Full Text
JUDGMENT
M/S KEVENTER AGRO LIMITED ..... Appellant Represented by: Mr.Ravi Gupta, Sr.Advocate instructed by Mr.P.Choudhar and
Mr.Sachin Jain, Advocates
Represented by: Mr.Krishnendu Datta, Advocate with
Mr.Rahul Malhotra, Advocate for R-1 Mr.Rajat Aneja, Advocate with
Mr.Toyesh Tewari, Advocate for R-2
HON'BLE MR. JUSTICE YOGESH KHANNA PRADEEP NANDRAJOG, J.
1. On November 30, 2015 suit filed by the appellant for specific performance of a written agreement to sell dated August 03, 2010 (wrongly typed in the plaint as October 03, 2010), for cancellation of a sale deed dated August 04, 2011 executed by defendant No.1 in favour of defendant No.2, permanent and mandatory injunction and damages, was listed for settlement of issues. An application under Order 7 Rule 11 filed by defendant No.2 for rejection of the plaint was also listed before the learned Single Judge.
2. The learned Single Judge has held that the agreement in question was 2017:DHC:463-DB not between the appellant and defendant No.1: the owner of the suit property, and thus the suit for specific performance would not lie is the view taken. Since the appellant admitted being dispossessed from the suit property and had pleaded status of a licensee the learned Judge has held that the suit would continue for purposes of damages as claimed.
3. Arguments in appeal were advanced regarding the maintainability of the suit qua the relief of specific performance.
4. The written agreement to sell executed on August 03, 2010 has been signed by one Mr.M.K.Jalan and Mr.Vinay Maloo. It reads as under:- “The following has been agreed between Mr.M.K.Jalan and Mr.Vinay Maloo: The Building No.9 at Masjid Moth Commercial Complex, Greater Kailash Part II is currently under the possession of Shri Moti Lal Bothra and Shri M.K.Jalan. Both of them would mutually agree on the market price of the property and if Mr.Jalan wants to buy the property at the agreed market price, he will have the first option on the same. Mr.K.L.Bothra’s (representative of Mr.Vinay Maloo) consent will be taken while determining the market price. 30% of the sale price will be given to Mr.M.K.Jalan (as mutually agreed between Mr.M.K.Jalan and Mr.Moti Lal Bothra), which will be kept in Escrow by Mr.M.K.Jalan for overall settlement of his account. Mr.Vinay Maloo confirms that this understanding is irrevocable. Date: 3rd August 2010”
5. The case pleaded in the plaint is that the appellant and defendant No.1 had business transactions and defendant No.1 and its Directors owed substantial money to the appellant. In September 2007 it was agreed that the appellant would be permitted permissive use and occupation of 9, Masjid Moth, Greater Kailash Part II, New Delhi, owned by defendant No.1 and that it was agreed at that time that the appellant shall have the first option to purchase the building. It is pleaded that subsequently the written agreement dated August 03, 2010 was executed. Relevant would it be to highlight the specific pleadings in the plaint to this effect. It is para 4 of the plaint. It reads as under:- “4. That the plaintiff and defendant No.1 company had certain business transactions and pursuant to that around September-October 2007 the defendant No.1 permitted the plaintiff permissive use and occupation of the suit property and to set up its office in the suit property and handed over the peaceful and vacant possession of the same to the plaintiff Company. At the time Defendant No.1 handed over the possession of the Suit property, the defendant No.1 agreed that the plaintiff shall have the “first option” to purchase the entire building being 9, Masjid Moth, Commercial Complex, Greater Kailash-II, New Delhi. Defendant No.1 and its directors owed substantial money to the plaintiff on account of business dealings and in part consideration thereof the plaintiff was given the right of license of the suit property and the first option to purchase. The part consideration stated aforesaid is still due and payable. The plaintiff never took any legal step for recovery of the abovesaid amount as defendant No.1 had given the right of license for the suit property and had given right of first purchase of the suit property. The said oral agreement was subsequently reduced in writing vide agreement dated 3.10.2010. Therefore, plaintiff’s possession of the suit property is coupled with part consideration.”
6. It is pleaded in the plaint that Shri M.K.Jalan is the Chairman of the appellant. It is pleaded that in October 2011 the appellant was illegally dispossessed from the suit property. Damages claimed are in sum of `60,29,254/-.
7. Since in appeal arguments were advanced qua the suit being held not maintainable to enforce the agreement to sell, we simply concentrate hereinafter on said issue.
8. The learned Single Judge has, after noting the agreement to sell, noted Section 91 and 92 of the Indian Evidence Act, 1872 and has thereafter reasoned as under in para 9 to 13 of the impugned order:-
9. Learned Senior Counsel for the appellant urged that the appellant could not be denied an opportunity to lead evidence that Shri M.K.Jalan was acting on behalf of the appellant company when the agreement to sell dated August 03, 2010 was executed and that proviso (2) to Section 92 permitted such evidence to be led.
