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Petitioner: VIDUR IMPEX AND TRADERS PVT. LTD. and others VS Respondent: TOSH APARTMENTS PVT. JUDGMENT
Court Name: Supreme Court of India Judge(s): Sudhansu Jyoti Mukhopadhaya, G. S. Singhvi Title:VIDUR IMPEX AND TRADERS PVT. LTD. and others vs TOSH APARTMENTS PVT.
JUDGMENT
Reported As: 2013 SCMR 602 Result: Appeals dismissed Judgment JUDGMENT ' G. S. SINGHVI, J.---Leave granted. 2. Whether Messrs Vidur Impex and Traders Pvt. Ltd., and five other companies (hereinafter described as the appellants), who are said to have purchased the suit property, i,e, 21, Aurangzeb Road, New Delhi in violation of the order of injunction passed by the learned single Judge of the Delhi High Court are entitled to be impleaded as parties to Suit No,425 of 1993 filed by respondent No,1 - Messrs Tosh Apartments Pvt. Ltd. Is one of, the two questions which arises for consideration in these appeals filed against judgment dated 20-2-2009 of the Division Bench of the Delhi High Court. The other question which needs consideration is whether the Delhi High Court was justified in appointing a receiver with a direction to take possession of the suit property despite the fact that the Calcutta High Court had already appointed a receiver at the instance of Messrs Bhagwati Developers Pvt. Ltd. (for short, `Bhagwati Developers'). 3. The suit property was leased by the Secretary of State for India to Sidh Nath Khanna, and Sukh Nath Khanna sometime in 1930. After 12 years, the Governor General in Council sanctioned the grant of perpetual lease in favour of one of them, namely, Sidh Nath Khanna. In the family partition which took place in December 1955, the suit property fell to the share of Shri Devi Prasad Khanna, who was one of the heirs of Sidh Nath Khanna. He rented out the same to the Sudan Embassy on 12-9-1962. In October 1977, the name of respondent No,2-Pradeep Kumar Khanna (son of Devi Prasad Khanna), who died during the pendency of the litigation before the High Court and is represented by his legal representatives, was entered in the records of the Ministry of Works and Housing, Land and Development Office and the lease was transferred in his name.
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4. In March 1980, respondent No,2 mortgaged the suit property to Shri S.N. Tondon. After 5 years, he entered into a collaboration agreement with Shri Arun Kumar Bhatia (respondent No,3) for construction of a multi-storeyed building. He also executed an agreement for sale in favour of respondent No,3. In November 1987, respondent No,2 took loan from Shri Avtar Singh and created an equitable mortgage in his favour. On 13-9-1988, respondent No,2 executed an agreement for sale in favour of respondent No,1 fora consideration of Rs,2.5 crores. After some time, respondent No,3 executed assignment deed dated 13-12-1988 in favour of respondent No,2. Simultaneously, the parties cancelled the collaboration agreement. After 3 months, respondent No,2 mortgaged the suit property in favour of respondent No,4. In 1992, respondents Nos,2 and 4 entered into an agreement whereby the latter agreed to provide various services including the one that he will get the suit property vacated from the Sudan Embassy and for that he will charge Rs,4 crores. 5. The Sudan Embassy vacated the suit property on 12-5-1992 and handed over possession to respondent No,2, who is said to have handed over the same to respondent No,4. On coming to know about the proposed alienation of property by respondent No,2, respondent No,1 filed Suit No,425. Of 1993 in the Delhi High Court for specific performance of agreement for sale dated 13-9- 1988, award of damages and injunction. It also filed I.A. No,1947 of 1993 under Order XXXIX, Rules 1 and 2, C.P.C. The learned single Judge passed order dated 18-2-1993 and directed that defendants Nos,1 and 3 (respondents Nos,2 and 4 herein) shall not transfer, alienate or part with possession in any manner or create third party rights in respect of the suit property. After receiving summons, respondents Nos,2 and 4 filed I.A. No,10730 of 1993 under Order VII, Rule 11 for rejection of the plaint on the ground that the same was barred by time. The learned single Judge dismissed the application vide order dated 5-4-1994 and directed that interim order dated 18-2-1993 shall continue. 6. On 19-2-1997, respondent No, 2 executed 6 agreements for sale in favour of the appellants for a total consideration of Rs,2.88 crores. In furtherance of those agreements, six sale deeds were executed and registered on 30-5-1997. In the meanwhile, the appellants executed agreement for sale dated 18-3-1997 in favour of Bhagwati Developers for a consideration of Rs,4.26 crores and received Rs,3.05 crores. 