Full Text
JUDGMENT
SHRI R.S. CHHABRA Decree Holder
Through Mr.Sandeep Sethi, Sr. Advocate with Mr.Charnan Lal Sachdeva, Mr.Preet Pal Singh and
S
Ms.Priyam Mehta, Advocates.
Through Ms.B ma Gupta. Mr.Pritesh Kapoor and Miss. Radhika
Sharma and, Advocates.
For orders, see file of CS (OS) No. 353/2006 I
MAY 06, 2015 INDERMEET KAUR, J A 2015:DHC:11895
- --- N THE HIGH COURT OF DELImI AT NEW DELHI
]uc/2m.ent reserved on :294.2015
Judgment delivered on: 06.5.2015 I.A.NOs.2286/7010 1460/2014, 5310/20!4 in CS(OS) 353/2006
R.S.CHHABp Plaintiff
Through Mr. Sancleep Sethi, Sr. Advocate with IVlr.Charnan Lal Sachcjeva.
Mr.Preet Pal Singh and Ms.Pi'iyam Mchta, Advocates
VC1SUS GOPAL KRTSHAN KAPOOR..................................Defendani.
Through Mr.Pritesh Ka.poor, Miss.
Radhika Sharma and Ms,Bina Gupta, Advocates.
SHRI R.S. CHHABR Decree hlolctei
Through Mr.Sardeep Sethi, Sr. Advocate with Mr.Charnan Lal Sachdeva, Mr.Prcet Pal Singh :md
Ms.Pri am Mehta, Advocates.
Through Ms.Bina Gupta, Mr.PritesJ Kapoor and Miss. Radhika
\10\
1. These are three applications filed by the judgment debtor. I.A. No, 226/2O1O (under Order XXffl Rule 3 of the code)
2 This is an application flied by the judgment debtor under Order XX1II Rule 3 of the Civil Procedure Code, 1908 (hereinafter referred to as the Code'); reliance has been placed upon the proviso; submission being that the consent decree passed by the Cou p on 20.03.2006 in CS (OS) No. 353/2006 was obtained under a mis-reprsentat ion and fraud; submission of the plaintiff (RS. Chhabra) in those pleadings that he was a valid assignee of.Rajesh Kumar (defendant No. 6 in that suit) was a false and fraudulent averment; there was no valid assignment by defendant No. 6 in favour of the plaintiff. In the instant case, the deed of assignment dated 20.04.2005 was only an agreement which was yet to be followed up by another document and not being a complete deed of assignment and the whole case of the plaintiff being premised on this \Lov Act. The consent decree passed on 20.03.2006 premised on this assignment deed suffering from a mis-representation is a voidable contract and the defendant accordingly seeks setting aside of this decree. His second submission on the agreement dated 20.04.2005 is based on the averments that a person holding a back to back agreement to sell with the original proposed buyer would not he entitled to sue on the first agreement in the absence of a valid and a complete assignment in his Favour. There being no complete assignment in favour of the plaintiff, the present suit was not maintainable. On this ground also, the decree dated 20.03.2006 is liable to he set aside. This fact was learnt by the judgment debtors only when defendant No. 6 filed an application before the Division Bench seeking setting aside of the consent decree dated 20.03.2006. Submission being that the dispute between the parties had in fact travelled right up to the Supreme Court and the Apex Court vide its order dated 20.11.2009 had granted liberty to the present applicant/judgment debtor to move an appropriate application under Order XXIII Rule 3 of the Code pursuant to which this present I "Haisbury's Laws of England" to argue as to what is a 'misrepresentatjoi' Submission being that a statement of fact, past or present, which is unfounded and which is known to the plaintiff to be a wrong is a ' mis-representation Reliance has also been placed upon the Judgment of the Apex Court in (1968) 2 SCR 797 Njgayyjr/s Hirelayab-Or and Othersto support this submission. Submission being that where a contract is based on fraud or misrepresentation, it is voidable. Reply has been filed opposing the application. It is pointed out that the decree dated 20.03.2006 has attained a finality and as per the version of the applicant/judgment debtor while dismissing the SLP on 20.11.2009, the Supreme Court had refrained from interfering with the orders of the Court below which included the consent decree dated 20.03.2006. Submission being that the application is even otherwise barred by law of limitation; under Article. 137 of Schedule 1 of the Limitation Act, an application seeking setting aside of the decree which is based either on fraud or mis-representation has to be filed within a knowledge of this fraud or mis-representation. Even as per the case of the applicant, he learnt about this fraud or mis-representation when defendant No. 6 filed an application before the Division Bench on 18.05.2006. The present application filed in December, 2010 is barred by limitation. Attention has been drawn to the memorandum of understanding dated 28.02.2005 executed between the plaintiff and defendant No. 6 wherein Clause 7 gave a specific right of assignment to defendant No. 6. Averment being that on 20.04.2005, there was a valid assignment made by defendant No. 6 in favour of the plaintiff and this fact was also well within the knowledge of the plaintiff as this document dated 20.04.2005had been filed by the plaintiff along with his suit. Even otherwise, in view of the judgment of the Apex Cou p reported as AIR 2004 SC 348 ShamSinth Vs. Dar-no Singh decid)bvLrs_anclOis. even in the absence of an y words or expressions in a document where there is prohibition of an assignment or transfer, the implied prohibition cannot be read into such a document. The document dated 20.04.2005 was a valid assignment. This application on. all counts is liable to he dismissed. LA. 1N. 460/2014 (under Section 28 p pecific Relietr Act 4 This is an application filed b y defendants No. 1 to 4 under Section 28 of the Specific Relief Act (hereinafter referred to as the 'said Act') Submission being that the Court even after passing a decree in a Suit for specific performance is not functus officio; the decree being only a preliminary decree; the Court is still in seizen of the matter. Where the timeline laid down b y the Court had not been adhered to by the decree holder as is so in the present case and the decree holder having failed to deposit the balance amount in terms of the direction contained in the order of the executing Court dated 31.08.2009 and it being clear that the decree holder in fact did not have the money to deposit the balance sum of Rs.4.20 crores, it is a clear case where equitable consideration should not lie in favour of such a decree holder and the decree dated 20.03.2006 is liable to he set aside. For this proposition he has placed reliance upon 69 (1997) DLT 996 Parvesh Kumar GziIaii Vs. Dcirshan Singh Gitlati. Reliance has also been placed upon (1999)4 SCC 702 VS. Pcilanichoinv iettiarFjiii[7] Vs. C. Alacippan and Another and (2009) 8 SCC 766 Bhupinder Kumar Vs. Angrej Singh.
