IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA RFA No. 179 of 2003 Reserved on: 12.11.2009 Date of decision: 17.12.2009 Smt. Rajeshwari Devi & Others ……………Appellants Versus M/s Hotz Industries Ltd. ……………Respondent Coram The Hon’ble Mr.Justice V.K. Ahuja, J. Whether approved for reporting?1No. For the appellants : Mr. Bhupender Gupta, Senior Advocate with Mr. Neeraj Gupta and Mr. Janainder Mittal, Advocates. For the respondent : Mr. Pravir K. Jain and Ms. Archna Jain, Advocates. V.K. Ahuja, J. This is an appeal filed by the appellants/defendants against the judgment and decree of the learned District Judge, Solan dated 17.6.2003 for setting aside the same vide which the suit for specific 1 Whether the reporters of the local papers may be allowed to see the Judgment? 2 performance and injunction filed by the respondent as against the appellants was decreed. Briefly stated the facts of the case are that the plaintiff company had filed a suit against the defendants for the relief of specific performance with a consequential relief of injunction. It was alleged that the plaintiff is a company duly registered under the Companies Act and is engaged in the business of manufacturing, trading and running of hotels. The suit was filed through Shri Arun Kumar Jain, Joint Managing Director of the Company, who had been authorized vide resolution to file the present suit. The plaintiff alleged that the defendant No. 1 is a HUF of which Shri Krishan Kumar is “Karta” after the death of his father Shri Mam Raj Aggarwal. The defendants No. 2 to 7 are the wife, sons and daughter of late Shri Mam Raj Aggarwal, who was earlier “Karta” of M/s Mam Raj & Sons (HUF). It was alleged that Shri Mam Raj Aggarwal was the absolute and exclusive owner of all properties comprised in survey No. 50-C in the cantonment area Kasauli. He was also owner of the properties in survey No. 50-B in the aforesaid Cantonment area. The said Mam Raj Aggarwal had 3 executed a memorandum of understanding with plaintiff on April 13, 1992 for sale of aforesaid properties together with the building and structures etc. The sale was followed by an agreement to sell dated 24.12.1992 executed by said Shri Mam Raj Aggarwal with the plaintiff company for the sale of the suit properties. The property in survey No. 50-C in its entirety and a portion of the property comprised in survey No. 50-B has been under the tenancy of plaintiff for a long time on a consolidated yearly rent of Rs. 6,000/-. The plaintiff had been carrying on the business of hotel in the said premises. It was further alleged that vide agreement dated 24.12.1992, the plaintiff agreed to purchase the said property for a sale consideration of Rs. 8,35,000/-. The plaintiff paid the part of the consideration as under:- Rs. 5100 in cash on April 13, 1992, Rs. 44,900/- by way of demand draft dated 14.6.1992, Rs. 75,000/- by way of demand draft dated 9.12.1992 and thus, a total sum of Rs. 11,25,000/- had been paid by plaintiff as part payment. It was further agreed in between the parties that the plaintiff shall pay the 4 balance sale price of Rs. 7,10,000/- at the time of execution and registration of Conveyance Deed and the defendant was to obtain the no objections etc. to effect the sale deed till the property is mutated in the name of the plaintiff. An application dated 26.12.1992 was moved with the defence authorities alongwith the draft conveyance deed which was initialed by the parties for grant of permission for sale of the property in favour of the plaintiff. The Special Power of Attorney appointed earlier died and a new power of attorney was appointed for the purpose of expediting grant of requisite permission and to obtain no objection certificate etc. It has further alleged that the said executant Shri Mam Raj Aggarwal died on 25.2.1994 leaving behind his wife and five sons and thereafter Shri Krishan Kumar, the eldest son of Shri Mam Raj Aggarwal became the Karta of HUF. The application was presented by the said Karta for mutation of the said properties and all the legal heirs of late Shri Mam Raj Aggarwal gave admission deed and relinquishment deed that they had no objection to the mutation being carried out in favour of Shri Krishan Kumar as Karta of the said HUF. Meanwhile, permission 5 to sell the property was granted by the defence authorities vide letter dated June 30th/August 31st, 1995. The plaintiff informed the defendants about such permission and wrote to them and the defendants confirmed vide letter dated 9.9.1995 that the mutation of the said property is not necessary and the same property can be directly transferred by all the legal heirs in favour of the plaintiff. A fresh application was submitted to the Income Tax Authorities by the LRs. Thus, it was alleged that the plaintiff was always ready and willing to perform his part of the contract and to pay the agreed price of the property as per agreement to sell dated 24.12.1992 but the property was not sold as agreed and thereafter, the plaintiff filed the suit for specific performance. Defendants contested the suit by raising preliminary objection that the suit was not competent. It was also pleaded that defendant No. 1 was neither Karta nor had a right to represent the alleged HUF. Therefore, the plaintiff was not entitled to the relief claimed by him. It was also pleaded that property in the name of Shri Mam Raj Aggarwal was ancestral property and he had no absolute right to convey the same. They also pleaded that 6 when the property was succeeded by Shri Mam Raj Aggarwal from his father including his two brothers, there was a condition in the Will that the property was not liable to be transferred. The condition was laid down in the said Will. From the pleadings of the parties, the following issues were settled by the Court:- 1. Whether the suit has not been instituted by a proper