Jharkhand High Court
M/S. Coal Inspection Service vs Lalit Kumar Agarwal on 6 August, 2025
Author: Anubha Rawat Choudhary
Bench: Anubha Rawat Choudhary
2025:JHHC:22144
IN THE HIGH COURT OF JHARKHAND AT RANCHI
First Appeal No. 210 of 2023
1. M/s. Coal Inspection Service, a registered partnership firm having
its Registered Office at Dhansar, P.O.+ P.S.- Bank More, District:
Dhanbad, through its Partner Nos. 1, 2.
2. Tarun Gupta, aged 86 years, son of Late Sudhir Kumar Gupta, by
faith Hindu, by occupation Business, resident of "Laxmi Niwas"
Hari Gopal Mazumdar, Road, P.O.- Bank More, P.S.- Bank More,
Dist.: Dhanbad
3(a). Miss Arpita Roy, Daughter of Late Prabhat Kumar Roy,
Resident of Laxmi Niwas, Hari Gopal Mazumdar, P.O. Bankmore,
P.S. Dhanbad, Dist.- Dhanbad (substituted in place of Prabhat
Kumar Roy, son of Late Pundari Kakshya Roy, vide order
dated 13.06.2024)
.... .... Plaintiffs/Appellants
N.B: Pabitra Kumar Ghosh, son of late Sasanka Shekhar Ghosh,
resident of "Laxmi Niwas" of Hari Gopal Mazumdar Road, P.S.-
Bank More, Dist.: Dhanbad was one of the partners and was a
party when the suit was filed. During the pendency of the Suit, the
said Pabitra Kumar Ghosh resigned from the partnership and
seized to be a party and was liable to be expunged, the resolution
of the remaining partner of the partnership firm also accepted the
resignation. Further, he died on 19.06.2018. Therefore, Pabitra
Kumar Ghosh has not been impleaded as an appellant in the
appeal.
-Versus-
1. Lalit Kumar Agarwal, son of Late Bajrang Lal Agarwal, by faith
Hindu, by occupation business, resident at Lal Bazar, Post &
Thana-Jharia, Dist-Dhanbad
2. Gopal Kumar Agarwal, son of Late Bajrang Lal Agarwal, by faith
Hindu, by occupation business, resident at Lal Bazar, Post &
Thana-Jharia, Dist.- Dhanbad.
3. Smt. Anju Devi Agarwal, W/o Sri Lalit Kumar Agarwal, by faith
Hindu, by occupation House wife, resident at Lal Bazar, Post &
Thana-Jharia, Dist. Dhanbad.
4. Smt. Suman Agarwal, W/o Gopal Kumar Agarwal, by faith Hindu,
by occupation house wife, resident at Lal Bazar, Post & Thana-
Jharia, Dist.- Dhanbad ... Defendants/Respondents
---
CORAM: HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY
---
For the Appellants : Mr. Niraj Kishore, Advocate
: Ms. Shobha Rani, Advocate
For the Respondents : Mr. Shailesh Kumar Singh, Advocate
: Mr. Abhijeet Kumar Singh, Advocate
---
JUDGMENT
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Reserved on 11.03.2025 Pronounced on 06.08.2025
1. This first appeal has been filed against the Judgment dated
28.02.2023 (Decree signed on 13.03.2023) passed by the learned Civil
Judge (Senior Division)-VII at Dhanbad in Title Suit No. 233 of 2007
whereby the suit filed by the appellants has been dismissed on contest.
The suit was filed for following reliefs: -
(i) A decree may be passed in favour of the plaintiffs and
against the defendants that the documents purporting to be
an agreement for sale dated 21.11.2006 executed by plaintiff
no. 1 to 3 and defendant no. 1 and 2 is an incomplete,
inconclusive and inchoate agreement, so neither confers, nor
create any right in the favour of the defendants in respect of
the property mentioned in the Schedule -A of plaint and same
cannot be legally enforced against plaintiffs.
(ii) A permanent injunction may kindly be grated restraining the
defendants, their men, agents, representatives from claiming
any rights or authority on the incomplete, inconclusive and
inchoate agreement dated 21.11.2006 and/or fastening any
liability upon plaintiffs on the strength of that inchoate and
incomplete agreement and/or doing any acts in order to
create any liability upon the plaintiffs or the Schedule -A
land.
(iii) A decree for damages of Rs.60 lac with pendente lite interest
@ 18% thereon may kindly be passed in favour of the
plaintiffs and against the defendants on account of damages
suffered by the plaintiffs by dint of failure of transaction on
the part of the defendants in setting up and running of St.
Xaviers School on the schedule -A land.
(iv) A decree for the damages of Rs.30 lacs against the
defendants and in favour of the plaintiffs for the damages
caused to the fame, prestige, image, reputation and status of
the plaintiffs in public life.
(v) A decree for a sum of Rs. 10 lacs against the defendants for
the mental agony suffered by the plaintiffs for the mis-doings
of the defendants.
(vi) A decree for the cost of the suit.
(vii) A decree for any other relief or reliefs.
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2. Case of the Plaintiffs/Appellants
i. The plaintiff no.1 is an old reputed firm engaged in the business
of coal analysis in Dhanbad and the other plaintiffs are its
partners. One offer came to the plaintiffs at Dhanbad in or about
2006 from St. Xavier Schools, Cuttack, Orissa that the
organization managing the said School had agreed to give
franchisee to plaintiff no.2, but to carry out the project, a
minimum investment of 50-60 lacs was required and at the
same time, a piece of land measuring not less 5 acres was also
required to set up the school. The plaintiff no. 1 had one such
land measuring 5.63 decimal in mouza Kurchi within
Govindpur PS situated on the outskirts of the city and it was
found to be ideally suited for the project of setting up St. Xavier
School at Dhanbad.
ii. The defendant no. 1 and 2 called upon plaintiff no. 2 and 3 in
the office of plaintiff no. 1 sometime in 2nd week of November,
2006 and represented to the plaintiff no. 2 and 3 that they were
keen on investing in the St Xaviers School Project and for that
purpose, they were prepared to invest as much money as was
required.
iii. It is the case of the plaintiffs that having been induced by the
representation of the defendants and having been in need of a
financially sound partner to implement the dream project, the
plaintiffs (except plaintiff no. 4 who was absent at that time)
permitted the defendants to join them as associates in the
project and then the negotiations were followed to settle the
terms. Following negotiation, it was agreed that the land would
be held as security against investment to be made by them.
However, such deal was made in absence of plaintiff no. 4 who
was one of the partners of plaintiff no.1 because he was out of
Dhanbad.
iv. Later on, agreement for sale dated 21.11.2006 was prepared
wherein the plaintiffs agreed to transfer the land in favour of the
defendants for a consideration of Rs.48,00,000/- and an
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additional sum of Rs.3,00,000/- to be paid after signing the
agreement and executed by the parties and the plaintiff no. 4
being absent did not sign that agreement. The concluding
paragraph of said agreement had reference of St. Xaviers
School wherefrom it would transpire that real tenor of the
agreement was to carry out the franchise project and not to sell
the land.
v. A sum of Rs.11,01,000/- was paid by the defendants to the
plaintiffs as advance consideration immediately after execution
of the agreement for sale dated 21.11.2006. Immediately
thereafter, the defendants served a legal notice dated
21.12.2006 upon the plaintiffs alleging fraud etc., and urging
the plaintiffs to refund the advance consideration of
Rs.11,01,000/- stating that "transaction failed" and also
demanded a sum of Rs.10,00,000/- as damages.
vi. As the allegations made in the aforementioned notice dated
21.12.2006 sent on behalf of the defendants was false, so a
suitable reply thereof was given by the plaintiffs through their
lawyer on 26.12.2006 whereby the plaintiffs claimed damages
of Rs.60,00,000/- from the defendants for backing out of St.