5 Reply has been filed opposing the application. It is pointed out that there was no timeline laid down by the Court which was contained in the order dated 20.03.2006. The executing Court in its order dated 31.08.2009 had laid down certain directions about the terms of payment and the obligation on the part of the decree holder to make payment would have arisen only 15 days after the date of execution of the conveyance deed which was to be executed in favour of the judgment debtor. The conveyance deed has not yet been executed in favour of the Judgment debtor. This is all because of the fault of the judgment debtor and this is clear from the report of the Local Commissioner (J.K. Aggarwal) who had been appointed by the executing Court vide its order dated '31-08.2009. Attention has been drawn to the three interim reports filed by the Local Commissioner. Submission being that it does not now lie in the mouth of the judgment debtor to press his prayer in terms of Section 28 as the whole fault lies with the judgment debtor. Reliance has been placed upon AIR 1970 SC 546 Nathulal Vs.Phoofchand and 2005 (5) ALLMR (SC) 15 P.D'Souza Vs. Shonclri7o Nciidu to support an argument that where it is clear from the documents V^ perform his part of the agreement and when he had not done so, the question of plaintiffs readiness and willing to perform his part of the contract would not arise. Reliance has also been placed upon (1972) 3 SCC 684 Hungeiford Investment 2}ust Limited (In Voluntary Liquidation) Vs.Haridas Mundhra and Othersto put forward an argument that this Court has a limited power to grant relief under the provisions of Section 28 of the said Act. It is not an unlimited power; it is only where the vendor alleges that the vendee has failed to perform his part of the obligation, is the vendor entitled to get relief which prayer is clearl y not available to the applicant in the instant case. I.A. 531.QLQi[4] W1PTdcr U Rifle-12 of the Code)
6 This third application has been filed by the judgment debtor under Order.11 Rule 12 of the Code. Submission being that the bank statement for the period w.e.f June, 2009 till date along with income tax returns (for the year 2006-2007) of the decree holder/plaintiff should be called upon by the Court to establish the submission made by the judgment debtor/applicant that the decree holder in fact had no in to comply rA p. holder not having any funds was the reason why he did not pay the balance sum of Rs.4.20 crore; he is not entitled to any equitable consideation; the decree dated 20.03.2006 is accordingly liable to be set aside.
7 Reply has been filed opposing the aforestated application. Submission is that the application has been filed with a malafide intention and only to delay the proceedings in the Coup; the obligation was upon the judgment debtor/applicant who had to comply with the directions contained in the order dated 31.08.2009 (passed by the executing Court) and the obligation on the part of the decree holder to pay the balance amount would have arisen only after the execution of the conveyance deed in favour of the defendant which was not executed in their favour all because of the fault of the judgment debtor. The application even otherwise could onl y have been filed in a pending suit and admittedly in the instant case,, the suit proceedings already stand disposed of in tens of a consent decree dated 20-63.2006.
(i) CS (OS) No. 353/2006 was flied by the plaintiff (R.S. Chhabra) against six defendants of whom defendants 1\To, 1 to 5 were the persons with whom defendant No. 6 had entered into an agreement to sell dated 28.02.2005 qua a property bearing No. 14-B (also known as 14-C), Bazaar Marg, Old Rajender Nagar (hereinafter referred to as the 'suit property). Total consideration was Rs.5.20 crores. In terms of Clause 7 of this agreement, there was a specific stipulation which was to the effect that defendant No. 6 for his honafide need had the right to assign his rights in favour of a third party.
(ii) Vide a subsequent. MOU dated 20.04.2005, defendant No. 6 assigned his right in favour of the plaintiff. This was for consideration of Rs. I crore. The plaintiff on the strength of this deed of assignment executed by defendant No. 6 in favour of the plaintiff has filed the present suit. His contention was [hat he was ready and willing to Perform his part of the agreement and was willing to pay the entire balance consideration to the defendants but the defendants were not ready to execute the sale deed in his favour. fh / q 0
(iii) The suit was filed by the plaintiff on 24.02.2006. A decree of specific performance in terms of the agreement to sell dated 28.02.2005 was prayed for.
(iv) Within less than one month of the filing of the suit on 20.03.2006, a compromise was arrived at between the parties. This was a compromise arrived at between the plaintiff and defendants No. I to 5; defendam No. 4 was present in person. In terms of this compromise, the decree was passed. The compromise application (l.A. No. 3182/2006) was a part of the decree dated 20.03.2006. The schedule of payments was drawn up. It was agreed that the property which was leasehold would be converted into freehold within a period of 15 days; jout statement of the parties was recorded. The suit was disposed of. Decreesheet was drawn up.
(v) I.A. No. 6399/2006 was thereafter filed on 18.05.2006 by defendant No. 6 in CS (OS) No. 35312006 seeking setting aside of the decree dated 20.03.2006.
