C.R. No.22 of 2007 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.R. No.22 of 2007 Date of Decision:- 23.05.2008 Harsha Associates Pvt.Ltd. ....Petitioner(s) through Mr.Chetan Mittal, Sr. Advocate with Mr.Vishal Garg, Advocate. vs. M/s Techsoft Global Limited ....Respondent(s) through Mr.Ashish Aggarwal, Advocate. *** CORAM:-HON'BLE MR.JUSTICE SURYA KANT. *** 1) Whether Reporters of the local papers may be allowed to see the judgment? 2) To be referred to the Reporters or not? 3) Whether the judgment should be reported in the Digest? *** SURYA KANT, J. (ORAL) This order shall dispose of C.R.Nos.22 and 23 of 2007 as both the cases are inter se parties and have arisen out of the same suit between them. [2] In C.R.No.22 of 2007, the petitioner-defendant impugns the orders dated 19.10.2006 passed by the learned Civil Judge (Jr.Division), Karnal, whereby it has been restrained from alienating the subject property, as well as order dated 19.12.2006 passed by the learned Additional District Judge, Karnal, upholding the aforementioned order. [3] C.R.No.23 of 2007 is directed by the petitioner-defendant against the order dated 22.11.2006 whereby an application under Order 6 Rule 17 CPC of the respondent-plaintiff has been allowed and the suit for permanent injunction has been permitted to be converted into a suit for possession by way of specific performance. C.R. No.22 of 2007 -2- [4] In order to resolve the controversy, a brief reference to the facts may be made. [5] The petitioner-defendant decided to construct a Mall-cum Multiplex Complex in the name and style of 'Harsha Mall' in Sector 12, Karnal. The petitioner-defendant is stated to have entered into an agreement with the respondent-plaintiff on 18.9.2005 for selling out the entire second and third floors along with roof rights of the above-stated property for a total cost of Rs.4,75,00,000/-. There is, however, no denial to the fact that a 'formal agreement' was yet to be executed though the agreed terms and conditions were noted down on a piece of paper which is signed by both the parties. [6] The respondent-plaintiff paid a sum of Rs.11 lacs vide cheque dated 18.9.2005 as a token money to the petitioner-defendant and further agreed to pay 20% of the total consideration on “signing of agreement”. Another 20% was to be paid “after one month of signing of agreement”, 30% was to be paid at the time of possession which was to be delivered by the month of December, 2005 whereas the remaining 30% was to be paid by the respondent-plaintiff at the time of opening of the Cinema i.e. in April 2006. [7] The respondent-plaintiff instituted a suit for permanent injunction on 20.7.2006 inter alia alleging that even when it has been ready and willing to perform its part of the contract and has always been keen to make payments as per the agreed schedule, the petitioner-defendant wants to wriggle out of the binding contract. The petitioner though has admitted the agreement dated 18.9.2005, it has, however, come up with the plea that despite a written notice, the respondent-plaintiff did not turn up to make C.R. No.22 of 2007 -3- payments as per the agreement. [8] The respondent-plaintiff also moved an application under Order 39 Rules 1 and 2 CPC seeking restraint against the petitioner-defendant from alienating the suit property. The aforesaid application was allowed by the learned trial Court and that order has been confirmed by the learned Additional District Judge as well, giving rise to the first revision petition. [9] Both the Courts below have observed that there exists an oral agreement between the parties, the contents of which appear to have been noted down on a piece of paper, on 18.9.2005. The Courts below have further observed that the question as to whether the petitioner-defendant was reluctant to execute the agreement and/or the respondent-defendant did not come forward along with balance payment-is a question of fact to be gone into on the basis of evidence to be led by the parties. The Courts below, however, have observed that in case the petitioner succeeds in alienating the suit property, it may cause irreparable loss to the respondent- plaintiff as third party rights would also be created. Consequently, the injunction as prayed for, has been granted. [10] It deserves mention here that at the time of hearing the injunction application, one of the legal objections taken on behalf of the petitioner-defendant was that suit for permanent injunction was not maintainable as it was hit by Section 41 (h) of the Specific Relief Act. In other words, it was contended that if there was a valid oral agreement between the parties, as asserted by the respondent-plaintiff, a suit for specific performance ought to have been instituted. The said objection appears to have led the respondent-plaintiff to move an application under Order 6 Rule 17 CPC for amendment of the suit so as to convert the same C.R. No.22 of 2007 -4- into a suit for possession by way of specific performance. [11] The afore-said objection though found favour with the learned trial Court, however, it refused to press the same into service for the reason that the amendment of the suit had already been sought by the respondent- plaintiff. [12] Subsequently, the amendment application has also been allowed vide another impugned order dated 22.11.2006 which too is under challenge. [13] I have heard learned counsel for the parties and have gone through the impugned order as well as other relevant documents with their able assistance. [14] From the pleadings as also the rival contentions of the learned counsel, it appears that the parties entered into an oral agreement, the salient features of which might have been jotted down on a piece of paper only. However, the terms and conditions in an explicit form were yet to be formalized. The question as to who out of the two is largely responsible for frustrating the formalization of contract, is yet to be resolved by the Civil Court. In these circumstances, would it be fair to restrain the petitioner from enjoying ever restricted rights of the property owned by him, more so when the respondent has admittedly paid a negligible and meager part of the total sale consideration. At the same time simpliciter creation of third party rights may jeopardise the respondent's rights. [15] A workable solution to ensure the protection of rights of both the parties, therefore, needs to be worked out. In the peculiar facts and circumstances, the respondent-plaintiff can at the best be protected by prohibiting the petitioner from creating third party rights to claim the often C.R. No.22 of 2007 -5- pleaded case of “bona fide purchaser.” [16] I am, therefore, of the considered view that the directions issued hereinafter would be the most appropriate substitute of the blanket ad-interim injunction granted by the Courts below. While modifying impugned orders granting absolute ad-interim injunction, it is directed that the petitioner-defendant shall not alienate the subject property unless a copy of the agreement to sell, if any, is placed by it on the record of the learned Civil Court in which pendency of the civil suit between the parties shall be expressly disclosed and thereafter the learned Civil Court may grant prior permission to sell the subject property or part thereof. It would ensure acknowledgment of the pending litigation by the prospective vendee who shall obviously step into the shoes of the petitioner on his own peril. [17] As regard to the impugned order permitting amendment of the plaint, it is not in dispute that on the date when the respondent sought the amendment, the respondent-plaintiff could maintain a suit for specific performance within the limitation period. No serious prejudice, thus, appears to have been caused to the petitioner-defendant by permitting the amendment of the suit with a laudable object to avoid multiplicity of litigation, more so when it is always open for the defendant-petitioner to plead and prove that the suit for permanent injunction was not maintainable at all and no 'cause of action' had accrued in its favour at that time when either of the suit was filed. [18] With these directions, the civil revision petitions stand disposed of. May 23, 2008 ( SURYA KANT ) poonam JUDGE