Xaviers School Project.
vii. As the defendants were found to be contemplating to implicate
the plaintiffs in false criminal cases, so the plaintiffs filed a
petition under Section 39 of Code of Criminal Procedure and
thereafter to resolve the disputes, meetings were held on
17.04.2007, 19.04.2007 and 24.04.2007 between plaintiffs and
defendants in presence of the Officer-in-Charge, Bank More
P.S. During those discussions, the plaintiffs agreed to refund
the entire consideration of Rs.11,01,000/- and out of the said
sum, the plaintiffs paid a sum of Rs.1,00,000/- to the defendants
in Bank More P.S. premises agreeing to settle the dispute by
means of an MoU, but later on the defendants declined to sign
MoU.
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viii. As the intention of the defendants was to squeeze money from
the plaintiffs, so the defendants lodged an FIR being Bank
More P.S. Case No.371/2007 dated 20.05.2007 under Sections
406, 420, 120-B of IPC notwithstanding the fact that the
plaintiffs had earlier agreed to refund the balance sum of
Rs.10,01,000/-. The defendants with a view to malign the
reputation of the plaintiffs got the aforementioned news of
institution of the criminal case published in local newspapers
Prabhat Khabar, Hindustan, Dainik Jagran and The Telegraph.
ix. The plaintiffs applied for anticipatory bail being ABP No.
500/2007 before learned Session Judge, Dhanbad and in course
of hearing of that anticipatory bail petition, the plaintiffs
through their lawyer offered to pay the balance sum of Rs.
10,01,000/- and even prepared a draft of the said sum to be
handed over to the defendants' lawyer and the lawyer of the
defendants too initially agreed to accept such refund subject to
the condition that the plaintiffs would also withdraw Complaint
Case (i.e. CP Case No. 815/2007 filed by plaintiff no. 2 against
the defendants). However, later on defendant no.1 & 2 declined
to accept refund of Rs.10,01,000/- and such conduct of the
defendants caused mental agony to the plaintiffs.
x. Thus, the defendants tarnished the image of the plaintiffs by
instituting a false criminal case, got the news of such case
published in local newspaper which damaged the reputation of
the plaintiffs and the plaintiffs have computed loss of reputation
at Rs.30,00,000/- and have also claimed Rs.10 lakhs on account
of mental agony.
3. Case of the Defendants/Respondents
a. The defendants filed written statement wherein they denied all
averments made in the plaint; denied that plaintiff no. 1 is a
reputed firm; denied the very existence of St. Xaviers School,
Cuttack stating that other reputed St. Xaviers Schools situated
at Bokaro and Kolkata denied having any connection with St.
Xaviers School, Cuttack; stated that not a chit of paper showing
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offer of franchise of St. Xaviers School was filed by the
plaintiffs.
b. The defendants stated that intention of the plaintiffs was to sell
the land at exorbitant price and for that purpose, they set up the
case of franchise through concocted story regarding franchise of
St. Xaviers School. The whole plan was to get the defendants to
invest considerable sum in the land using the ploy of St.
Xaviers School and plaintiffs suppressed the fact that the said
land was encumbered with a mortgage, though the plaintiffs
expressly stated in the said agreement that the land in question
was free from encumbrance.
c. Defendants denied having committed any act which could cause
mental agony or injury to the plaintiffs, rather it was asserted
that the plaintiffs acted in a manner which was prejudicial to the
interest of the defendants.
d. The story of franchise of St. Xaviers School was false and
created by the plaintiffs so as to project a case that on failure of
the agreement for sale dated 21.11.2006, the school project
failed entailing damage to the reputation of the plaintiffs.
However, no such damage to the reputation of the plaintiffs has
ever been caused.
4. The learned trial court initially framed the following issues for
consideration:
(i) Is the suit maintainable in its present form?
(ii) Is there any cause of action for the present suit?
(iii) Is the suit barred under the principles of estoppel,
waiver and acquiescence?
(iv) Is the suit barred under Contract Act?
(v) Is the suit barred under Specific Relief Act?
(vi) Is the suit property valued?
(vii) Whether the agreement dated 21-11-2006 is legally
enforceable against plaintiff?
(viii) Whether the plaintiff is entitled to damage of Rs.
60,00,000/- with pendente-lite interest @ 18%?
(ix) Whether the plaintiffs are entitled for an order of
injunction restraining the defendants therein from
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claiming any it or authority over agreement dated 21-
11-2006?
5. The records of the case reveal that certain photo copy of the
documents were filed before the court on behalf of the plaintiffs.
However, a petition dated 22.05.2018 was filed under Order VII Rule
14(3) of the Civil Procedure Code (in short 'CPC') along with the
petition under Section 74 of the Indian Evidence Act seeking leave to
file certain documents which were filed with a separate list.
6. The learned court recorded that the suit was pending for
evidence of plaintiffs and in the meantime the plaintiffs filed the
petition dated 22.05.2018 seeking permission to grant leave to file
original documents and the leave was allowed vide order dated
01.10.2018 subject to payment of Rs.200/- and the matter was
directed to be posted on 28.11.2018 for further step. The records of
the case reveal that the documents said to be filed vide the petition
dated 22.05.2018 were never exhibited by the plaintiffs at any stage.
However, on 11.01.2019 the matter was posted for evidence of the
defendants. On 05.02.2019 a petition was filed on behalf of the
defendants producing a list of documents which was disposed of vide
order dated 02.07.2019 wherein it was submitted that in the plaint and
the written statement there are reference of several cases including
criminal cases which culminated in special leave petition before the
Hon'ble Supreme Court and by virtue of order passed by Hon'ble
Supreme Court the criminal cases against each other were quashed
and it was asserted by the defendants that parties were directed to
withdraw the civil suits filed by them against each other, but there was
some confusion whether the order of the Hon'ble Supreme Court
relating to withdrawal of civil suits included the present suit i.e. Title
Suit No. 232 of 2007 as well. On the other hand, the plaintiffs
asserted at that stage that they were entitled to compensation because
they were harassed by the defendants and the defendants argued that
the order of the Hon'ble supreme Court would reveal that the
plaintiffs did not raise the issue of harassment etc. or their being
entitled to any compensation. The certified copies of the order passed
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by the Hon'ble Supreme Court in Criminal Appeal No. 1357-1359 of
2009, Special Leave Petition (Criminal) No. 6481-6482 of 2008 and
6775 of 2008 were produced and it was submitted that the orders
passed in C.P. No. 1495 of 2007, Cr.M.P No. 1588 of 2007 and
Cr.M.P No. 366 & 376 of 2008 were also annexed with the order
passed by the Hon'ble Supreme Court dated 23rd April, 2015 passed in
Criminal Appeal No. 1357-1358 of 2009 with Criminal Appeal No.
1359 of 2008. The petition of the defendants to file the aforesaid
documents was allowed vide order dated 02.07.2019 subject to
payment of cost of Rs.500/- and the matter was directed to be posted
on 23.07.2019 for further steps.
7. The case was adjourned from time to time and in the meantime,
there was Covid-19 situation and ultimately the evidence of the
defendants commenced. On 04.03.2022 DW-1 had filed examination-
in-chief on affidavit and the aforesaid documents were exhibited as
exhibit- A to G. The witness was cross examined through pleader
commissioner and his cross examination was placed on record.
Thereafter another witness D.W-2 was also examined and cross
examined.
8. The fact remains that although the plaintiffs filed numerous
documents vide the petition which was filed on 22.05.2018 under
Order VII Rule 14(3) of the CPC which was allowed, but thereafter,
no witness was examined on behalf of the plaintiffs to exhibit those
documents and consequently the plaintiffs had produced only 5
exhibits which have been recorded in the judgment passed by the
learned trial court which were all exhibited way back on 16.03.2018.