(vi) I.A.No. 8638/2006 was filed by the plaintiff for direction to
(vii) These applications were disposed of on 05.02.2008 by a Single
Judge of this Coup. The Court noted that a separate substantive suit has been filed by defendants No. ito 4 i.e. CS (OS) No. 691/2007 seeking setting aside of the decree dated 20.03.2006; these applications where all the respective persons were parties could be decided in that suit; these applications were accordingly disposed of.
(viii) In CS(OS) No.691/2007 filed by defendants No. I to 4
(challenging the consent decree dated 20.03.2006) an interim application (l.A. No. 14573/2007) was filed by defendants No. I to 4.
(ix) I.A. No.55198/2008 was filed by defendant No. 6 in the same suit i.e. in CS (OS) No. 691/2007.
(x) Both these applications sought interim relief against the consent decree dated 20.03.2006; a stay of the decree had been sought. These applications were dismissed by a single Judge of this Court on 09.04.2009. The statement made by the respective parties that a fraud had been played upon them in obtaining the consent decree dated 20.03.2006 as there appeared 1.0 be no valid assignment by defendant No.6 (Rajesh Kumar) in favour of the plaintiff was negatived. Cs (OS) No. 3 5 3/2006 & Ex. P. No. 232/2007 C)V
(xi) Appeals were filed separately by defendants No. 1 to 4 and defendant No. 6 respectively.The Diviion Bench on 27.07.2009 dismissed the appeal of defendant No. 6 (Rajesh Kumar) noting the submissions made by him that the decree dated 20.03.2006 is liable to be set aside as it is vitiated by fraud is incorrect. It was agreed that the balance sum of Rs. 20 lacs would he paid by the plaintiff to defendant No. 6 which was thereafter paid before the Single Judge on 23.08.2012.
(xii) On 20.08.2009, the Division Bench dismissed the appeal filed by defendants No. I to 4 on the same premise. This order was passed against the order of the Single Judge dated 09.04.2009 (in CS (OS) No.691/2007). The Division Bench on 20.08.2009 reiterated that even if a proposition is pressed that a party whose consent to a compromise has been obtained by fraud yet in the factual matrix of the instant case, no fraud appears to have been played upon defendants No. 1 to 5; no primafacie case had been made out in their favour. The Division Bench noted that defendant No. 6/Rajesh Kuma r had already entered into an agreement dated 20.04.2005 with the plaintiff (R.S. Chhbra) who had paid a sum of Rs. I crore to R.ajesh Kumar; the possession of the suit Cs (OS) No. 353/2006 & Ex. P. No. 232/2007 Page 13 o138 q`^ property was continuously being enjoyed by defendants No. I to 4. Relief of injunction was not available to the parties. The Division Bench dismissed this appeal.
(xiii) The matter did not rest here. Both defendants No. I to 5 and defendant. No. 6 filed separate Special Leave Petitions before the Supreme Court.
(xiv) The Supreme Court on 20.1L2009 passed separate orders in the
Iwo separate SLPs against the orders of the Division Bench (dated 27.07.2009 and 20.08.2009) The orders passed by the Apex Court on the SLP of defendants No. 1 to 5 reads herein as under:find no reason to inleridee. Special lecive Petit ion is disn2issec[1]. However, this wi/i not come in the way of the Pell lioner challenging the order dated 5.[2] 2008, ii'hcreby the petitioner's application under Order23 Rule 3 (proviso) CPC wa.s dismissed in accordance with laii'
10 The Supreme Court reiterated that it had no reason to inter'1'èr with the order passed by the Division Beich. The petitioner was however not precluded wherein his application under Order XXIII Rule 3 of the Code was dismissed. I.A. No. 22 86/20 10 was thereafter filed.
11 The argument of the learned counsel for the applicant in all the aforenoted applications is that the compromise was largely on the ground of misrepresentation and fraud. Attention has been drawn to the assignment deed dated 20.04.2005. Submission being that this was not a valid assignment; being only an agreement to assign; the whole case of the plaintiff is based on this invalid document; had he not got a valid assignment in his favour, the suit would not be maintainable. The judgment debtor learnt about this fraudulent assignment deed only when defendant No. 6 chose to file an application seeking setting aside of the decree dated 20.03.2006 which was on 18.05.2006. The whole transaction being vitiated by a mis-representation and fraud, it is voidable and liable to be set aside.
12 His second argument is premised on Section 28 of the said Act. Submission being that this Court is not powerless to resc incli the contract if the timeline laid down by the Court had not been adhered to, the Court is well within its powers to rescind the contract. Submission being that CS (OS)No. 353/2006 & Ex. P No. 232/2007 Page 15 o138 the decree for specific performance is in the nature of preliminary decree and the suit is deemed to have been pending in the Court. Section 28 makes it clear that the Court does not lose its jurisdiction even after grant of decree for specific performance; it does not become functus officio where the tirneline laid down by the Court had not been adhered to by the plaintiff/decree holder as in the instant case, equitable considerations are not to be considered in his favour; the decree is liable to be rescinded.
13 His third submission (in terms of his application under Order 11 Rule 12 of the CPC) is that the decree holder did not have sufficient funds to make the payment and that is wh y he did not pay the money to the judgment debtor. This can he deciphered by calling his income tax returns.
14 Needless to state that all these submissions have been refuted. 1 5This Court has noted that submissions and counter submissions of the respective parties.