person, as alleged, if so, the effect thereof? OPP 2. Whether the plaint has not been properly verified, if so, its effect? OPD 3. whether the plaintiff has no legal and enforceable cause of action, if so to what effect? OPD 4. Whether the plaintiff is estopped from filing the suit on account of its act, deeds, conduct and acquiescence, as alleged, if so, its effect? OPD 5. Whether the suit is bad for non-joinder of necessary parties, if so, who are those parties and effect thereof? OPD 6. Whether the plaintiff is not entitled to the relief of specific performance, as alleged, if so, the effect thereof? OPD 7. Whether plaint lacks full and material particulars, if so, its effect? OPD 7 8. Whether Shri Mam Raj Aggarwal entered into an agreement of sale with the plaintiff, as alleged? OPP 9. If issue No. 8 is proved in affirmative, whether Shri Mam Raj had any valid titled to agree to sell the suit property legally to the plaintiff? OPParties. 10. Whether the plaintiff made payments to Shri Mam Raj Aggarwal as advance/earnes money, as alleged? OPP 11. Whether the agreement of sale was irrevocable, as alleged, if so, to what effect? OPP 12. Whether the plaintiff has performed and has always been ready to perform its part of contract alleged? OPP 13. Whether the defendants have committed breach of terms and conditions of the agreement of sale, if so, to what effect? OPP 14. Whether the plaintiff is entitled to the relief of specific performance of agreement? OPP 15. Whether the plaintiff is entitled for any damages and interest at the rate of 18% per annum, if so, to what amount? OPP 16. Relief. Parties led their evidence and learned trial court vide its impugned judgment decided issue No. 2 redundant, issues no. 1, 3 to 14 in favour of the plaintiff 8 and as against the defendants, issue No. 15 against the plaintiff and in favour of the defendants and consequently decreed the suit of the plaintiff. I have heard the learned counsel for the parties and have gone through the record of the case. The submission made by learned counsel for the appellants was that the deceased had no authority to execute the agreement in question. It was also submitted that in case the deceased was a Karta, HUF should have been arrayed as party in the suit which was not done and, therefore, the property could not have been sold. It was also submitted that no notice was given to the other co-owners before effecting the agreement by the deceased in favour of the plaintiff. It was also submitted that there was no evidence to show that the defendants were having common business and as such, it was not a HUF and the deceased was not competent to execute the sale deed which was accordingly not valid and findings of the learned trial Court which are contrary to the facts are liable to be reversed. 9 On the other hand, learned counsel for the respondent supported the impugned judgment for the reasons given therein supplementing it with the submission that the deceased Shri Mam Raj Aggarwal either as Karta of HUF or in his capacity was the exclusive owner of the suit property and was, therefore, competent to execute the sale deed. It was also submitted that after the death of said Shri Mam Raj Aggarwal the defendants by way of various correspondence had admitted the agreement in question and had been corresponding with the plaintiff and other authorities which clearly show that they had the knowledge of the agreement and had never disputed the correctness of the agreement. Thus, it was submitted that the plaintiff was rightly entitled to the relief claimed by him which was granted in favour of the plaintiff. In regard to the plea that there was a condition in the Will vide which the previous owner inherited the suit property, it was submitted that neither the said Will was ever produced, nor such condition was proved and no presumption can be drawn that there was any such Will containing such stipulation. It was also submitted that right available to the other co-owners, was to file 10 another suit and the defendants themselves had no right to claim any benefit under the said condition, if any. Thus, it was submitted that there is no merit in the appeal, which deserves to be dismissed accordingly. The first question which arises for consideration is in regard to the execution of the agreement by the previous owner Shri Mam Raj Aggarwal vide agreement dated 24.12.1992. It has to be seen as to whether the defendants ever disputed the execution of the said agreement which was executed by Shri Mam Raj Aggarwal as exclusive owner or as Karta and as to whether after his death the defendants ever disputed the competency of the said Karta or owner to execute the agreement or disputed the validity of the agreement in question. Coming to the evidence led by the parties on the above points, the agreement in question dated 24.12.1992 has been proved in evidence as Ext.PW1/5. The plaintiff has also proved two special power of attorneys executed by said Shri Mam Raj Aggarwal Ext.PW1/6 and Ext.PW1/7 in favour of Mr. V. Raghupati and Mr. P.S. Bhatacharya to expedite the matter who 11 appeared to be employees of the plaintiff. The affidavit of Shri Mam Raj Aggarwal has been proved as Ext.PW3/A as well as the permission granted vide letters Ext.PW3/B to Ext.PW3/K. There is nothing on record to show that the said transaction was ever disputed by any of the defendants till March 1997. It is on record that the defendant Krishan Kumar applied for NOC and tax clearance in the month of March 1997 vide letter Ext.PW1/20 as HUF and has also endorsed draft sale deed as Ex.PW1/21. The receipt of a sum of Rs. 5100/- paid in cash to said Shri Mam Raj Aggarwal at the time of signing of memorandum of agreement has been proved as Ext.Pw1/4. The agreement Ext.PW1/5 executed on 24.12.1992 shows that Shri Mam Raj Aggarwal represented himself as sole owner and his affidavit to this effect is Ext.PW1/8. The said Shri Mam Raj Aggarwal died in February 1994. A letter Ext.PW1/9 has been proved written by Shri Krishan Kumar, the eldest son of Shri Mam Raj Aggarwal that he was Karta of HUF and he had also filed an application to the defence authorities in December 1992 for permission to sell the property in dispute which was accorded by the Defence Estate Office. 