IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA. RFA No.21 of 2001. Judgment reserved on:08.07.2008 Date of Decision: July 16, 2008 M/s.Amar Promotors Pvt. Ltd. …Appellant. Versus State of H.P. & Ors. …Respondents. Coram The Hon’ble Mr. Justice Kuldip Singh, Judge Whether approved for reporting?1 For the appellant : Mr Balwant Singh, vice Mr.K.D.Sood, Advocate. For the respondents : Mr A.K.Bansal, Addl.A.G. Kuldip Singh, Judge. The plaintiff has filed the present appeal against the judgment, decree dated 29.12.2000 passed by learned Additional District Judge, Solan in CS No.3-S/1 of 1999 dismissing the suit of the plaintiff for specific performance, declaration and permanent prohibitory injunction. 1 Whether reporters of Local Papers are allowed to see the Judgment? …2… 2. The brief facts, as per pleaded case of the appellant – plaintiff, are that the appellant is a company registered under the Companies Act. The respondents had allotted plots No.6 and 7 along with sheds constructed thereon to M/s.Him Pack, Chambaghat. The area of the plots is 953 square meters and there exist two sheds, toilets and constructed portion alongside the sheds (for short ‘the suit property’). M/s.Him Pack merged with appellant vide notification No.US.2-2/(4)De- Regn-1400 issued by Industries Department, District Industries Centre, Solan published in Rajpatra dated 26.7.1997 with assets and liabilities. 3. On 18.6.1994 predecessor of appellant came to know that the plots along with constructed structures were being sold to the occupiers on hire purchase basis. In these circumstances, predecessor of appellant applied for purchasing the suit property on hire purchase basis. The respondent No.3 vide letter dated 13.6.1996 informed the appellant that respondent No.1 had agreed to allot the suit property to appellant under hire purchase. The respondent No.3 through the offer dated 13.6.1996 fixed the hire purchase amount Rs.3,28,024. The respondent No.3 demanded Rs.32,803 towards the first installment of the hire purchase amount, besides other charges. 4. The appellant accepted the offer dated 13.6.1996 and deposited a sum of Rs.32,803 on 25.6.1996. The respondent No.3 on 18.4.1998 issued a ‘no objection certificate’ in favour of appellant. The appellant always remained ready and willing to perform its part of the contract and even remained ready to pay the hire purchase amount in lump sum. The respondents had no right to keep the matter pending for unlimited time when they had received one installment of hire purchase. …3… The appellant had written many letters to respondents but respondents had delayed the execution of hire purchase agreement. 5. The appellant had applied on 2.11.1996 to respondents for sanction of plans for carrying out some constructions which were urgently needed and required for promotion of industrial activity. The respondent No.3 referred the said map to site Engineer HPSIDC Chambaghat for approval. The site Engineer after sanctioning the plan sent the same to respondent No.3 but despite that respondent No.3 had not responded to the requests of appellant. The respondent No.3 demanded no objection certificate from appellant. The Municipal Committee Solan vide letter dated 29.1.1997 issued a No Objection Certificate, but even thereafter nothing happened. The respondents started making false allegations of construction raised by appellant and threatened the appellant to cancel its allotment. There is no relationship of landlord and tenant after 31.3.1996. The respondents had no right to cancel the allotment which was being enjoyed by the appellant in the capacity of transferee under hire purchase. On these grounds, the appellant filed suit for specific performance directing the respondents to execute the hire purchase deed with further prayer to restrain respondents from dispossessing the appellant from the suit property in any manner. The appellant has also prayed that respondents be restrained from interfering in the suit property in any manner. 6. The suit was contested by respondents by filing written statement in which preliminary objections of maintainability, lack of notice under Section 80 CPC, locus standi, estoppel, necessary parties and concealment of material facts have been taken. On merits, it has been …4… pleaded that respondents had constructed sheds No.6 and 7 in industrial estate Chambaghat having built up space about 346 square meters. The tenancy / lease of these sheds along with open area measuring about 607 square meters was given to M/s.Him Pack by respondents on monthly rent basis. M/s.Him Pack had merged with appellant as per acknowledgement of respondent No.3 dated 27.6.1997 subject to certain terms and conditions. An amount of Rs.7821 as rent / interest and an amount of Rs.477 as maintenance charges were due from appellant which were received by respondent No.3 on 19.7.1999 and 30.7.1999. It has been admitted that M/s.Him Pack had opted for hire purchase scheme of sheds on 18.6.1994. It has been denied that amount of Rs.32,803 was deposited / submitted by appellant with respondent No.3 as claimed by appellant. The no due certificate dated 18.4.1998 was issued to appellant as the appellant had paid all outstanding rent till the issuance of no due certificate. The hire purchase cost of sheds was worked out as per formula approved by respondent No.1 and intimated to M/s.Him Pack on 13.6.1996. The respondents never accepted, received any installment of hire purchase amount from appellant or M/s.Him Pack. The appellant