7. At that stage,. Respondent No,1 filed I.A. No,8145 of 1998 for restraining respondents Nos,2 and 4 from handing over possession of the suit property to any other person. Respondent No,2 contested the application by asserting that he had not executed any sale deed in favour of the appellants and that possession of the suit property' had already been handed over to respondent No,4. Thereupon, respondent No,1 filed C.C.P. No,118 of 1998 under Order XXXIX, Rule 2A, C.P.C. With the allegation that the non-applicants including the appellants herein had entered into a conspiracy for the purpose of grabbing the property in violation of the order of injunction passed by the High Court. The learned single Judge entertained the contempt petition against respondents Nos,2 and 4 but declined to do so qua the appellants by observing that no prima facie case had been made out against those who were not parties to the suit. Respondent No,1 also filed I.A. No,8146 of 1998 under Order XXVI, Rule 9 read with Order XXXIX, Rule 7 and section 151, C.P.C. For appointment of Local Commissioner and I.A. No,8147 of 1998 under Order XL, Rule 1 read with section 151, C.P.C. For appointment of a receiver. The Court Commissioner appointed by the High Court to ascertain whether respondents Nos,2 and 4 were in possession of the suit property, submitted report dated 10-2-2000 with the finding that respondent No,4 was in actual possession. 8. Respondent No,2 filed application dated 16-12-1998 for vacating interim order dated 18-2-1993. He pleaded that the agreement for sale executed in favour of respondent No,1 was, in fact, a loan agreement and the same was violative of section 24 read with section 23 of the Indian Contract Act, 1872. He -further pleaded that the agreement was void and unenforceable because the requisite permission had not been obtained under section 269, U.C. Of the Income-tax Act.
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Respondent. No,2 also filed Suit No,161 of 1999 for grant of a declaration that sale deeds executed in favour of the appellants were fictitious and were not binding on him. After abouf 2 years, Shri Bhupinder Singh, Advocate filed I.A. No,255 of 2001 for withdrawal of the suit on the ground that the parties have amicably settled their dispute. Soon thereafter, the advocate who had instituted the suit, filed I.A. No,1537 of 2001 for restoration of the suit by asserting that I.A. No,255 of 2001 had been filed by an advocate who was not authorised to do so. The learned single. Judge directed that the application be listed only after filing of an affidavit by respondent No,2 that he had not authorised Shri Bhupinder Singh, Advocate to file I.A. No,255 of 2001. Respondent No,2 did not file the required affidavit till his death and as a result, I.A. No,1537 of 2001 is said to be still pending. 9. Another front of litigation was opened by Bhagwati Developers with the allegation that the appellants have failed to execute the sale deed in terms of agreement dated 18-3-1997. The dispute between Bhagwati Developers and the appellants was referred to the sole arbitration of Dr. Debasis Kundu, an Advocate of the Calcutta High Court. The Arbitrator passed award dated 7-1- 1999 and directed the appellants to hand over vacant possession of the suit property along with the building to Bhagwati Developers on or before 31-1-1999 and also execute the sale deed after securing requisite permission and no objection certificate from the competent authorities. Simultaneously, Bhagwati Developers was directed to pay the balance amount of Rs,1,20,90,000. 10. As the appellants failed to act in consonance with the arbitral award, Bhagwati Developers filed an application under section 36 of the Arbitration and Conciliation Act, 1996 in the Calcutta High Court, which was allowed by the learned single Judge of that High Court vide order dated 17-8- 2000 and a direction was issued to the appellants to comply with the arbitral award. The learned single Judge also appointed Shri Nar Narayan Ganguli, Advocate as receiver and directed him to take possession of the suit property. When the receiver came to Delhi for execution of the award, respondent No,4 refused to hand over possession. Thereupon, the Calcutta High Court directed the police authorities at Delhi to assist the receiver for ensuring compliance of order dated 17-8-2000. Armed with that direction, the receiver visited Delhi on 19-1-2001 and 5-2-2001 and took symbolic possession of the suit property by putting locks and seals on all the inner and outer gates. 11. When the representative of respondent No,1 learnt about the award of the arbitrator and the order passed by the. Calcutta High Court, he filed I.A. No,625 of 2001 in the Delhi High Court under Order XXXIX, Rules 1 and 2 read with section 151, C.P.C. Impleading respondent Nos, 2 and 4, the appellants and Bhagwati Developers as parties and prayed that respondents Nos,2 and 4 be restrained from handing over possession of the suit property and that the appellants be restrained from taking forcible possession in the garb of some order passed by the Calcutta High Court: The learned single Judge of the Delhi High Court passed an ex parte interim order dated 22-1-2001 and restrained respondents Nos,2 and 4 from delivering possession of the suit property to the appellants and also restrained the latter from taking possession. Bhagwati Developers challenged that order in FAO (OS) No,90 of 2001, which was dismissed by the Division Bench of the High Court on 2-3-2001 with liberty to approach the learned single Judge for appropriate order. 