The plaintiffs had shown as many as 8 items in the list of documents
being filed along with the plaint but the plaintiffs exhibited only some
of the documents and neither the agreement dated 21.11.2006 was
exhibited nor the newspapers were exhibited in connection with which
the damages were claimed to the extent of Rs.60 lakhs (on account of
damages suffered by the plaintiffs by dint of failure of transaction on
the part of the defendants in setting up and running of St. Xavier
School on the schedule -A land, Rs. 30 lakhs (on account of damages
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caused to the fame, prestige, image, reputation and status of the
plaintiffs in public life and Rs.10 lakhs (on account of the mental
agony suffered by the plaintiffs for the mis-doings of the defendants).
9. After the order was passed by the Hon'ble Supreme Court in
connection with settlement of disputes/compromise, the learned trial
court took into consideration the developments which had taken place
during the pendency of the present suit and proceeded to reframe and
decide the issues in the present suit in the following manner:
"Before this court proceed to decide the issue 1/1 it is very
important hereto mention that this case travelled up to Hon'ble
Supreme Court of India and thereafter some subsequent event
took place i.e. orders were passed by Hon'ble Supreme Court
in Special Leave Petition Nos. 1357 & 1358 of 2009 whereby
the reliefs of declaration and injunction regarding agreement
for sale dated 21.11.2006 have become redundant as agreement
for sale dated 21.11.2006 is no longer enforceable in view of
the order passed in above mentioned SLPs. Before Hon'ble
Supreme Court, the parties to this suit arrived at a settlement to
bring an end to the criminal cases as well as civil cases filed by
them and pursuant to such settlement Hon'ble Supreme Court
passed an order on April 23, 2015 (Ext-G) to the following
effect: -
"Now the parties are agreeable that the criminal
cases by both the parties may be quashed and the
appellants will also withdraw the civil suit.
Respondent No. 2 will return the amount received
with 10% interest within four weeks. In view of
above agreement, the appeals stand disposed of.
The criminal cases between the parties will stand
closed and the suit filed by the appellants will stand
withdrawn."
10. Thereafter, the learned trial court framed the following issue:
"Whether the plaintiff is entitled to realize damages
from the defendants of Rs.60,00,000/- for failure of
transactions of sale and Rs.10,00,000/- for mental
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agony? or damages for the tarnishing the image of
plaintiff firm?"
11. The learned trial court considered and decided the aforesaid
reframed issues in paragraph 6 of its judgment as under:
"6. "Whether the plaintiff is entitled to realize damages
from the defendants of Rs.60,00,000/- for failure of
transactions of sale and Rs.10,00,000/- for mental agony?"
After the observation made by Hon'ble Supreme Court of
India, the above-mentioned issue is the only issue that
remains between the parties to be decided by this court.
Furthermore, the way this case has proceeded, after the
observation made be Hon'ble Supreme Court of India,
specially the arguments between the parties is that if the
plaintiff is entitled to realize damages from the defendants of
Rs.60,00,000/- for failure of transactions of sale and
Rs.10,00,000/- for mental agony and also for getting the
News regarding the FIR Published in the News Papers that
really tarnished the image of the plaintiff firm.
After the observation i.e. "Now the parties are
agreeable that the criminal cases by both the parties may
be quashed and the appellants will also withdraw the civil
suit. Respondent No. 2 will return the amount received with
10% interest within four weeks. In view of above
agreement, the appeals stand disposed of. The criminal
cases between the parties will stand closed and the suit led
by the appellants will stand withdrawn" made by the
Hon'ble Supreme Court of India. As apparent from the
observation above mentioned it is clear that both the parties
settled the matter in the Hon'ble Supreme Court of India and
plaintiff returned the money to the defendant with the 10% of
the interest. Now before this court to raise the issue, that as
the defendant backed out from the agreement and as such the
plaintiff suffered damages, is not in the spirit of the order of
the Hon'ble Supreme Court of India as the matter has
already been settled before the Hon'ble Supreme Court of
India and as such there is no question of suffering loss that
now to be compensated in the form of damages. And as such
there is no question of seeking damages after observation of
Hon'ble Supreme Court of India.
Now the other question to be decided before this
court is that whether the plaintiff is entitled for its images
being tarnished for the News regarding FIR against the
plaintiff being published in the News Papers; In order to
decide the issue, the plaintiff has not filed before this court
or got it exhibited any documents like News Paper cutting
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showing that the News regarding the lodging of FIR was
published in the News Paper. Of several documents
exhibited by plaintiff, there is nothing to show that News was
published in the News Paper. And furthermore, the oral
evidences produced by the plaintiff it is all focused on the
agreement between the parties and the defendant backing
out of such agreement. So, there is complete absence of any
documentary evidence on the record filed by the plaintiff
regarding the News published in the News Paper.
Furthermore, the case has already been settled between the
parties by Hon'ble Supreme Court of India. And as such this
issue is not decided in favour of the plaintiff. Further there is
no need to discuss and analyse the evidence on the record as
it would be futile as after the observation by Hon'ble
Supreme Court of India i.e. not applicable to decide the
present issue."
12. In spite of the aforesaid developments which had taken place
during the pendency of the suit, the plaintiffs choose to continue with
the case and before the learned trial court, the following materials
were placed on record on behalf of the parties: -
Oral evidences on behalf of the plaintiffs
Oral P.W. 1 Tarun Gupta
evidences P.W. 2 Asim Kumar Mitra
P.W. 3 Surendra Kumar Prasad
P.W. 4 Ram Narayan Vidur
P.W. 5 Prabhat Kumar Rai
On 21.08.2015 evidence on affidavit of one Suresh Singh was filed
but the presiding officer was on casual leave and the case was
adjourned and thereafter he did not appear in the proceedings.
Documentary evidences on behalf of the plaintiffs
Documentary Ext. 1 A notice dated 21-12-2006 sent on
Evidences behalf of the defendants to plaintiffs
Ext. 2 Reply notice dated 26-12-2006
sent by the plaintiffs
Ext. 3 Information petition under Section 39
Cr. P.C.
Ext. 4 The order sheets of Anticipatory Bail
Application filed on behalf of the
plaintiffs
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Ext. 5 The withdrawal petition of complaint
case no. 815/2007 and withdrawal
dated 23-08-2007
Oral evidences on behalf of the defendants
Oral D.W. 1 Lalit Kumar Agarwal
evidences D.W. 2 Sunny Katesaria
Documentary evidences on behalf of the defendants
Documentary Ext. A Curative or Clarificatory
evidences petition filed on behalf of
the defendants Lalit Kumar
Agarwal and others before
Hon'ble Supreme Court
Ext. B Counter affidavit filed on
behalf of the State in
connection with SLP no.
6481-6482 of 2008
Ext. C SLP filed on behalf of the
Lalit Kumar Agarwal and
others (Defendants herein)
seeking leave to file appeal
before Hon'ble Supreme
Court to challenge order
dated 14.07.2008 passed by
Hon'ble Jharkhand High
Court in Cr.M.P. No.
366/2008 and 376 of 2008.
Ext. D Counter affidavit filed by
Lalit Kumar Agarwal before
Hon'ble Supreme Court in
connection with SLP No.
6775 of 2008.
Ext. E & E/1 Order dated 04-02-2008 and
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order dated 05-02-2008
passed in CP Case No.
1495/2007 and in CP Case
No. 1807/2007 by JM,
Dhanbad taking cognizance
and directing issuance of
processes.
Ext. F & F/1 Order dated 07.07.2008
passed in Cr.MP Case No.
1588/2007 and order dated
07.07.2008 passed in
with 378 of 2008 by
Hon'ble High Court of
Jharkhand at Ranchi
dismissing the quashing.
Ext. G Order dated 23.04.2015
passed by Hon'ble Supreme
Court in Criminal Appeal
No. 1357-1358 of 2008
whereby Hon'ble Court
directed that criminal cases
by both the parties may be
quashed and the appellants
will also withdraw the civil
suit.
13. However, the learned trial court was of the view that there was
no need to discuss and analyse the evidences on the record and it
would be a futile exercise after the observation by Hon'ble Supreme
Court of India during the pendency of the case. The learned trial court
decided both the issues relating to claim of damages of Rs.60 lakhs
and Rs.10 lakhs against the plaintiffs and dismissed the suit on
contest.