raised unauthorized construction on the suit property and for that purpose many notices were issued to the appellant. It has been stated that no hire purchase agreement was executed with any of the allottee in the State and all the sheds continued to be on monthly rent basis. The respondents denied the claim of the appellant. The appellant filed replication and reiterated its case set up in the plaint. On the pleadings of the parties, following issues were framed:- …5… i) Whether the plaintiff is entitled to relief of specific performance, declaration and permanent prohibitory injunction, as alleged? OPP ii) Whether the suit is not maintainable in the present form and shape, as alleged? OPD iii) Whether the suit is bad for want of legal notice under Section 80 CPC, as alleged? OPD iv) Whether the plaintiff has no locus standi to file and maintain the present suit, as alleged? OPD v) Whether the plaintiff is estopped from filing the present suit for its own act, conduct, deed and acquaintances, as alleged? OPD vi) Whether the suit is bad for non-joinder of necessary parties and liable to be dismissed, as alleged? OPD vii) Whether the suit is pre-mature and the plaintiff has suppressed the material facts from the Court and has not approached the Court with clean hands and the suit deserves dismissal, as alleged? OPD viii) Relief. The learned Additional District Judge dismissed the suit, hence, this appeal by the plaintiff. 7. I have heard Mr.Balwant Singh, Advocate appearing on behalf of Mr.K.D.Sood, learned counsel for the appellant, learned Additional Advocate General on behalf of the respondents and gone …6… through the record. On behalf of the appellant it has been submitted that the respondents vide letter dated 13.6.1996 Ext.PW-1/B had offered leased out sheds in Industrial Estate Solan to M/s.Him Pack on hire purchase basis. This offer was accepted by M/s.Him Pack and even paid a sum of Rs.32,803 for purchasing industrial sheds No.6 and 7 on hire purchase basis. The respondents have not executed hire purchase agreement despite acceptance of offer to purchase sheds No.6 and 7 on hire purchase basis, even though appellant remained ready and willing to perform its part of the contract. In these circumstances, the suit was filed. The learned Additional Advocate General has supported the impugned judgment, decree and has submitted that the appellant has failed to make out any case for specific performance. He has submitted that learned Additional District Judge has rightly dismissed the suit. 8. PW-5 Virender Aggarwal has stated that M/s.Him Pack had merged in Amar Promoters. He has stated that respondents had offered to sell the suit property on the basis of hire purchase for a consideration of Rs.3,28,024 vide Ext.PW-1/A and Ext.PW-1/B. The first installment of Rs.32,803 after accepting the offer of the respondents was paid vide Ext.PW-2/A. The merger of M/s.Him Pack with appellant was permitted by respondents vide Ext.PW-1/C. He has stated that Jitender Aggarwal was partner in M/s.Him Pack. In cross examination, he has stated that nothing in writing was prepared with the department for hire purchase. 9. Ext.PW-6/A is the partnership deed dated 18.4.1992 of M/s.Him Pack, 6-7 Industrial Estate, Chambaghat, Solan. The case of the appellant is that M/s.Him Pack applied for purchasing suit property on hire purchase basis on 18.6.1994. It is also the case of the appellant that …7… M/s.Him Pack merged with appellant and such merger was notified by Industries Department vide notification which was published in Rajpatra on 26.7.1997. Ext.PW-1/C is the letter dated 6.5.1997 vide which permission for merger of M/s.Him Pack with appellant was granted. The respondents in the written statement have pleaded that merger of M/s.Him Pack with appellant was subject to certain terms and conditions. In fact perusal of Ext.PW-1/C would show that before merger of M/s.Him Pack certain conditions were to be fulfilled by M/s.Him Pack and one of such condition was that M/s.Him Pack was to execute supplementary rent agreement of sheds but execution of such supplementary rent agreement in terms of Ext.PW-1/C has not been proved on record. According to the appellant, M/s.Him Pack applied for purchasing the property on hire purchase on 18.6.1994 and respondent No.3 vide letter dated 13.6.1996 Ext.PW-1/B informed M/s.Him Pack that respondent No.1 agreed to allot the suit property to M/s.Him Pack on hire purchase basis. M/s.Him Pack accepted the offer Ext.PW-1/B and deposited the first installment of Rs.32,803 on 25.6.1996 vide Ext.PW-2/A. The question is on what terms and conditions merger of M/s.Him Pack took place with appellant. It is not the case of the appellant that respondents directly offered to sell the suit property to appellant under hire purchase. The appellant has based the suit on the basis of alleged offer of respondents to sell the suit property to M/s.Him Pack on hire purchase basis. In these circumstances, the appellant was required to prove that on what terms the merger of M/s.Him Pack took place with the appellant. PW-5 Virender Aggarwal has nowhere stated that it was the term of merger that after merger appellant would be entitled to proceed further …8… with respect to the hire purchase of the suit property for which steps were already taken by M/s.Him Pack on 18.6.1994. PW-5 has also not stated that it was the term of the merger between Him Pack and the appellant that appellant would pursue the hire purchase of suit property with respondents on the basis of Ext.PW-1/B dated 13.6.1996. The appellant is a company and M/s.Him Pack was registered firm and, therefore, two separate concerns. It has not been proved that M/s.Him Pack assigned its rights in favour of appellant for purchasing suit property in terms of hire purchase scheme. In these circumstances, it was incumbent upon the appellant to prove the terms and conditions on the basis of which M/s.Him Pack merged with the appellant. Therefore, appellant has failed to prove its entitlement for a direction to the respondents to execute hire purchase deed of the suit property. 