shall submit a copy of LOI to the learned observer;

viii) if any area(s)/units, have already been sold during the lifetime of Sh. Ashok Verma, its possession be handed over to the buyers on complete payments to the defendant companies;

ix) the monies/ rentals/ security amount/ maintenance amount received from the tenants, purchasers etc; shall be deposited in a separate account to be opened by the defendant no.1 company and all expenditure recurring or otherwise; including salaries, maintenance, statutory dues/taxes, pertaining to such Mall, be paid from such account;

x) the monthly statements be filed before the learned observer who shall examine the same and may file status report, if need arose.

xi) all books of accounts shall be audited by chartered accountant and be maintained as per law;

xii) the plaintiff may, through her representatives, be allowed to inspect the said mall once a month on due intimation to learned observer and may suggest ways of improvement, if any.

xiii) The fee of Local Commissioner is fixed at `1,25,000 per month plus expenses on actual basis payable by the defendant company.

12. The defendants may lease the vacant space by observing the above terms and conditions. To come up now on 29.01.2018.

YOGESH KHANNA, J OCTOBER 24, 2017 VLD