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Arguments on behalf of the Appellants
14. Learned counsel for the appellants submitted that the learned
Trial Court has not considered the materials on record on merits and
therefore the case is fit to be remanded for fresh consideration. He
further submitted that the suit has been dismissed primarily on the
ground that an order was passed by the Hon'ble Supreme Court which
was arising out of criminal case instituted between the parties arising
out of the same transaction and in the order passed by the Hon'ble
Supreme Court (Exhibit-G), it was observed that the appellants would
withdraw their civil suit and the matter ended in compromise. The
learned counsel submitted that the defendants herein had filed a
petition for modification before the Hon'ble Supreme Court seeking
modification of Exhibit-G and the petition seeking modification was
was Exhibit-A. A prayer was made to modify the order dated
23.04.2015 passed in Criminal Appeal No.1357-1358/2009 so as to
undo the prejudice that would be caused to defendants in this case
Lalit Kumar Agarwal and others, if Tarun Gupta, plaintiff in this case,
does not withdraw the present Title Suit No. 233/2007 in terms of
order dated 23.04.2015.
15. The learned counsel submitted that the prayer for modification
was dismissed and therefore the prayer of the present defendants
before the Hon'ble Supreme Court with regard to the consequence of
not withdrawing the Title Suit No. 233 of 2007 was also dismissed. In
such circumstances, there was no occasion to withdraw the Title Suit
No.233 of 2007. The learned counsel submitted that Exhibit-A i.e.
petition seeking modification of the order dated 23.04.2015 and
dismissal of the prayer for modification by the Hon'ble Supreme
Court, has not been properly considered by the learned Trial Court
and therefore the impugned judgment is perverse. He further
submitted that the learned Trial Court ought to have entered into the
merits of the case to award damages.
16. The learned counsel for the appellants further submitted that the
learned trial court has wrongly recorded that the newspaper report
regarding the FIR lodged against the plaintiffs which was published in
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the newspapers were not produced by the plaintiffs. He submitted that
the plaint itself reveals that newspaper cuttings were filed along with
the plaint and the details regarding newspaper publication has been
mentioned in Paragraph-16 of the plaint which was published in the
daily newspaper in the month of May/June/August, 2007.
17. However, upon a query of this Court, the learned counsel fairly
submitted that though along with the list of documents which was
filed before the learned trial court, it was mentioned as Item No.8
"relevant portion of newspaper publication", but the newspaper
publications were not exhibited. The learned counsel submitted that
the finding of the learned Trial Court that the newspaper publication
was not filed is incorrect, though they were not exhibited. The learned
counsel submitted that the entire case was based upon the newspaper
publication which related to the criminal case filed against the
plaintiffs. The learned counsel submitted that on account of such
newspaper publication, the appellants have suffered damages and the
appellants were entitled to damages.
18. The learned counsel submitted upon query of this Court that so
far as criminal cases are concerned, the same have been quashed by
virtue of compromise made before the Hon'ble Supreme Court and
upon further query, he also submitted that suit filed by the defendants
of the present case has also been withdrawn by the defendants as per
the compromise.
19. The learned counsel submitted that so far as present suit is
concerned, the same was not withdrawn as the prayer for modification
of the order passed by the Hon'ble Supreme Court was itself
dismissed. The learned counsel submitted that the order dated
23.04.2015 passed by the Hon'ble Supreme Court as well as the order
refusing to modify the order dated 23.04.2015 have not been properly
considered by the learned Trial Court and the learned Trial Court has
erred in dismissing the suit without considering the materials on
record, particularly, the published newspaper extract which was said
to have been filed along with the plaint, though not exhibited.
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Arguments on behalf of the Respondents
20. The learned counsel appearing on behalf of the respondents
opposed the prayer and submitted that the parties have acted pursuant
to the order passed by the Hon'ble Supreme Court. Both plaintiffs and
defendants were the appellants before the Hon'ble Supreme Court and
there was clear direction for withdrawal of the suit of the respective
parties. He submitted that the plaintiff no.1 is the partnership firm and
other plaintiffs are the partners of the partnership firm. The learned
counsel also submitted that dismissal of the prayer for modification
has no bearing in the matter and the learned court has rightly read the
order of the Hon'ble Supreme Court as it is. He submitted that since
the plaintiffs did not withdraw the suit as per their undertaking before
the Hon'ble Supreme Court, therefore there was no occasion for the
learned trial court to award damages to the appellants apart from the
fact that the matter was already settled before the Hon'ble Supreme
Court. The learned counsel has submitted that the alleged newspaper
publication is of the year 2007 and the order of the Hon'ble Supreme
Court was passed in the year 2015. The suit for damages was filed in
the year 2007 itself and the criminal cases ended in compromise
between the parties and the defendants have also withdrawn the suit
which was filed for specific performance of contract.
21. The points for determination in this case are as under: -
A. Whether any of one or the other reliefs prayed for in the
suit survives on account of the orders passed by the
Hon'ble Supreme Court during the pendency of the suit?
B. Whether the plaintiffs are entitled to a sum of Rs. 60
lakhs as per prayer no. (iii) in the plaint with respect to
damages alleged to have been suffered on account of
transaction on the part of the defendants in the matter of
setting up and running of St. Xaviers School on the
schedule -A land?
C. Whether the plaintiffs are entitled to a sum of Rs. 30
lakhs as per prayer no. (iv) in the plaint with respect to
damages alleged to have been caused by the defendants
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to the fame, prestige, image, reputation and status of the
plaintiffs in public life?
D. Whether the plaintiffs are entitled to a sum of Rs. 10 lacs
as per prayer no. (v) in the plaint on account of mental
agony suffered by the plaintiffs for the alleged mis-doings
of the defendants?
22. In order to decide the aforesaid points of determination, it
would be relevant to examine the various order of the Hon'ble
Supreme Court and the consequences flowing therefrom.
23. The order dated 23.04.2015 passed by the Hon'ble Supreme
Court in Criminal Appeal Nos. 1357-1359 of 2009 is quoted as under:
"CRIMINAL APPEAL NO(s). 1357-1358 OF 2009
LALIT KUMAR AGARWAL & ORS. Appellant (s)
VERSUS
STATE OF JHARKHAND & ANR. Respondent(s)
WITH
CRIMINAL APPEAL NO(s). 1359 OF 2009
ORDER
Criminal Appeal No(s). 1357-1358 of 2009
The appellants and respondent no. 2 entered into an
agreement under which the appellants were to purchase
property belonging to respondent no. 2 on certain terms.
However, the deal did not materialise and the appellants
had already paid a sum of Rs. 11,01,000/- as advance. The
parties have filed criminal cases against each other.
Now, the parties are agreeable that the criminal
cases by both the parties may be quashed and the
appellants will also withdraw the civil suit. Respondent no.
2 will return the amount received with 10% interest within
four weeks. In view of the above agreement, the appeals
stand disposed of. The criminal cases between the parties
will stand closed and the suit filed by the appellants will
stand withdrawn.
Criminal Appeal No(s). 1359 of 2009
In view of the order passed in Criminal Appeal
No(s). 1357-1358 of 2009, this appeal is disposed of as no
further order is necessary."
24. The application seeking clarification/modification of the order
dated 23.04.2015 passed in Criminal Appeal Nos. 1357-1359 of 2009
(exhibit-G) was dismissed on 10.07.2017 which has also been brought
on record. Thereafter, the G.R. Case No. 1524 of 2007 was also
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closed vide order dated 28.11.2016. The Title Suit No. 337 of 2009
filed by Lalit Kumar Agrawal against the plaintiffs was also
withdrawn vide order dated 28.08.2015.