16 Section 28 of the Specific Relief Act reads herein as under:- CS (OS) No. 353/2006 & Ex. P. No. 232/2007 • '28. Rescission in certain circuinslances of c ontracts, for the sale or lease of immovable property, the specific per/ormance of which has been decreed.— (1) Where in any suit a decree/hr specific performance of a contract/br the sale or lease Of immovable property has been made and the purchaser or lessee does no!; within the period allowed by the decree or such !urher period as the court may allow, pay the purchase money or other sum which the court has ordered him to pay, the vendor or lessor may app/v iii the sonic suit in which the decree is made, to have the contract rescinded and on such application the court may, by order, rescind the contract either so far as regards the par/v in de " 1a or altogether, as the Justice of the case may require. (2) Where a contract is rescinded under sub-section (1), the court— a) shall direct the purchaser or the lessee, if he has obtained possessionof the property under the contract to restore such possession to the vendor or les sor, and fifiniav direct payment to the vendor or lessor of all the rents and pro/Its i'i'hih have accrued in respect of the property from ihe date on which possession was so obtained by the purchaser or lessee until restoration o/ossession to the vendor or lessor, and i/the justice of the case so requires, the refund of any sum paid b y the vendee or lessee as earnest money Or( lePosit in connection with the contract. (3) If the purchaser or lessee pays the purchase money or other suni which he is, ordered to pcy under the decree vi'ithin the period re/rred to in sub-section (1), the court may, On application made in the same suit, awai'd the purchaser or lessee such /brthem' relief as he may he entitled to. includingin appropriate cases all or any of the following reliefs', namely;— (a) the execution of a proper conveyance or lease by the vendor or lessor; (Ifi the delivery of possession or partition and se parate possession, of the property on the execution o/ such conveyance or lease. (2) No separate suit in respect of any relief which may he claimed under this section - (5) Thecosts bf any pioceedings under this section shall be in the divcrelion of/he court.
17 There is no doubt to the settled legal proposition as submitted by the learned counsel for the plaintiff that even after passing of a decree under the Specific Relief Act, the Court does not become functus officio; it retains its powers and being in the nature of a preliminary decree and where the purchase money has not been paid as per the schedule; the contract may he rescinded on the application made by the vendor/lessor.
18 The factual matrix of each case however has to be examined in its individual context for the application of this legal proposition. In the instant case, the compromise decree was passed on 20.03.2006. This was a consent decree between the plaintiff and defendants No. I to 5 where defendant No. 4 was present. This decree was passed within less than one month from the date of filing of the suit which suit had been filed by the plaintiff on 24.02.2005. This suit was premised on a deed of assignment dated 20.04.2005 executed by defendant No. 6 (Rajesh Kumar) in favour of the plaintiff. The rights of the plaintiff had emanated from this assignment deed. Not happy with this consent CS (OS) No. 353/2006 & Ex. P. No. 232/2007 Pare 18 of 38 ql^ decree, defendant No. 6/Rajesh Kumar moved an application seeking setting aside of this consent decree. So also defendants No. ito 5. They also filed a separate application seeking setting aside of the consent decree dated 20.03.2006. These applications were disposed of by the learned Single Judge on 05.02.2008. The Single Judge had noted that a separate substantive suit i.e. CS (OS) No.691/2007 has been filed by defendants No. 1 to 4 seeking the same relief i.e. seeking setting aside of the decree dated 20.03.2006. Accordingly, these applications could be dealt with in the substratum of the said suit.
19 In CS (OS) No. 691/2007, two separate applications (as noted supra) were filed by defendants No. 1 to 5 and defendant No. 6. Both of them sbught setting aside of the decree of 20.03.2006. They were both dismissed by a speaking order of the Single Judge dated 09.04.2009. The Single Judge had noted that no prima-facie case is made out in favour of the party to grant them the relief of stay of decree dated 20.03.2006. This was upheld by the Division Bench by two separate orders dated 27.07.2009 and 20.08.2009. At the cost of repetition, the defendants (that the assignment deed dated 20.04.2005 executed by defendant No. 6 in favour of the plaintiff is vitiated being based on a fraud) is prima-facie not made out. The orders were passed on the two separate appeals filed by defendants No. 1 to 4 and defendant No. 6 respectively. 20Since the contesting parties before this Court are defendants No. 1 to 4, it would be relevant to extract the order passed by the Division Bench on 20.08.2009 (on the application of defendants No. 1 to 4). It reads herein as under:-
10. If the P/aintifisYAppe/iaii were mi'circ of the contents of/he Memorandum of Understanding c/cited 20.4.2005 as is evident fr om the jiict that the original document was annexed to the plaint in CS(OS) No. 353/2006 and a cop y of/he same 1,1110S,filed b y them as Annexj,reP[2] to the Writ Petition it cannot be said that a ma/er/al fact ivas i,vithheldfironl them or a f/and v'as plcmed upon them. Whether the Memoramic/wiii of Understanding doled 20.4.2005 executed between Del/nc/ant.Vo. / and De/L'ndant iVo.[2] amounted to assignment of the MO. U dated 20 4.2005 in fcivour of Dc//nc/ant No.1 or it onl y gave a right to Def/ndant No.1 to get it assigned in his f/ivoz,r at a later dale is Cl ma//er of iniel[7],re/c,t/omi of clocujiment If the Plamtif!v/Appe//hnis. after considering the A 'Iemorcmch,jjm of ' Understanding dated 20.4.2005 and consulting their Advocate agreed wi/h the Contention of Defendant No.5 that by virtue of Memnoranchijmi ot Understanding dated 20.42005, the earlier MO. U dated 28.2.2005 stood assigned in his /vour. it cannot be said that a fraud s' ied Upon (hem by Defendant No.]. There can he a genuine dif//rence df mv ppinion on the iejii1tei,i-çtpio,; 0 odocwnent But since lon g as the document itself was made available to them, it cannot be said that there was a fraud upon the Plaitiji './4pjelLani,s'_nigryji; because Defendant No. 1J!eipreted it to mean as assignment o/thefirst M. 0. U in his fiivow- and the Plaintiff'/Appellants agreed with him c/nd that too after consulting their Advocate. In such circumstances, neither there was any concealment nor anyJLci1c[1],