12. Respondent No,4 also filed I.A. No,1211 of 2001 in the Delhi High Court for grant of injunction by alleging that an attempt is being made to dispossess him in the garb of an order passed by the Calcutta High Court. The learned single Judge passed ex parte interim order dated 8-2-2001 and restrained the appellants, Bhagwati Developers, the receiver appointed by the Calcutta High Court and Delhi Police from interfering with the possession of respondent No,4. Some of the observations made in that order, which have bearing on the disposal of these appeals, are extracted below:- "Quite clearly respondents Nos,4 to 9 in this application were aware of the fact that defendant No,1 had filed Suit No,161 of 1999. A mention was made in the plaint in Suit No,161 of 1999 that the present suit, that is, Suit No,425 of 1993 was pending in this Court. So, respondents Nos,4 to 9 in this application were also aware of the pendency of this suit. It appears that respondents Nos, 4 to 9 in
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this application did not bother to find out the correct factual position with regard to the possession of the suit property or with regard to the interim orders passed by this Court. ' Well before all this, and apparently expecting defendant No,1 to perform the agreement to sell, these 6 persons who are respondents Nos,4 to 9 in this application entered into an agreement to sell the suit property to respondent No,10 in this application. ' There appear to have been some disputes between respondents Nos,4 to 9 in this application and respondent No,10 in the application in respect of the suit property. Since there was an arbitration clause in the agreement between them, they referred the matter to arbitration. The learned Arbitrator gave an Award dated 7th January, 1999 wherein he directed respondents Nos,4 to 9 in this application to hand over peaceful vacant possession 'of the suit property to respondent No,10 in this application. No objections appear to have been filed to this Award with the result that respondent No,10 in this application filed proceedings in the Calcutta High Court praying for a direction for the appointment of a Receiver to take physical possession of the suit property. The Calcutta High Court-passed an order apparently directing the Receiver to take possession of the suit property. On 13th December, 2000 the Calcutta High Court directed the police authorities to render all assistance to the Receiver to take steps in accordance with the earlier order passed by the Calcutta High Court. ' When the Receiver and the police authorities came to take possession of the suit property, L.K. Kaul became aware of the proceedings in the Calcutta High Court. It is submitted that there has been gross concealment and misrepresentation of facts by defendant No,1 in the suit to respondents N'os.4 to 9 in this application. There has also been gross misrepresentation and concealment of fact by respondents Nos,4 to 9 in this application to respondent No,10 in this application. It is also submitted that there is also a gross concealment and, therefore, a misrepresentation of facts by respondents Nos,4 to 10 in this application insofar as the learned Arbitrator is concerned. Consequently, there has also been a gross concealment and, therefore, a misrepresentation of the facts so far as Calcutta High Court is concerned. It is submitted that had all these facts been brought to the notice of the concerned parties as well as to the learned Arbitrator and the Calcutta High Court, there would have been no question of any appointment of a Receiver in violation of the orders passed by this Court on 18th February, 1993 read with order dated 31st January, 2000. I am prima facie satisfied that defendant No,1 and respondents Nos,4 to 10 in this application are playing a cat and mouse game with this Court. There has been a serious concealment and misrepresentation of facts by defendant No,1 in this suit. There has also been a serious concealment and misrepresentation of facts by respondents Nos,4 to 9 in this application insofar as respondent No,10 in this application is concerned. Respondents Nos,4 to 10 are at fault in not finding out what the correct facts are and making necessary enquiries in this regard. They appear to have deliberately misled the learned Arbitrator and the Calcutta High Court." (Emphasis supplied) .13. Respondent No,4 filed another application (I.A. No,9576 of 2001) for restraining the appellants from executing the sale deed in favour of Bhagwati DevelopeRs, The learned single Judge entertained the application and passed interim order in terms of the prayer made. The same respondent filed an application in E.C. No,10 of 2000 pending before the Calcutta High Court and brought to the notice of that High Court, order dated 8-2-2001 passed by the Delhi High Court in Suit No,425 of 1993. After taking cognizance of the rival submissions, the learned Judge of the Calcutta High Court passed order dated 15-2-2001 and made it clear that the order passed by that Court will be subject to the order which may be passed by the Delhi High Court. The relevant portions of that order are reproduced below:-