25. This Court finds that after the order passed by the Hon'ble
Supreme Court dated 23.04.2015 which was arising out of a
compromise between the parties relating to the agreement involved in
the present case and also the criminal case arising out of G.R. Case
No. 1524 of 2007 (State Vs. Tarun Gupta and others); the Title Suit
No. 337 of 2009 filed by Lalit Kumar Agarwal (defendant no. 1
herein) was withdrawn vide order dated 28.08.2015 and the criminal
case being G.R. Case No. 1524 of 2007 (State Vs. Tarun Gupta and
others) was also closed vide order dated 28.11.2016.
26. The aforesaid order passed by the Hon'ble Supreme Court dated
23.04.2015 and the order dated 28.11.2016 passed in G.R. Case No.
1524 of 2007 as well as the order dated 28.08.2015 passed in Title
Suit No. 337 of 2009 were brought on record by the defendants before
the learned trial court and were duly exhibited as mentioned above.
27. It further appears that the order dated 23.04.2015 dealing with
mutual undertaking was passed in Criminal Appeal No. 1357-1358 of
2009 in which Lalit Kumar Agrawal and others were the appellants
before the Hon'ble Supreme Court and Lalit Kumar Agrawal and
others had undertaken to withdraw the civil suit which they duly
withdrew vide order dated 28.08.2015 passed in Title Suit No. 337 of
2009, but on the face of the order, nothing has been mentioned that
the plaintiffs of the present case would also withdraw their suit which
is the present one. However, the perusal of the order dated 23.04.2015
and the records of this case reveal that the agreement which was
referred to in the order dated 23.04.2015 in connection with which
Lalit Kumar Agrawal and others had paid a sum of Rs. 11,01,000/- as
advance ended in a compromise whereby the criminal cases filed by
both the parties was agreed to be quashed and Lalit Kumar Agrawal
and others agreed to withdraw the civil suit filed by them in
connection with the same agreement for sale dated 21.11.2006 which
is involved in this case.
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Regarding relief no. (i) and (ii) in the suit
28. The plaintiffs in the present case are seeking a relief of
declaration that the agreement for sale dated 21.11.2006 executed by
plaintiff nos. 1 to 3 and defendant nos. 1 and 2 is an incomplete,
inconclusive and inchoate agreement and not an enforceable one and
further relief has been prayed for seeking injunction against the
defendants in connection with the agreement dated 21.11.2006. These
two reliefs which relate to the agreement for sale dated 21.11.2006
have practically become infructuous in view of the agreement
recorded by the Hon'ble Supreme Court in the order dated 23.04.2015
and the amount advanced in connection with the agreement for sale
dated 21.11.2006 which was to the extent of Rs. 11,01,000/- was
directed to be refunded with 10% interest within four weeks. By virtue
of the order of the Hon'ble Supreme Court, the agreement dated
21.11.2006 has been rendered infructuous and consequently, the
aforesaid two reliefs relating to the agreement dated 21.11.2006 do
not survive anymore.
29. The point of determination no. (A) is decided by holding that
reliefs no. (i) and (ii) as prayed for in the suit do not survive
anymore. So far as other reliefs are concerned, they are to be
examined taking into consideration the materials placed on record
including the developments which have taken place after the order
passed by the Hon'ble Supreme Court and also follow-up actions
taken by the parties.
30. Plaintiffs' oral evidence
I. PW-1 Tarun Gupta is plaintiff No.2 and he is partner of M/s
Coal Inspection service. He claims to be the owner of the suit
property and stated that considering image of plaintiff no.1, an
offer was made to it in the year 2006 by St. Xavier's School to
open a Branch at Dhanbad, which was accepted under franchise
of St. Xavier's School, Cuttack on the same property. A
minimum amount of Rupees 50-60 lakhs was required to be
invested, for which the plaintiffs invited offers from the parties
for project on joint venture basis. The defendant No.1 & 2
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came to know about the proposed project and called upon
plaintiff No.2 & 3 in the office of plaintiff No.1 in the 2nd week
of November 2006 and represented to the plaintiff No.2 & 3
that the defendant No.1 & 2 were prepared to invest money in
the school project. However, the defendant No.1 & 2 insisted
that unless the suit property was transferred in their favour, it
was not possible to invest such a huge amount. This witness
further deposed that it was agreed that the suit property would
be kept as security by defendants against investment in the
school, but no such agreement for sale was contemplated by the
plaintiffs. This led to framing of an agreement dated
21.11.2006, which was prepared by the defendants and the said
agreement purported to transfer the suit property in favour of
the defendants on payment of total consideration amount of
Rs.48 lakhs plus Rs.3 lakhs was to be paid separately after
signing agreement. The agreement was signed by plaintiff No.2
& 3 and defendant No.1 & 2 and defendant No.1 & 2 suo moto
made payment of Rs. 11,01,000/- as advance on ad hoc basis.
However, defendant No. 3 and 4 did not sign the agreement.
The signature of Plaintiff No. 4 was also not done as he was not
available on that day. It was stated that the agreement dated
21.11.2006 remains incomplete, inchoate and inoperative. P.W.
1 further stated that the defendants served notice upon the
plaintiffs alleging fraud upon Plaintiff No.2 & 3, stating that not
only advanced amount of Rs.11,01,000/- was paid, but also a
sum of Rs.10.0 lakhs as damages was claimed on account of
loss suffered by them as they were unable to sell the suit
property to a third party at higher price when the agreement
remained incomplete and inoperative.
II. A reply was sent by the plaintiffs refuting the allegations with
forfeiture of the advanced amount of Rs.11,01,000/- and
making a claim of Rs.60.0 lakhs for backing out of the St.
Xavier's school project. It was also asserted by this witness that
ultimately the defendant No.1 & 2 in a mala fide manner with
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evil design lodged FIR with Bankmore P.S. numbered as
Bankmore P.S. Case No.371 of 07 which was registered under
Sections 406, 420 and 120B of IPC. The defendants maligned
the image and reputation of the plaintiffs by getting the news of
institution of criminal case published in local newspaper on
various dates.
III. PW 1 further stated that however, the anticipatory bail was
granted and the plaintiffs agreed to refund the total advanced
amount of Rs. 11,01,000/- and the Criminal Case No.815 of
2007 filed by the plaintiffs against the defendants on
25.05.2007 was withdrawn on the demand of the defendants. It
was further stated that the demand draft of Rs. 11,01,000/- in
favour of the defendants was submitted in the Court of learned
Sessions Judge on 01.09.2007 in terms of compromise /
amicable settlement. However, the defendant No.1 and his
nephew backed out and stated that they were not ready to
compromise. It is stated that this caused great mental agony
leading to injury to image and reputation and health of the
plaintiffs.
IV. It was further asserted by PW 1 that the defendants committed
fraud not only upon the plaintiffs but also upon the Court. It
was asserted that the defendant No.1 and 2 have tarnished the
image of the plaintiffs by initiating a false criminal case and
also through publication in local newspaper to ensure that social
and commercial image and reputation of the plaintiffs before
the public in general are tarnished badly to create a doubt in the
mind of the people and the society and consequently the
plaintiffs were entitled for loss and damages.
V. This witness has been cross-examined and during cross-
examination, he has referred to the various negotiations in
connection with the establishment of the school. He has also
stated that he is not aware of the address of St. Xavier's School,
Cuttack and that apart from the E-mail, he has no other letter.
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VI. PW2 is the Chartered Accountant of the plaintiff No.1-
Company and he has been working for the Company for the last
28 years. He has supported the case in connection with the
negotiation with respect to the property and stated that the
defendant No. 1 & 2 on 21.11.2006 had handed over an amount
of Rs.11,01,000/- to the plaintiff No. 2 & 3 and he came to
know about it on the next day i.e. on 22.11.2006 and he made
an entry in his books of account. He has also stated that a notice
was sent by the defendants on 22.12.2006 stating that the
agreement, which remained incomplete, was required to be
cancelled and they claimed refund of Rs. 11,01,000/- and also
claimed compensation of Rs.10,00,000/-. Although the
defendant without purchasing the property had talked about
selling the property and that the property was mortgaged with
Bank, this witness stated that such facts were absolutely
incorrect. He has stated that no loan was taken against the
property. This witness has also stated that the defendant No.1
had lodged an FIR No.371 of 2007 on 20.05.2007 and on
21.05.2007, they got published in the newspaper alleging that
the plaintiffs have committed fraud, due to which the plaintiffs
suffered mental, social and commercial loss and therefore the
suit was filed for damages to the extent of Rupees 01 crore 01
lakh 01 thousand.