11. As noted b y us, while dismissing the appeal filed b y respondent No. 2, Rajesh Kumar, Clause 7 of the Memorandum of Understcinding dated 281h February, 2005 executed between hi,;, on the one hand, and the appellant and late Sint. Sanjogta Kapoor, on the other hand, shows that Resm,onden/ No. 2 Shri Rajesh Kumar was •V,ec ticollv granted right to nominate and assign Memorandum of Understanding in favour of'anv nol'nmnee(s) and assignee(s). As further noted by us, since Shri Rajesh Kumar had divested all his rights in ic/vour of Shri R.S. Chhabra (Respondent No. I. herein). The Memoranduin. of Understanding dated 201h Apeil, 2005 specifically.s'tijnmlatecf that he (Respondent No, 1, Shri R.S. Chl;ahra) shall he entitled to get the sale deed executed in his Jvour, balance pavn'men/ I'Vo"s to he macfe directly to the Se/lees and the possession was also to be handed over b y them to Shri R.S. Chhahra. After execution (d, the second A'/emorcmncfwi', of Understanding Respondent A/c. 2 S'hui Rajesh Kum'miae was' not entitled, either in law or in equity, to get the suit properto sold to him under the A'Ienmom'andun'i of Understanding dated 281.h February, 2005, Therekee theappellants having commipromised with respondent No. dated_20tig April, 2005 and Ufurycon.s'zgjJ,7gjJ el l' advocate, it cannot he said that a No.] h claim fpgj hat the Miniorandun; QUn(lerslancfpg,gdated_28th_Iebruarv 200 hadbeens'.s'i,;ed in is fiivour. Respondent - qf' Lrystqjjling dated 20th 4pj2005 to mean that the earliej' kmorcqgfimii'ip[ Uiicler.s'taqçjjpg dated 281hFebrm.mary2005s/o.s'.s'id his c,i;oii,/t a.çjfwoi/d 1701 ('077,wit 'lle 67 fi CS (OS) No. 353/2006 & B. P, No. 232/2007 Page 21 ot38 1-c Memoig j]dlIili of Understand/n 1. s very much in the ku i ied J the appellants In/act, wefoilec] to appreciate ii'hat difference it i'i.'ould have made to the appellants had the Memorunduni of Unclerstcinding doted 20th August. 2005, actually assigned the previous Memorcincluin of Understcinding dated 28.2.05 to Respondent No.], instead of only giving him a right to,get the Previous Memorandum of Understanding assigned in his' ivour at a later date. For them what was material was that they had entered into a Memorancizini of Understanding with respondent No. 2 Rajesh Kumar on 281h February, 2005 and under that documents they had given special right 10 him to assign his rights under the Memoranduni of Understanding in fovour of any nominee or assignee and Respondent No.2, Shri Rajesh Kumar, by signing the Me/i oranduni of Understanding dated 20,4.05 with respondent No. 1, has already divested h/in of all his rights under ' the A/lOU dated 28.2.2005. For them i'i'hat is material is that the y ore getting agreed consideration from respondent No. I and are not committing an.' breach of the term.s' and conditions contained in the 7'Ieinorunduin of Understanding executed on 281h February, 2005 between them and Respondent No. 2, Rajesh Kumar, They have nothing to lose by executing the sale deed in favour of Respondent /Vo 7. 11 is more 'so when not on/v the application-filed b-11, Shri Raje.s'h Kumur for grant of interim injunction against execution of the cornpro misc decree dated 281h March, 2006 passed in CS (OS) No..353 of 2006 has been dismissed, the appeal filed b y him has also been dismissed by this court,
16. Even if we proceed on the proposition that a party ii;ho,ve Consent to the compromise resulting in passing of' coluipromi'.ve decree ivos obtained by fiaud, is entitled to file a suil for setting asic/c such a c'olnpromi,ve decree, we find that in the to have Therefore the appellants have fhiled to make out a prime facie case in favour of setting aside the compromise decree doled 2811I A'Iarch, 2006." CS (OS) No. 353/2006 & Ex, P. No. 232/2007 Page 22 oF38 ic: 'C IV
21 This order of 20.08.2009 has attained a finality before the Supreme Court (quoted supra). The Supreme Court had categorically stated that there is no reason to interfere with the orders passed by the Courts below. Defendants No. I to 5 were however not precluded from seeking setting aside of the order dated 08.02.2005 by moving an application under the provisions of Order XXIII Rule 3 of the Code.
22 Order XXIII Rule 3 of the Code reads herein as under:- "3. Compromise of suit.- Where if is proved to the scifi//ct jon of the cowl that a suit has been adjusted wholly or in part by any lawfil agreement or compromise in writing and signed by the parties, or where the de/17danI satisfies the plaintiff in of the whole or any part of the subject matter of the si/it, the Court shall order such agreement, compromise or cat/s/action to he recorded, and shall pass a decree in accordance therewith so//fr as ii re/cites to the parties to the suit, whether or not the subject matter of the agl'eemenl. compromise or satisjiction is' the same as the subject matter of the suit: - Provided that where it is alleged hr One par/v and denied by the other than an adjustment or satisfaction has been arrived at, the court shall decide the question: but no adjournineiit shall be graiitecl/oi' the purpose a/ deciding the question, unless the court, for reasons to he recorded thinks fit to grant such adjournment. Explanation. An agreement or compromise uhich is void or avoidable under the
23 The Explanation to this Section postulates that a consent decree which has been arrived at between the parties will be treated as non-est and a nullity in law if the consent of the parties has been obtained against the provisions as contained in the Indian Contract Act and ground for vitiation of such a decree would include a mis-representation and fraud. Mis-representation and fraud are defined in Section 18 & Section 19 of the Indian Contract Act respectively. It is on these provisions of the Indian Contract Act that the ground of fraud and misrepresentation have been pleaded. Submission being that assignment deed dated 20.04.2005 executed by defendant No. 6 in favour of the plaintiff is in fact a fraud and based on false avernients.