12 The correspondence took place in between plaintiff and Shri Krishan Kumar, the eldest son of Shri Mam Raj Aggarwal and it was conveyed to the plaintiff that the matter will be settled by all members of family of said Shri Mam Raj Aggarwal which information was sent vide letter Ext.Pw1/13 proved in evidence. A perusal of the letter Ext.PW1/16 dated 29.7.1995 by Shri Krishan Kumar shows that he represented himself as Karta of HUF and also supplied the list of legal heirs of deceased Shri Mam Raj Aggarwal which was accompanied by the death certificate of Shri Mam Raj Aggarwal. It is in the statement of PW1 Arun Kumar Jain that LRs of deceased Shri Mam Raj Aggarwal had assured that by 30.6.1997 they would complete the conveyance deed and requested to send the draft sale deed to them which could be submitted to the Income Tax department to seek the requisite permission which was done and legal heirs of Shri Mam Raj Aggarwal applied for grant of requisite permission from the Income Tax Office, Solan. The copy of the application proved in evidence is Ext.PW1/20 and the copy retained by the plaintiff company is Ext.PW1/21. The same was signed by Shri Arun Kumar 13 Jain PW on behalf of the plaintiff company and defendant No. 1 as Karta of HUF. The evidence in detail led by the parties in this regard has been discussed by the learned trial Court and I have made a reference to the main documents proving the transaction, admission by the defendants, to complete the sale transaction and acknowledgement of the fact that such an agreement was executed in between the previous owner and plaintiff and thereafter, defendants had been taking steps for completion of the transaction. It does not lie in their mouth now once they had been taking steps for completion of the agreement after the death of the previous owner to claim that this agreement was not executed or that the deceased was not Karta of HUF or that he was not competent to execute the agreement in question. The fact remains that the previous owner had signed the agreement as Karta of the HUF and there is nothing on record to show that the property in question was ancestral qua the deceased and that he was not competent to execute the sale deed which position was never challenged by the defendants also at the earliest opportunity. It is also 14 clear that in case the deceased was not Karta of HUF, there was no reason for the eldest son of deceased namely Krishan Kumar to enter into correspondence or represent himself as Karta of HUF. From the facts of the case now it cannot be said that the previous owner Mam Raj was not competent to execute the sale deed as Karta or as exclusive owner. Once he had executed the sale deed and there are no restrictions placed upon his father or his competency proved by the defendants, the legal heirs of the deceased were bound by the agreement in question. Coming to the question that the suit was not filed in the name of HUF it is clear from the plaint that Shri Krishan Kumar has been shown as son of late Shri Mam Raj Aggarwal and it has been mentioned as HUF. All the legal heirs have been made a party and it is not necessary that the suit have been specifically instituted by HUF through the Karta of the family once the eldest son had been shown as HUF and other members have also been impleaded as party. Coming to the condition, if any, in the Will allegedly executed by the previous owner Bakhtavar Mal in favour of Mam Raj, the said Will never saw the light of 15 the day, nor conditions were proved put on the powers of Shri Mam Raj and his brothers who inherited the property not to sell to any persons except by the consent of other co-owners. Once the will in question was not proved, it cannot be said that the property could not have been sold by Shri Mam Raj to the plaintiff. Moreover, it has been rightly submitted that the dispute, if any, could have been raised by the co-owners who inherited the property alongwith Shri Mam Raj i.e. his brothers and not legal heirs of deceased Mam Raj who have been no right vide said agreement which was executed by the previous owner and their predecessor-in-interest. In view of the above discussion, I accordingly hold that the agreement in question stood legally proved and there is no dispute in regard to its execution by the previous owner Shri Mam Raj Aggarwal or the amount of the sale consideration yet to be paid or the part payment made to the deceased Shri Mam Raj Aggarwal as mentioned above. It is also in evidence as per the testimony of PW3 that the plaintiffs were ready and willing to perform their part of the contract and the initial conduct of the defendants also shows that they were 16 ready and willing to perform the contract but subsequently it was not performed which may be due to escalation of the prices that takes place but that does not give any right to the defendants not to execute the sale deed. Therefore, the findings of the learned trial Court on all the issues are liable to be affirmed and plaintiff had been rightly granted the decree of specific performance of agreement dated 24.12.1992. The sale deed shall be executed within the period granted by the learned Trial Court which shall be calculated from today on the conditions mentioned therein. The appeal filed by the appellants is dismissed accordingly. However, the parties are left to bear their own costs. Decree sheet be prepared. (V.K. Ahuja), December 17, 2009. Judge. (vs)