VII. This witness (P.W. 2) has also been cross-examined and during
the cross-examination, he has stated that the plaintiff company
has taken OD facility from Vijaya Bank, however, he could not
specify the amount of OD and he stated that the document in
connection with the subject property was kept in Vijaya Bank
just as a support. He further stated that it was not correct to say
that the First Information Report which was filed by defendant
No. 1 on 20.05.2007 against the plaintiffs was correct and it
was also not correct to say that the plaintiffs did not suffer
mental loss on account of filing of FIR.
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VIII. PW-3 is an employee of the plaintiff No.1 who is in-charge of a
Branch at Dhanbad. He has supported the case of the plaintiffs
by stating that he had seen the documents relating to St.
Xavier's school, Cuttack and the photocopy of the landed
property at Govindpur being handed over to Lalit Kumar
Agarwal and Ajay Kumar Agarwal and it was also stated that
the original document of the land was with Vijaya Bank by way
of collateral security and not by way of mortgage. He has stated
that the defendants had lodged false FIR, which was published
in the newspaper in a wrong manner, due to which, the
plaintiffs suffered losses.
IX. This witness P.W. 3 has also been cross-examined. He has
reiterated that the documents relating to the Company is kept in
the Bank as collateral. The FIR was lodged by the PW-1 on
20.05.2007 on Tarun Gupta, Prabhat Kumar Ram and Pavit
Kumar Ghosh and details of the FIR were mentioned in the
newspaper on 21.05.2007. He has also stated in his cross-
examination that the defendant had filed a Title Suit No. 337 of
2009 against the plaintiffs.
X. P.W. No.4 also claims to know both the parties and he claimed
that he knows the plaintiffs for the last twenty years. He claims
to be an independent journalist and claims to closely know
plaintiff No.2. He has stated that the plaintiff No.2 has a very
high reputation in the society and is member of various social
and other organizations in the district of Dhanbad and is
involved in various social work. He has stated that a news was
published in the local newspaper against Tarun Gupta (Plaintiff
No.2) and his reputation was harmed and he in order to know
the truth, had shown the order of anticipatory bail, in which,
nothing was mentioned regarding disrespect towards Court nor
anything was mentioned regarding any fraud and Tarun Gupta
had told him that the defendants have completely destroyed his
reputation by making false allegation. It was stated by this
witness that false allegation was made against the plaintiffs in
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the FIR, due to which, the plaintiffs suffered losses in terms of
reputation. It was also stated that in the newspaper, Lalit Kumar
Agrawal and Ajay Kumar Agrawal had used the term 'Natwar
Lal' against the plaintiffs and cooked up false allegations
causing irreparable loss and injury to the plaintiffs. He stated
that he had read the newspapers. This witness has also been
cross-examined and he has not been able to say as to how much
loss was suffered by the plaintiffs.
XI. PW-5 is the plaintiff No.3 who claims to be a partner in
plaintiff no. 1 - firm, who has stated that PW-1 has acquired
goodwill in connection with work and in order to diversify their
business, they started to open St. Xavier's school and were
talking with St. Xavier's School, Cuttack to get franchise,
which was negotiated in 2006 and was to be opened in
Dhanbad. In the project, defendant No.1 and 2 were negotiated
and they wanted that the disputed property be transferred in
their name, otherwise on what basis they would invest in the
project and ultimately it was decided that the plaintiffs would
give the land by way of security, but will not transfer the same
to the defendants. Subsequently, an agreement dated
21.11.2006 was prepared, in which it was mentioned that the
plaintiff would transfer the land to the defendant upon a
consideration amount of Rs.48,00,000/- and later on plaintiff
would enter into agreement with St. Xavier's and after the
execution of the agreement, defendants would further pay
Rs.3,00,000/- to the plaintiffs. It was also mentioned in the
agreement that the plaintiff No.2 would be made convener of
the school for the lifetime and in the agreement, it was also
mentioned about commission from school fees and profit share.
He stated that on 21.12.2006 defendant No.1 & 2 along with
their nephew appeared in the office of plaintiff No.1 and gave
Rs. 11,01,000/- to the plaintiff and an entry was made in the
records of the plaintiff No.1. The agreement was signed by
plaintiff No. 2 & 3 and since the plaintiff No. 4 was not
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available, his signature was not made. From the side of the
defendants, the defendant No.1 & 2 had signed, but the
defendant No. 3 & 4 had not put their signatures and
consequently the agreement was itself incomplete.
XII. A notice regarding cancellation of the agreement was issued by
the advocate of the defendant, which was dated 21.12.2006 and
the plaintiffs were asked to refund an amount of Rs. 11,01,000/-
and damages of Rs.10,000,00/- was also demanded. The notice
was replied vide reply dated 26.12.2006 and in anticipation of
ill intention of defendants, a miscellaneous case was instituted
in the Court of Chief Judicial Magistrate which was numbered
as 908 of 2007. He has also submitted that on various dates, the
plaintiffs and the defendants appeared before the officer in-
charge of the police station and meeting was conducted and it
was ultimately decided that plaintiff No.2 & 3 would return Rs.
11,01,000/- and on 25.04.2007, plaintiff's deposited
Rs.1,00,000/- as advance before the Officer In-Charge of the
police station in presence of one employee of the plaintiff no. 1
namely Surendra Kumar Prasad. The rest amount was to be
paid so that the matter could be compromised. However, the
defendant No.1 & 2 in a wrong manner, filed FIR which was
numbered as Bank More P.S. Case No. 371 of 2007 and
purposely published in the newspaper on 21.05.2007 alleging
fraud against the plaintiffs, which caused them mental loss and
injury to reputation.
XIII. Ultimately, the plaintiffs moved for anticipatory bail and before
the Court, the plaintiffs stated that they were ready to pay the
entire money. It was also stated that the case instituted by
plaintiffs would be withdrawn and the entire money would be
paid and consequently the plaintiffs withdrew the C.P. Case
numbered as C.P. Case No.815 of 2007 and produced a draft of
Rs. 11,01,000/- before the Court, but the defendants refused to
enter into the compromise and refused to take the draft of Rs.
11,01,000/-. This witness has also stated that ultimately the
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matter went up to the Hon'ble Supreme Court, in which the
G.R. Case No. 1524 of 2007 and Title Suit No.337 of 2009
were disposed of and the cases instituted by plaintiff namely
C.P. Case No. 1495 of 2007 and C.P. Case No. 1807 of 2007
were also disposed. As per the order of the Hon'ble Supreme
Court, the plaintiffs were to refund an amount of Rs.
11,01,000/- with interest @ 10%, total being Rs.20,33,381/-,
which was duly paid. It was also asserted that the defendants
moved the Hon'ble Supreme Court in connection with Civil
Suit No. 233 of 2007, which was dismissed and it is this Suit,
which is the present Suit. This witness has stated that the Suit
was filed for damages as the defendant No. 1 & 2 had caused
harassment and mental trauma by filing FIR and harming their
goodwill and reputation in the society and purposely got it
published in local newspaper on 21.05.2007, which was a false
report. It was also stated that because of ill intension of the
defendants, the plaintiffs could not start the franchise of the
school, due to which they suffered loss of Rs.60,00,000/-. This
witness further stated that for Loss of reputation etc. the
plaintiffs have claimed Rs.30,00,000/- and further the plaintiffs
have claimed an amount of Rs. 10,00,000/- owing to the mental
agony caused to them.