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"The facts remain that these facts were neither disclosed to the decree-holder nor to the Arbitrator and this question was not necessary to be gone into while executing the decree and, as such, it was also not placed before this Court and this Court having not been apprised of such facts had passed an order for taking over possession of the property. In the order dated 8-2-2001 the Delhi High Court had taken a note of this position. Be that as it may, it is not necessary to make any observation with regard. To the findings made therein, nor this Court can comment on the order passed by another Court on the basis of the materials placed before it. But it appears that there is every possibility of conflicting orders being passed in respect of the self-same properties between the parties or those claiming through one or the other of them by two High Courts. Judicial propriety demands that the court should maintain its decorum and dignity and should not pass any order which will lie in conflict with each other. It is the parties who may fight each other but not the Courts. If some order is passed, it is expected that another Court should pay proper regards and respect to such order. Since it is pointed out that these facts were not disclosed before this Court, therefore what would have been the effect if these facts would have been disclosed before this Court is a question which cannot now be presumed, but in all probabilities it sees that if these facts were disclosed before this Court, this Court might have been slow in passing the order that had been passed earlier. Therefore, the order passed by this Court, if it is in conflict with the order passed by the Delhi High Court, the same shall always be subject to the order that might be passed by the Delhi High Court. ' Since Delhi High Court has also passed an order by which certain direction was given to the Receiver appointed by this Court, therefore, it is no more necessary to pass any further order. In my view, the decree-holder in this proceedings who is added as defendant No,10 in the Delhi High Court suit should approach the Delhi High Court for obtaining the appropriate orders if he is so advised. If there is a conflict of decree which might affect a proceeding in another High Court, in that event the same has to be thrashed out in an appropriate proceeding. It is very difficult to enter into such question in an execution proceeding unless such question be raised in a proceeding under Order XXI, Rule 97, C.P.C. From the records of this Court, it does not appear that any such application under Order XXI, Rule 97 has ever been made in order to enable the parties to resist possession in execution of the decree, so that they would have an opportunity to place their cases about the executability of the decree against them." (Emphasis supplied) 14. Thereafter, Bhagwti Developers filed I.A. No,2268 of 2003 in Suit- No,425 of 1993 pending before the Delhi High Court with the prayer that the receiver appointed by the Calcutta High Court be continued. Respondent No,1, Who had already filed I.A. No,8147 of 1998 for appointment of receiver, contested the application of Bhagwati Developers by asserting that it had no locus standi in the matter because the agreement by which it purchased the property from the appellants was fraudulent in nature. Respondent No,1 also reiterated its prayer for appointment of a receiver by the Delhi High Court by contending that respondent No,4 was a ranked trespasser and there was every possibility of his entering into clandestine deals and alienating the property. On his part, respondent No,4 pleaded that his possession was lawful because respondent No,2 had put him in possession in furtherance of the agreement executed in 1992. 15. At this stage, we may mention that respondent No,4 also filed I.A. No,7373 of 2006 in Suit No,425 of 1993 for grant of leave to amend the written statement by incorporating the fact that respondent No,2 had agreed to pay Rs,4 crores as service charges for getting the property vacated from the Sudan Embassy with a stipulation that in the event of non-payment of the amount, vacant and peaceful possession of the suit property will be handed over to him; that even though he got the property vacated from the Sudan Embassy, respondent No,2 did not pay the amount and handed over possession of the property as security for the same. Respondent No,4 claimed that these facts could not be incorporated in the original written statement because his earlier lawyer thought that