24 However what is the mis-representation in the assignment deed has not been disclosed; there is no detail of either the mis-representation or fraud. It is a simplicitor statement unsupported by any Further detail; except a vague averment that this document dated 20.04.2005 was only an agreement to assign and not a completed deed of assignment.. The assignment deed is a registered document. Defendant No. 6 had assailed this document by filing an application seeking setting aside ni this CS (OS) No. 353/2006 & Ex. P. No. 232/2007 Pave 24 of 38 decree (20.03.2006) on the ground that this assignment deed was not a valid assignment but he had lost this argument right up to the Supreme Court. On 20.11.2009, the Supreme Court had dismissed his appeal.
25 This court notes with pain that the document dated 20.04.2005 was available with the defendants right from the inception; this document was filed along with the plaint in the year 2006. It was on the basis and premise of this document that the suit was filed. Defendants No. 1 to 5 had entered into a compromise with the plaintiff voluntarily and with their free will which is recorded in the consent decree dated 20.032006. No detail of 'fraud' or 'mis-representation' has been pleaded or expressed to the Court. hi fact even on a specific query had been put to the learned counsel for the applicant there is hardly, any answer. Clauses 2 & 3 of this MOU (dated 20.04.2005) disclose that the first party (i.e. defendant No. 6) agreed by this document to assign all rights in his favour to the second party i.e.. the plaintiff Out of the total consideration of Rs. I crore, Rs. 80 lacs was admittedly received by defendant No, 6. The document read as a whole clearly depicts the intent of defendant No. 6 which was to assign all his rights in the property to CS (OS) No. 353/2006 & Ex. P. No. 232/2007 defendant No. 6. Reference to the earlier document dated 28.02.2005 executed between defendants No. 1 to 5 & defendant No. 6 by virtue of which defendant No. 6 had acquired his right also finds mention. The MOU dated 20.04.2005 was a complete assignment deed. At the cost of repetition the plea of fraud and misrepresentation set up by the defendants i.e. both by defendant nos.l and 4 as also defendant no.6 had been rejected right up to the Apex Court.
26 The order dated 31-08.2009 is also relevant. This was an order passed by the executing Court. The executing Court for the first time had in fact laid down the timeline within which the parties were to perform their respective obligations. It would be relevant to extract this part of the order; It reads herein as under:- In i;ieii' of the tact that the suit propel-tv is ci lecisehold property, it viiil have to be converted to !eeho!i[1]. An appuiccilion in that regard is slated to he pending in the office 0,11 and DO. Since the De1ndcm[1] 5, 1 to 5 in the suit are not coming /brward to take further leps, the learned Coziiy C 'n'nf vsioner is directed to take the necessary steps in terms of this order (010n1a viith a certified copy of the decree) aid e[1] le cOnve i'ance deed executed in the of/ice of the La/ic! DO in jiivoz,r of the JDi' Del" ndani Mos. I to 5 within the next tvi'o i'ieeks. The hit/once sale cons/dei'arioji far the purpose of registration of the sale dccci shut! he deposited in favour of the JD[5].
22. As a next step, within two weeks thereof/er, the DH u;iii s aIim/i to the learned Court Commissioner the drcif sale deed and cl//er finalizing the same the learned Court Commissioner veil!;ake steps 10 have it ropistered. The DII ill he called upon to deposit the stamp cmiv lithe lewneci Court Commissioner mci/bin a period Q/ h,vo weeks. A sum of Rs. 20 luklisvhich has to be paid hi the DI-! iiil also he deposited in this Court b))the DH wit/i/n a period of/i/ieen dav from the date of execution of the conve yance deed. Upon soc/i depo.ri.v it will be open to the applicaiit Mi. Rajesh Kuniar to file an appropriate application seeking) withdrao.'ul oft/ic said amount of Ps. 20 lakhs and the original sellers to tile an Lipplicatioli /br vi.'ithdramving the balance sale consideration.
23. The fees of Mr. I. K. Aggarivai, the learned Court Coii missioner is fixed at Rs. 10,000/- which will be paid by the DH 1, / thin a period of ho i;ee/ca pro,n 10(10).. Simultaneous with the registration of the sale dccci, the learned (owl C o/nmissioner will fake possession of the ui[1] property and hand it over to the DH. It ui/I be open to the learned Court Connnis,s,joner to seek the assistance of the local po/ice, zf cmy, far carrying out the directions aforementioned.
24. 147it!i the above directions, the cxecutioii petition is disposed of A ceitiflecI copy of this order together mi/tb certified cop): (/f the decree he delivered /hrthiiith to the Court Commissioner.
27 The executing Court had noted that defendants No. I to 5 were not coming forward to take relevant steps. Accordingly, a Court Commissioner (J.K.. Aggarwal) had been appointed to get the conveyance deed executed on the application already pending beore the L & DO. This was to be done in two weeks,. The balance consideration Cs (OS) No. 353/2006 & Ex. P. No. 232/2007 Pace 27 of 3.,.. -.............--.,-.. had to be paid by the plaintiff in favour of'. the defendants when the i. conveyance deed would have been executed by the judgment debtor. Till date the conveyance deed has not been executed in favour of the judgment debtor.
28 The report of the Court Commissioner is relevant and speaks volumes of the conduct of the defendants. The Court Commissioner has submitted three interim reports. They are dated 05.10.2009, 18. 1.2009 and 12.12.2009. In its report dated 18.[1] 1.2009, it had categorically been stated that the Deputy L & DO had addressed a letter to the defendant Krishan Kumar Bakshi asking her to be present before the L & DO with all the requisite documents in order that the conveyance deed could be executed in favour of the party. However, inspite of intimation by the Deputy L & DO to the judgment debtor, they had cared not to appear. In its report, the Court Commissioner has categorically stated that on 12.11.2009, Krishan Kumar Bakshi (defendant no.) had received this communication from the Deputy I.. & DO and had replied vide her communication dated 16. 11.2009 wherein she had stated that since the SIJ[1] is pending helore the Supreme Court and she had sought a stay of CS (OS) No. 353/2006 & Ex. P. No. 232/2007 Page 28 o[1]:38 1! 11 0 the execution; the directions of the Court Commissioner be kept in abeyance.