XIV. This witness (P.W. 5) has also been cross-examined and he has
stated that the land in connection with which the agreement was
done, was not mortgaged and in the agreement dated
21.11.2006, it was written that an amount of Rs. 11,01,000/-
was paid and remaining was to be paid. He has also stated that
the defendants had filed case against the plaintiffs being
Bankmore P.S. Case No.371 of 2007 and the plaintiffs had also
filed prior case against the defendants in C.P. Case No. 815 of
2007 and then C.P. Case No. 495 of 2007 and C.P. Case No.
1807 of 2007. He has stated that they had filed the C.P. Case
prior to lodging of FIR by the defendants.
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31. Defendants' oral evidence
A. So far as D.W. 1 is concerned, He is Lalit Kumar Agarwal -
the defendant no. 1. He has stated that with respect to
Schedule-A property, an agreement was entered into between
the plaintiffs and the defendants on 21.11.2006 and as per the
agreement, the plaintiffs had agreed to give franchise of St.
Xaviers, Cuttack to the defendants but the plaintiffs did not do
so. It was stated that prior to the agreement, the plaintiffs had
mortgaged the property in Vijaya Bank and committed fraud
due to which the defendants suffered huge losses. He further
stated that with respect to the same property, the plaintiffs had
entered into an agreement for sale with Dr. Karan. It has been
alleged by D.W. 1 that the plaintiffs have committed fraud in
the name of giving franchise of St. Xaviers School to the
defendants. The plaintiffs have not suffered any loss or
damage nor they have suffered any mental and physical agony.
In paragraph 10 of his examination-in-chief, D.W. 1 has
referred to the order passed by the Hon'ble Supreme Court
pursuant to which the plaintiffs returned the advance money
with 10% interest to the defendants and the Hon'ble Supreme
Court had asked both the parties to withdraw the civil suits.
B. It was further asserted by D.W. 1 that the defendants have
withdrawn their civil suits but the plaintiffs have not done so
and therefore, they have violated the orders of the Hon'ble
Supreme Court. Various documents relating to the
proceedings before the Hon'ble Supreme Court and subsequent
orders were exhibited whose list has already been mentioned.
C. This witness (D.W-1) has been cross-examined and he has
stated that he has no idea that the plaintiffs are very popular
persons in Dhanbad and that he had not done any investigation
with respect to the property and that the value of the property
was around Rs. 40 lakhs. He has stated that the transactions
were negotiated and the rate of the land was also negotiated
and negotiations were also done in connection with the
franchise of the school. He has stated in paragraph 37 that he
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had filed an application before the court that in view of the
order passed by the Hon'ble Supreme Court, the suit cannot
proceed, but the same was rejected by the Dhanbad court and
thereafter, he had filed a petition before the Hon'ble Supreme
Court and the said petition was also rejected. In his further
cross-examination, D.W. 1 has stated that he was fighting the
case on behalf of all the 4 defendants and that he was not
aware that out of the 4 defendants, two had not filed their
written statement. He has further stated that whatever
statement he has made in connection with Dr. Karan, is on the
basis of whatever he has heard. He has further stated that he
had taken loan in the year 2000 or 2001 and apart from that, he
had not taken any loan and that he has not availed the
overdraft facility from any bank. He is not aware that in the
bank the loan facility and OD facility are separate. In his
further cross-examination, he has stated that he has never been
to St. Xaviers school and he could not say as to whether the
fact about St. Xaviers school was published in the newspaper
or not. He has further stated that the newspaper persons did
not ever talk to him nor they took any information from him
nor he had given any information to them. He has stated that
he had signed the agreement after reading it and he has also
denied that he had got the news published in the newspaper to
malign the image of the plaintiffs. He has stated that he
himself had filed First Information Report in Bankmore Police
Station and the case regarding fraud was settled by the order
of the Hon'ble Supreme Court by which direction was issued
to the plaintiffs to return the money with interest.
D. This witness (D.W-1) has further stated that after the judgment
of the Hon'ble Supreme Court the evidence on affidavit was
filed wherein, he had mentioned about the allegation of fraud.
He has further stated that after the First Information Report, no
journalist had taken his interview and that he had withdrawn
the civil suit pursuant to the order of the Hon'ble Supreme
Court. He has also denied the suggestion that the defendants
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wanted to take the property from plaintiffs and sell it to 3 rd
party.
E. Another witness on behalf of the defendants i.e. D.W. 2
namely, Sunny Katesaria was examined who is son of
defendant no. 1 - Lalit Kumar Agarwal. D.W. 2 has also
supported the case of the defendants by stating that the
agreement was entered into on 21.11.2006 and as per the
agreement, the plaintiffs were to give franchise of the St.
Xaviers School but the plaintiffs did not do so and that they
had also entered into an agreement of sale with Dr. Karan with
respect to the same property. He also stated that the plaintiffs
had also mortgaged the property to Vijaya Bank prior to the
agreement. He has stated that the defendants suffered on
account of fraud committed by the plaintiffs and that the
plaintiffs did not suffer any loss or damage nor they suffered
any mental or physical agony. He has also stated that the
plaintiff -company and the defendants had been to Hon'ble
Supreme Court and according to the order passed by the
Hon'ble Supreme Court, the plaintiff- company returned the
advance money given by the defendants with interest @ 10%
and then both the parties were directed to withdraw the civil
suit, but the plaintiff- company did not do so, although the
defendants had withdrawn their suit. It was asserted that the
plaintiffs have violated the order of the Hon'ble Supreme
Court.
F. This witness (D.W-2) has also been cross-examined and in his
cross-examination, he has stated that he is not a party to the
suit and that the defendants had paid money to the plaintiffs in
lieu of the agreement and later on, the defendants came to
know that the property is already mortgaged with the bank and
there was an agreement with a 3rd party also. Though the
agreement was not prepared in his presence, but he had seen a
copy of the agreement. He has stated that his father, mother,
uncle and aunt are the defendants in the suit. He could not
recollect as to who all the persons who had signed on the
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agreement. He has stated that initially there was a police case
which he did not remember and has also stated that before the
Hon'ble Supreme Court both the parties had undertaken to
withdraw their civil suits. He has stated that at the time of the
negotiation between the parties, he was a minor. He has
further stated that his father had paid Rs. 11 lakhs in lieu of
the agreement and that the plaintiffs had applied for
anticipatory bail. He could not recollect that before the District
Judge, it was agreed that the plaintiffs would refund Rs. 11
lakhs to the defendant no. 1 and that the defendant had agreed
to take back the amount and he did not know that the
defendant no. 1 had subsequently refused to take the amount
of Rs. 11 lakhs. This witness has completely denied about the
newspaper publication in connection with the dealing between
the parties. He has further stated that he has read the
agreement in which there was a clause regarding commission,
but he could not recollect the percentage of commission. He
has also stated that the suit property was mortgaged with
Vijaya Bank and he had seen those documents in the file at
home. He has further stated that if the plaintiffs would not
have committed fraud and would not have taken advance
money in lieu of the agreement, the case would not have
proceeded. He has stated that at the relevant point of time, he
was minor but he was aware of the order passed by the
Hon'ble Supreme Court. He has denied that the plaintiffs have
suffered mental and physical agony on account of pendency of
the case and have suffered losses pursuant thereto. He has also
stated that if the school had been opened, both the plaintiffs
and the defendants would have been benefited. This witness
had no idea that the plaintiffs had filed the case for recovery of
damages.