10. The appellant has heavily relied on document Ext.PW-1/B (Ext.PW-1/B2). The perusal of Ext.PW-1/B would show that Department of Industries, Himachal Pradesh Government had taken decision vide letter dated 20.9.1995 to offer the sheds in industrial estate/area on hire purchase basis. In the letter it has also been stated that the Government has directed to realize the rent from 31.3.1996 to the date of hire purchase agreement. Accordingly, the hire purchase amount of shed Rs.3,28,024 was calculated. The first installment of hire purchase amount was Rs.32,803. In Ext.PW-1/B dated 13.6.1996 request was made to clear the outstanding dues so that hire purchase agreement could be sent to Government for signatures. Ext.PW-1/B is just an intimation to M/s.Him Pack. The decision of the department is dated 20.9.1995, therefore, in absence of decision dated 20.9.1995 it cannot be …9… said that on what terms the department had offered to sell the property on hire purchase basis. The hire purchase agreement normally contains many conditions. There is another aspect of the case, the letter dated 20.9.1995 referred in Ext.PW-1/B indicates some decision of the Department of Industries. The contract on behalf of the State can be entered into as per Article 299 of the Constitution. In absence of tracing of authority in consonance with Article 299 of the Constitution for issuing letter dated 20.9.1995 it cannot be said that Ext.PW-1/B has legal force and, therefore, even if in compliance to Ext.PW-1/B some amount was deposited vide Ext.PW-2/A, the respondents cannot be directed to execute hire purchase deed on the basis of Ext.PW-1/B and Ext.PW-2/A. The letter Ext.PW-1/B further shows that rent from 31.3.1996 to the date of hire purchase agreement was to be paid. This letter further states that for those who had not given option before 31.12.1987 the cut of date for calculating hire purchase amount would be last day of financial year immediately preceding the signing of hire purchase agreement. According to the appellant, the option to hire purchase on hire purchase basis was given by M/s.Him Pack on 18.6.1994. Therefore, in terms of Ext.PW-1/B the rent was to be calculated from 31.3.1996 till the last day of financial year immediately preceding the signing of hire purchase agreement. In the present case, admittedly, no hire purchase agreement has been signed, therefore, how hire purchase amount of the suit property amounting to Rs.3,28,024 in Ext.PW-1/B has been calculated that has not been made clear. The calculation of hire purchase rent amounting to Rs.3,28,024 in Ext.PW-1/B is apparently wrong. Therefore, …10… Ext.PW-1/B suffers from vagueness and on the basis of Ext.PW-1/B the appellant is not entitled to specific performance. 11. The appellant is otherwise not entitled to discretionary relief of specific performance in view of the fact that according to the appellant M/s.Him Pack on 18.6.1994 took steps for purchasing suit property on hire purchase basis. In Ext.PW-1/B the reference of letter dated 20.9.1995 of the Department of Industries has been given where a decision was taken to offer the sheds in industrial estate / area on hire purchase basis. When the decision is of 20.9.1995 on what basis M/s.Him Pack had taken steps for purchasing the suit property on the basis of hire purchase on 18.6.1994 that has not been explained. According to the appellant, the offer was made to M/s.Him Pack vide Ext.PW-1/B for purchasing suit property on hire purchase basis. M/s.Him Pack deposited first installment amounting to Rs.32,803 vide Ext.PW-2/A on 25.6.1996. The suit was filed on 15.6.1999. The respondents have taken the stand that in the entire State no shed has been sold on hire purchase basis though at one point of time some decision was taken for selling the sheds in the industrial estates on hire purchase basis. On these grounds also, the appellant is not entitled to specific performance. 12. The appellant in the suit has also prayed permanent prohibitory injunction restraining the respondents from interfering in its possession. The appellant in the plaint has pleaded that appellant is a transferee of suit property on the basis of hire purchase and not a tenant. There is no worth believing evidence on record that respondents are interfering in the possession of the appellant. The writing of some letters by the respondents to the appellant does not amount to interference …11… unless actual interference in the possession of the appellant has been proved. There is no worth believing evidence on record that respondents are interfering in the possession of the appellant, therefore, appellant is not entitled to decree of permanent prohibitory injunction. 13. No other point was urged. 14. The result of above discussion, the appellant has failed to make out any case for interference. Accordingly, the appeal fails and is dismissed. July 16, 2008 ( Kuldip Singh ), J. (soni) …12…