29 Thus admittedly the judgment debtors were aware of the proceedings initiated by the Court Commissioner but they chose deliberately and intentionally to avoid them and not to appear before the Land and DO for the execution of the conveyance deed. The Court Commissioner has filed his last report dated 12.12.2009 bringin g all these facts to the knowled ge of the Court wherein it was reported that the Deputy L & DO has again asked for the presence of the parties in order that the conveyance deed could be executed in their favour and Inspite of notice to their counsel (Ms. Bina Gupta, Advocate), none had appeared for the judgment debtor. Thus the whole premise of argument of the defendants that there is delay on the part of the decree holder in complying with the directions contained in the order dated 31.08.2009 and thus decree is liable to be rescinded without any basis.
30 In view of the aforenoted discuss. ion. this Court is of the view that none of the three applicat ions filed by the applicant are sustainable. C They have been filed only to dela y the proceedin gs, Being malafide each of the application is dismissed with costs quantified at Rs.20000/ each. I.A. N22286/2010.jder Order XXIII Rule 3 of the CPçj 31 The applicant himself is not clear whether it is a case of misrepresentation or fraud; till the first two days, the arguments were being presented on 'fraud' and pleadin gs also spoke of fraud; it is noteworthy to note that the details of the mis-representation or fraud has not been given. This Court has alread y rejected his plea that the MOU dated 20,04.2005 was only an agreement to assign and not a complete deed of assignment.
32 The consent decree and the plea of fraud/mis-representation (as noted supra) had been set up at various stages of the litigation and right up to the Supreme Court, this plea at all stages had been rejected. The application is also time barred. Limitation for an application of such a nature is three years which period has to be counted from the date when the knowledge of the fraud/mis-representation was known to th party; admittedly in this case, the applicants learnt about the fraud/mis-. representation qua the assi gnment deed when defendant No. 6 filed an CS (OS) No, 353/2006 & Ex. P. No. 2322007 application on 18.05.2006 seeking setting aside of the consent decree dated 20.03.2006. The present application filed in December, 2010 was clearly beyond the period of limitation. On this ground also, the application is also liable to he dismissed.
33 This application is without any merit, it is dismissed. R.A. No, 1460/2014 (under Section 28 of the Specific Relief Act)
34 The discussion supra evidences that the breaches were all committed by the defendants. In fact the order dated 3 1.08.2009 passed by the executing Court - had noted that the delendants were. not cooperating and that is why a Local Commissioner had beeii appointed. The Local Commissioner in its various reports had detailed the noncooperative attitude of the defendants and inspite of the defendants being asked to appear before the office of L & DO to get the conveyance deed executed, the y failed to do so. The letter dated 16.11. 2009 of Krishna Kumar Bakshi is a clear evidence of this defiant attitude of the defendants. They were at breach on almost every stage of the proceedings. The obligation on the Part of the plaintiff to pay the balance consideration of R.s.4.17 crores within 15 days would have CS (OS) No. 353/2006 & Ex. P. No. 232/2007 Page 31 o138 K7C arisen only after the execution of the conveyance deed which at the cost of repetition has not been executed till date.
35 The Apex Court in Hungeufoi-d Investment Trust Limited (supra) while dealing with the power and jurisdiction of a Court on an application under Section 28 of the said Act had inter-aija noted as Under:- Ii mcii' and not i/ /re quent/i; doer happen that after judgment hcis been given /br the pei- /ornlajice of a con 1/act rome /ta-thei' relief becomes necessari;in co nsequence of one or other of the pat/icr making default in the per/brl/la,ice of something which ought under the jiIdk/i/ejif to be perfbrnied by him or on his part; as /or ins/a fe/ne at, where ci vendor re/uses or is unable to exec ui/c a proper conve yance o/ the propel-tv or di purchc,sei- to pay the purchase money.... There are two kindr ofre//eJci//erji/d/gmen//oi. speci/Ic p eifbrniance 0/whit/i either part v to the contract may, in a pro/icr case, avail himself- ) He may obtain on i/lotion in the ac/ion) an order appointing a de/in tie time a/id place foi- the completion of the coniraci b y pavmeli/ of the and delivei-i.' over of the execi.itec'/ conve yance and title deeds-, or a period within Which the judgment is to be obeyed, and f the Other par; fbi/s to obe y the order, /1/Ui; thei-eupoii at once issue a Fir/I of seqi/esli-cif ion against the defaulting pau'tvr es/ale and cf/bc' Is (ib He mat' app/i; to the Cow-i by 1110/ion in the aciion/ fbi- an order rescinding the coil/I-act On an application of this kind, if it appears' i/lal the party moved against has positn;e/y refused to co/np/eme the contract its ililiiiediate 7-esci,s'sjo,[7] may he Pr Y'*,^ IN j ordered; OtJ1eiwise, the arc/er wit/ be for rescission in defiiuii o/coi)ipletion viiihin ci limited time.."
36 The factual matrix of the case discloses that all faults lay on the part of the defendants. The obligation on the part of the plaintiff to pay the balance amount had not arisen as the conve yance deed was not executed in favour of the defendants and this was all for the fault on the part of the defendant. Learned Local Commissioner and the communications exchanged between him and the Deputy L & DO and defendants No. 1 to 5 are all evident of this fact.