Point of determination no. (B)
32. So far as the relief relating to prayer made in prayer no. (iii) of
the plaint is concerned, the plaintiffs are seeking damages of Rs. 60
lakhs with pendente lite interest @ 18% against the defendants on
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account of damages suffered by the plaintiffs due to failure of
transaction on the part of the defendants in setting up and running of
St. Xaviers School on the schedule-A property. This Court finds that
the transaction which was entered into between the plaintiffs and the
defendants was arising out of so-called agreement of sale dated
21.11.2006 and the monetary transaction arising out of the said
agreement whereby amount was paid by the defendants to the
plaintiffs has already been refunded to the defendants with interest by
virtue of the order passed by the Hon'ble Supreme Court as is
apparent from the oral evidence of both the plaintiffs. As discussed
above, while determining the point of determination no. (A), the
agreement as such does not survive any more. The fact remains that
the so-called agreement of sale dated 21.11.2006 has not been
exhibited by the parties although it is evident from the oral evidences
that the agreement of sale was entered into by both the parties and a
reference of the agreement was also made in the order passed by the
Hon'ble Supreme Court. In the absence of the so-called agreement of
sale dated 21.11.2006 being exhibited , the terms and conditions of the
agreement is neither evident from the oral evidences nor from the
documentary evidences placed on record except that it was an
agreement of sale of immoveable property between the plaintiffs and
defendants and the defendants had paid Rs.11,01,000/- as advance and
on account of the orders passed by the Hon'ble Supreme Court the
money has been refunded to the plaintiffs and the suit for specific
performance of the agreement of sale has been withdrawn by the
defendants.
33. This court further finds that there is ample oral evidence on
record that the property involved in the so-called agreement of sale
dated 21.11.2006 was kept as security in Vijaya Bank and therefore it
cannot be said that the property was free from all encumbrance. It has
also come during evidence that the property having been kept as
security in Vijaya Bank came to light to the defendants after the
parties entered into so-called agreement of sale dated 21.11.2006.
Thus, the fact that the property was kept as security in Vijaya Bank
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was not disclosed by the plaintiffs to the defendants prior to entering
into the so-called agreement of sale dated 21.11.2006. It was
primarily because of this reason that criminal case was filed by the
defendants and FIR was instituted. As per the evidence of the
plaintiffs, attempt was made in the police station also to settle the
matter and the plaintiffs had also deposited certain amount for
settlement but the defendants ultimately backed out from the proposed
settlement. The evidence reveal that it was this attempt of settlement
which ultimately materialised before the Hon'ble Supreme Court
where the entire amount paid by the defendants to the plaintiffs in
connection with agreement of sale dated 21.11.2006 was directed to
be refunded to the defendants with interest and the criminal cases
filed by the parties were also to be settled /withdrawn/quashed and
the defendants were also required to withdraw their civil suit which as
per the records of this case was relating to specific performance of the
agreement of sale dated 21.11.2006 as the consideration amount with
interest was directed to be refunded and consequently the agreement
of sale did not survive any more.
34. This Court finds that the entire controversy arose when the
defendants found that the property was already kept as security in
Vijaya Bank which was never disclosed to the defendants by the
plaintiffs. This Court finds that there has been suppression of material
facts by the plaintiffs while entering into agreement of sale with the
defendants as the aforesaid fact was not disclosed to the defendants.
This Court is of the considered view that the plaintiffs cannot take
advantage of their own conduct and claim damages from the
defendants on account of damages suffered by the plaintiffs due to
failure of transaction on the part of the defendants in setting up and
running of St. Xaviers School on the schedule-A property (the
property involved in so-called agreement of sale dated 21.11.2006).
35. Otherwise also, the plaintiffs are not entitled to damages due to
alleged failure of transaction on the part of the defendants in setting
up and running of St. Xaviers School on the schedule-A property in
view of the fact that except the statement that the plaintiffs had
2025:JHHC:22144
suffered loss to the extent of Rs.60 lakhs on account of damages
suffered by the plaintiffs due to failure of transaction on the part of the
defendants in setting up and running of St. Xaviers School on the
schedule-A property, no further evidence has been placed on record to
substantiate such a claim; even the proposal from the St. Xaviers
School, Cuttack to set up the franchise and its terms and conditions
have also not been brought on record and even the so-called
agreement of sale dated 21.11.2006 has not been exhibited to being on
record the terms and conditions of the agreement. Further, except the
aforesaid land deal arising out of so-called agreement of sale dated
21.11.2006, no further preparation or readiness or steps to open the
school has been pleaded or proved by the plaintiffs. This court also
finds that the so-called agreement of sale dated 21.11.2006 has
already been squared up by the order of the Hon'ble Supreme Court
by directing refund of the advance amount with interest and asking the
defendants to withdraw the suit (suit for specific performance) and
these conditions put by the Hon'ble Supreme Court have already been
complied. In view of the aforesaid findings, this Court is of the
considered view that the plaintiffs are not entitled to claim any
damages, much less damages of Rs.60 Lakhs, due to failure of
transaction between the parties in setting up and running of St.
Xaviers School on the schedule-A property. The point of
determination no.(B) is accordingly decided against the plaintiffs-
appellants and in favour of the defendants-respondents.
The point of determination nos.(C) and (D)
36. The evidences on behalf of the plaintiffs reveal that their claim
under these two points of determination are arising out of the
allegation that the defendants had filed false criminal case alleging
fraud against the plaintiffs and the fact about filing of the First
Information Report was published in the newspaper at the instance of
the defendants which caused harm to the reputation of the plaintiffs in
the society and also caused mental agony for which they claimed
damages to the extent of Rs. 30 lakhs on account of loss of reputation
in society and Rs. 10 lakhs for mental agony. As discussed above,
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certain documents including newspaper reports etc were mentioned to
have been filed along with the plaint, but the plaintiffs had filed some
of such documents at much later stage by stating that it was kept with
them in safe custody and this happened after examination of all the
plaintiff witnesses. Consequently, these documents were never
marked as exhibit and were not exhibited by any of the witnesses and
thus these documents were never taken on record. As a result, no
newspaper report was taken on record which was the basis of claiming
compensation on account of causing harm to the reputation of the
plaintiffs in the society and mental agony.
37. As discussed above, the defendants' witnesses have clearly
stated in their oral evidence that they had not given any statement to
any person for publication of any news item in the newspaper in
connection with lodging of the First Information Report alleging fraud
against the defendants. This court also finds that although, one
journalist has been examined as P.W. 4 but this witness has stated in
his cross-examination that he was earlier working in Janmat and
Prabhat Khabar and then he was working with Rastra Bhakt Mail in
Gurgaon. P.W. 4 has not stated that any statement was ever made by
the defendants to this witness pursuant to which the newspaper item
was published, rather in his examination-in-chief, he has stated that he
is an independent journalist and stated that he had read the newspaper
and came to know about the allegations and after the newspaper
report, he had visited plaintiff no.2 to find out the reality and plaintiff
no.2 explained to him.
38. This Court finds that neither the newspaper agencies were made
party in the proceedings to substantiate the source of information
which led to publication of news regarding filing of the First
Information Report by the defendants against the plaintiffs nor any
reporter of one or the other newspaper was examined to disclose the
source of information allegedly published in the newspapers nor the
actual contents of the newspapers have been exhibited before the
court to substantiate the claim for aforesaid damages by the plaintiffs .
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39. This Court further finds that the First Information Report ended
in a compromise between the parties and there has been no finding by
any competent court of law that the allegations made in the First
Information Report were false.
40. In view of the aforesaid facts and circumstances, this Court is
of the considered view that the plaintiffs have not been able to prove
their claim of damages under the aforesaid two heads and there is no
cogent and sufficient material on record to substantiate such claims.
41. In view of the aforesaid facts and circumstances, the claim for
damages on account of alleged filing of false First Information Report
followed by newspaper publication regarding the filing of criminal
case having not been proved, the plaintiffs are not entitled for any
damages as claimed.
Accordingly, the points of determination nos. (C) and (D) are
decided against the appellants and in favour of the defendants.
42. All the points of determination having been decided against the
appellants and in favour of the defendants, this First Appeal is hereby
dismissed.
43. Pending interlocutory application, if any, is closed.
44. Let this order be communicated to the learned court concerned
through 'FAX/email'.
(Anubha Rawat Choudhary, J.)
Pankaj/AFR