10. Proviso (2) to Section 92 of the Evidence Act permits the existence of any separate oral agreement to be proved but as to any matter on which a document is silent and which is not inconsistence with its terms.
11. Since the agreement, specific performance whereof is sought is a written agreement, it cannot be lost sight of that the signatories thereto are Mr.M.K.Jalan and Mr.Vinay Maloo. It has not been recorded that Mr.M.K.Jalan is acting on behalf of the appellant company as its Director. It is thus not a case where the document is silent as to who are the parties to the document. The document clearly records that the agreement is between the two executants.
12. The appellant cannot rely upon any prior oral agreement to sell for purposes of maintainability of the suit for the reason the suit is based on the written agreement to sell dated August 03, 2010.
13. It is settled law that a company is a separate entity from individuals and if a company executes an agreement to sell undertaking obligation to purchase a property the same has to be by a person who can bind the company. The document must record that the party to the agreement is the company acting through a living human being.
14. There is yet another problem which the appellant cannot overcome. It is settled law that there cannot be any variance between pleading and proof. In the entire plaint there is no plea that Mr.M.K.Jalan was empowered on behalf of the company to bind the company to enter into an agreement to sell. There is no averment that Mr.M.K.Jalan was acting on behalf of the company. The crux of the pleadings concerning the agreement to sell in question is in para 4 of the plaint and we do not find a word mentioned therein that Mr.M.K.Jalan was acting on behalf of the appellant company. Having not pleaded said fact, the appellant in any case would not be entitled to lead any evidence to prove that Mr.M.K.Jalan was acting on behalf of the company when the written agreement to sell dated August 03, 2010 was executed.
15. We find the pleadings in the plaint concerning monies owed by defendant No.1 and its directors to the appellant extremely vague. A bald allegation is made that defendant No.1 and its directors owed money to the appellant. Which director owed the money and how much? How much money defendant No.1 owes? Nothing has been stated.
16. We concur with the five conclusions arrived at by the learned Single Judge in para 14 of the impugned order which read as under:-
(i) Admittedly, the plaintiff places reliance upon the
Agreement to Sell dated 3.8.2010, an which agreement to sell is said to be the culmination of earlier discussions between the parties with respect to the suit property.
(ii) The Agreement to Sell dated 3.8.2010 is specifically entered into between Sh.M.K.Jalan only as the person who has a right of pre-emption i.e. Sh.M.K.Jalan cannot be said to have acted for anybody else including the plaintiff/Company as is the case which is set up in the plaint.
(iii) Sh.M.K.Jalan is not a party/plaintiff in the present suit, and plaintiff/Company is not seeking to enforce rights under the Agreement to Sell dated 3.8.2010 either as a nominee or for and on behalf of Sh.M.K.Jalan. Even if Sh.M.K.Jalan is now hereafter sought to be added as a plaintiff in the suit, the provision of Section 22 of the Limitation Act, 1963 will apply as per which the suit will be taken to have been filed by Sh.M.K.Jalan only when the application would have been filed to implead Sh.M.K.Jalan as the plaintiff. Of course, I must hasten to add that it is nto the case of the plaintiff argued before this Court today that Sh.M.K.Jalan had individual and personal rights under the Agreement to Sell dated 3.8.2010 and the case of the plaintiff is that it is the plaintiff/Company which acted for taking benefit of the right of pre-emption of the suit property. Accordingly, no observations are made by this Court finally one way or the other with respect to whether the suit if filed by Sh.M.K. Jalan or if Sh.M.K.Jalan is said to be added in the present suit today, whether such claim of Sh.M.K.Jalan would be barred by limitation.
(iv) As per the averments in the plaint, it is not stated that Sh.M.K.Jalan entered into an Agreement to Sell dated 3.8.2010 for and on behalf of the present
(v) Once the Agreement to Sell dated 3.8.2010 is an admitted document and relied upon by the plaintiff itself, and this agreement to sell is to be taken as final for containing the terms and conditions of the right of preemption between Sh.M.K.Jalan and defendant no.1/Company acting through Sh.Vinay Maloo, it cannot be argued by the plaintiff in view of the provisions of Sections 91 and 92 of the Act that the Agreement to Sell dated 3.8.2010 signed by Sh.M.K.Jalan is not in his individual capacity and that Sh.M.K.Jalan was in fact acting for and on behalf of the plaintiff/Company in this case. Also, in the facts of the present case, there is no scope for applicability of the second proviso to Section 92 of the Act as there is no silence in the Agreement to Sell dated 3.8.2010 of the person who has the right of pre-emption as it is clearly mentioned in the Agreement to Sell dated 3.8.2010 that the right of preemption is of Sh.M.K.Jalan and not anybody else.”
17. The appeal is accordingly dismissed but without any order as to cost. (PRADEEP NANDRAJOG) JUDGE (YOGESH KHANNA)
JUDGE JANUARY 25, 2017 rk