37 The defendants are not entitled to any relief on this application. It is dismissed I.A. No. 53lO/2O4Iunder Order 11 Rule 12 of the code 38 This application has been filed under order ii Rile 12 of the Code which specifically stipulates that such all application can be entertained only in a pending suit. Even presuming the submission of the learned counsel for the defendants that the suit has not vet been disposed of and even while decreeing the suit of a speci f ic performance. it is only in the nature of a preliminary decree and the Court is yet seized CS (OS) No. 353/2006 & Ex. P. No. 232,2007 Page 33 of-38 of the matter; the prayer made in the application is also not liable to be \\ granted to the applicant. The submission of the applicant that the obligation could not be performed by the plaintiff as he did not have the sufficient funds in not a matter to be gone into at this stage as the obligation had to come in hierarchy. The first obligation was on the part of the defendants to get the conveyance deed executed in his favou. It was only thereupon after 15 days of the execution of the conveyance deed in favour of the defendants that the plaintiff was obliged to pay the balance amount. The obligation on the part of the plaintiff had not arisen as the conveyance deed has not been executed till date. ihe question of asking the plaintiff to file his tax returns and to disclose his bank statement does not arise. This application appears to he malafide. It is dismissed.
39 Alternate _submission An alternate submission had also been made by the learned counsel Ir the applicant. This was to the effect that if this Court is not inclined to pass any favourable order on the three pending applications tiled by the applicant, the COLIIt may consider his alternate plea; his CS (OS) No 353/2006 & Ex. P. No. 232/2007 icalternate plea being that he is entitled to an enhancement of money compensation as the consent decree was passed in the year 2006 and in the last nine years, the propert y prices have escalated and the sale price of the property in question which was in the year 2006 fixed at Rs.5.20 crores has now escalated to mbre than 10 times over. This Court being a Court of equity may in the alternate compensate the applicant.
40 This argument has been opposed. Learned senior counsel for the plaintiff has pointed out that in all these applications which have been filed before this Court, this submission has not been pleaded. This submission has been made orally and being an afterthought and not being part of the pleadings, the applicant is not entitled to any relief on this count. Even otherwise equitable considerations cannot weigh in favour of a party who himself has been negligent and guilty; it is all because of intentional fault on the part of the applicant/defendant that the conveyance deed had not been execute d till date in favour of the applicant, the plaintiff is crying hollow and was running from pillar to Post since 20.03.2006 and inspite of the plaintiff having the consent decree Since then; the same has not been implemented; no equitable consideration was in favour of the plaintiff. This Court is of the view that the applicants are also not entitled to this alternate prayer. 46 in AIR 2002 SC 2290 Nirinctia Anand Vs. Advent coipoi-atio,i Pvt. Ltd and O,s the Apex Court while examining such an alternate plea in a suit for specific performance had off quoted that no part) can take advantage of its own wrong. In this context, it had also noted as under:
45. Ii would be seen in none of the above noted cases this ('on,-! has Ia/cf an absolute rule that the proposed i;eodee won/cf be reqiii-ec/ to cO/)Ipensc,fe the Proposed vendor /6,- the esca/afioli of Price of file I017t/ aiid huilc/in r da,inc the pendency of the proceeding in Coiii-i ci! differel?! level
46. The appellant has aliici ' s been i-ec,th; and willing to pei-fiirii, her pam of coni mci at all stages. She has viol fc,ken cmv ac/van/c/ge of her own wrong The ('p/Ic/lan[1] is in viO way responsible for the delco; c/f urn sfcíge qfthe procecjin If is the icspondeni,s who have always been and are !iing to ii;i-iggle ocif of/lie con fl-act The respondeniv cannot lake advaniaae qf their oil "' "1761117e,[7] plead f/ic,l the gi-cmf a/decree of specific peiforincuice ii'ou/d amount to an unfciii- ac/vanfage to the appellant
47. Requiring the appellant to pay f/a-f lie;- 5111 of Rs. 40 Lcikl;s w0u1ci677cri cu/iiocm/ fi-usirciting the agreement ifse!fa,r the appellant mciv 170l be in a position 10 pci I/Ic CS (OS) No. 353/2006 & Ex. P. No. 23/2007 Pace 36 of 38 SLWI ?! R.Y. -JO lalchs. Respective counsel /br the parties had quoted the figure oja particular sum which could be paid to the appellant I!? lieu of avoiding the decree of specific perfrniance. The appellant had not made an offer to pay any additional sum over and above the quoted price to sell by wa y of compensation. It does not indicate the financial position 0/the appellant to pay the additional sum of Rs. 40 lakhs. With due respect, in my view, it would be unfair to grant the decree of specific pertorma'nce by one hand and take it back by the other.
47 The applications having being dismissed, the next course is to ensure that the execution of the decree dated 20.03.2006 is properly effected. This Court accordingly deems to think fit to appoint Mr. Vinod God, Registrar General of this Court to ensure that the conveyance deed I qua the suit property i.e. property bearing No. 14-B (also known as 14- C), Bazaar Marg, Old Rajender Nagar is executed by the L. & DO in favour of the defendants and fir this purpose, this Court authorizes the cooperating and not appearing before the L & DO which has led to the fr ustration and non-implementation of the decree dated 20.03.2006. The conversion charges of converting the property from lease hold to freehold are agreed to he borne by the plaintiff After the conveyance deed has been executed in favour of the defendants, the balance payment CS (OS) No. 353/2006 & Ex. P. No. 232/2007 Pave 37 of 38 of Rs[4]. 1 7 os shsU be made by the plaintiff to the defendants within a penod of 5 hsys.
49 All applications as also the execLition petition stand disposed of in the above tcrms IINDERMEET KAUR, J MAY 06, 20 1{0 A a (1S (Gcl\k. T 612000[5] L P. ISo 232/2007 Page 38 0L38 '-Ic