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the same were not necessary for deciding the suit filed by respondent No,1 for specific performance and permanent injunction. Respondent No,4 also sought incorporation of the fact that the property had been mortgaged to him and he was in possession as a mortgagee. Respondent No,1 opposed the prayer for amendment by asserting that respondent No,4 was seeking to make out a new case which was contrary to the defence set up in the original written statement. 16. By an order dated 3-9-2007, the learned single Judge of the Delhi High Court dismissed I.A. No,2268 of 2003 and I.A. No,7373 of 2006 and allowed I.A. No,8147 of 1998. He first considered the applications filed by respondent No,1 and Bhagwati Developers in the matter of appointment of receiver and held:-- "26. Undoubtedly the initial agreement to sell is between the plaintiff and defendant No,1 (since deceased) now being represented by his legal heiRs, However, yet another agreement to sell come into existence on 18th March, 1977 between 13hagwati Developers Private Limited and respondents 4 to 9 by which 6 companies agreed to sell the said property in favour of Bhagwati Developers with arbitration clause contained in the agreement and that dispute shall be subject to the jurisdiction of Calcutta High Court. The Court fails to understand as to how the dispute relating to immovable property which is situated in Delhi could be taken to Calcutta for adjudication by completely bye passing the provisions of section 16 of the Code of Civil Procedure. It is also evident on record that defendant No,3 who is currently in possession does not enjoy the status either of licensee or of lessee nor he is there any other capacity with the consent of either of the parties. He is simply holding over the possession once upon a time he was given the task of getting of Sudan Embassy. Vacated. This Court really wonder about the sanctity of such kind of agreements as executed between the plaintiff and defendant No,3 and between defendant No,1 and defendant No,3 for the purpose of getting the Sudan Embassy vacated. Rent Control laws seem to have been thrown to the winds. Task is taken by individual to get the premises vacated from Sudan Embassy and that too for consideration. I am afraid if such an agreement has a legal sanctity. That being so the possession of defendant No,3 cannot be termed as legal in the suit property. If at all his service charges were not paid he has the legal remedy either with the plaintiff or defendant No,l. Under no law he can be permitted to retain the possession of the property. Therefore in any case he has to go out of the property he being stranger to the shit property having no title or interest of any nature. Learned counsel for the plaintiff has also been able to establish by way of various authorities referred to above that it is a fit case where Receiver should be appointed for the management of the property who can manage the affairs of the suit property under the supervision of the Court as there is every likelihood that in the eventuality of not appointing the Receiver there is strong likelihood of the property being usurped in a clandestine manner so as to frustrate the claims of the rightful claimant. Even otherwise not appointing the Receiver at this juncture might lead to multifarious litigation. 27. Therefore in order to prevent all these wrongs and further damage and waste to the property, appointment of Receiver has become essential so as to preserve the property. Therefore, Sh. Rajesh Gupta, Advocate is hereby appointed as Receiver. His fee is fixed at Rs,50,000 initially subject to revision, depending on the quantum of work he might have to undertake while acting as Receiver to be paid by the plaintiff. He will manage the affairs of the suit property by removing defendant No,3 from the suit property. If need arise, he may take the assistance of the police, to thwart any resistance and also may break open the locks of the property and make an inventory of the goods lying therein. If he required to do any work in respect of the property like maintenance, he shall seek prior permission from the Court. This application is accordingly allowed. 28. This order shall also take care of the application of Bhagwati Developers Pvt. Ltd. Proposed defendant No, 10 wherein while treating the possession of defendant No,3 as unlawful possession in
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the suit property has sought directions from this court that the Receiver appointed by the High Court of Calcutta be continued and the possession of the property be handed over to him who should retain the property in his possession as in the capacity of Receiver. I may state that when the matter was taken to Calcutta High Court between six alleged transferees and Bhagwati Developers Pvt. Ltd., the Calcutta High Court in its order dated 13th February, 2001 clearly indicated that the decree passed by the Calcutta High Court if comes in conflict with the order passed by Delhi High Court, the same shall always be subject to the order…
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