1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE First Appal No.649 of 1989 Eldred Anthony Nicholas Lobo Appellant Vs. Gerald Joseph Almeida & anr. Respondents Mr.P.M.Pradhan with Ms.Leena Patil for appellant. Mr.N.V.Walawalkar, Senior Advocate with Mrs.Aarti Gujare for resp.no.1. CORAM: B.H.MARLAPALLE, J. Reserved on : January 31, 2008. Pronounced on : March 28, 2008. JUDGMENT: 1. This appeal filed by the original defendant no.1 is directed against the decree passed by the learned Civil Judge, Senior Division at Thane on 15/2/1989 in Special Civil Suit No.71 of 1979 and Special Civil Suit No.103 of 1977. After the arguments were concluded, the final judgment was reserved, on 31/1/2008. However, the plaintiff presented C.A.No.1134 of 2008, for seeking leave to bring on record additional document and the same was heard on 12/3/2008. The operative part of the decree 2 reads as under: ". Suit is decreed with costs. . The Plaintiff shall be entitled to recover the sum of Rs.7,21,300/- towards price of land, damages interest from the defendants Nos.1 and 2 who are jointly and severally liable to pay the sum and they do pay the same to plaintiff. . The plaintiff shall be entitled to pay interest at the rate of 15% per annum on the sum of Rs.7,21,300/- from 7/4/1975 till its realisation and the defendants do pay the same to the plaintiff. . The claim of plaintiff for vacant possession of suit is hereby rejected. . The Special Civil Suit No.103/77 be disposed of after the decree in the present suit is passed. . The Judgment in the present suit shall 3 be the part and parcel of the record of the Special Civil Suit No.103/77. . Copy of the Judgment be kept in Spl. Civil Suit No.103/77." 2. Plaintiff (the present respondent no.1) was the holder of agricultural land admeasuring 7033 sq.yards (5837 Sq.mtrs.) (Old Survey Nos.236/2 and 226) and bearing Final Plot No.365-C located at Panchpakhadi, Thane. He agreed to sell the suit land in three distinct plots and the first two plots admeasuring 2300 sq.yards each and third one admeasuring 2433 Sq.yards, at the rate of Rs.100/- per square yard to the defendants as per the agreement dated 4/7/1975. The plaintiff was a minor as on the date of the agreement and, therefore, it was signed on his behalf by his guardian and natural mother Mrs.Terrasa Almeida. The plaintiff attained the majority on 3/3/1976 and he formally ratified the contract of sale on 7th September 1976. The plaintiff contended that no consideration whatsoever by way of earnest money was paid to him by the defendants and the defendants failed to perform their 4 part of the contract and unauthorisedly started construction of a three storey building on the first plot in the month of October 1976. The plaintiff, therefore, served a notice to the defendants who gave their reply on 20/11/1976. Therefore, the plaintiff was constrained to file Special Civil Suit No.103 of 1977 on 21/4/1977 praying for vacant possession of the first plot and further for Rs.10,500/- by way of damages. The defendants again committed breach of the contract with regard to the second plot and they failed to perform their part of contract on or before 1st March 1977. Hence the plaintiff service notice on the defendants and finally filed Regular Civil Suit No.403 of 1978 on 1st June 1978 for vacant possession and for recovery of Rs.10,500/- by way of damages. Plaintiff moved an application for temporary injunction in RCS No.403 of 1978 and the same was granted. The defendants preferred an appeal against the order of injunction by filing Misc. Civil Appeal No.59 of 1978 and it was ultimately disposed off by compromise purshis at Exhibit 14 signed by both the parties on 4/12/1978. In the compromise it was agreed that the defendant should perform his part of the contract and the plaintiff should withdraw the notice issued and served on the 5 defendants and in turn the defendants shall pay to the plaintiff by demand draft a sum of Rs.6,83,300/- as a price of land and a sum of Rs.38,000/- by way of damages plus 6 % interest per annum on the sum of Rs.38,000/- from 1st March 1978. It was further agreed that the defendants shall not commit default in the payment of price of consideration and damages as well as interest and if they committed any two defaults, the plaintiff would be at liberty to execute the decree which may be passed in terms of the compromise in the suit for specific performance. The plaintiff, therefore, alleges that the defendants committed default and, therefore, he was constrained to file a fresh suit for recovery of Rs.7,21,300/- from the defendants, on 19/6/1979 and which came to be registered as Special Civil Suit No.71 of 1979. During the pendency of the suit the defendants obtained sanction from the Municipal Corporation and the construction proceeded and the defendants constructed seven buildings, each of four floors including ground floor on Final Plot No.365-C at a total cost of Rs.35 lakhs and even then they did not bother to pay a single pie from the agreed amount of Rs.7,21,300/-. Hence the plaint was amended. After the evidence was closed the plaintiff moved an 6 amendment application and prayed for interest at the rate of 15 per cent per annum instead of 6 per cent per annum. 3. The defendants filed joint Written Statement at Exhibit 22 and admitted the agreement dated 4/7/1975 signed with the plaintiff for the purchase of the suit property and also admitted the filing of Special Civil Suit No.103 of 1977 as well as Regular Civil Suit No.403 of 1978 against them by the plaintiff. Purshis at Exhibit 14 dated 4th December 1978 submitted in the Misc. Appeal was also admitted. The suit was opposed only on the limited ground that when the said compromise purshis was signed, the defendants were not aware of the order passed by the competent authority, Thane Urban Agglomeration declaring the suit land as surplus which was to be forfeited by the State Government. All along the plaintiff had represented that his case before the Ceiling Authority was pending and he did not intentionally bring to the notice of the defendants the order dated 10/7/1978 declaring the suit land as surplus. The plaintiff, therefore, played a fraud and the plaintiff did not have the marketable title in respect of the suit land and it 7 was under these circumstances that the purshis which was marked as Exhibit 47 in the present suit could not be acted upon. 4. The trial Court framed the following Issues and answered accordingly: "(1) Does plaintiff prove that on the date of agreement 4/6/1976 and even thereafter upto the compromise arrived on 4/12/1978 in Misc. Civil Appeal No.59/78 he had perfect title to the entire area of the suit Plot? Answer - Yes. (2) do defendants prove that prior to said compromise the plaintiff had lost his title to some of the area of the suit plot due to order passed by the competent authority under the provisions of Urban Land Ceiling Act as contended? Answer - No. 8 (3) Do they further prove that the plaintiff knowing fully well suppressed that fact from the defendants and got the disputed compromise duly completed. Answer - No. (4) What is effect of referred compromise in this suit? As per final order. (5) Is plaintiff entitled to the specific performance in the manner asked for? Answer - Yes. (5-A) Is the plaintiff entitled for the vacant possession of final plot No.365-C by removing all the seven buildings thereof? Answer - No. (5-B) Is the plaintiff entitled for interest 9 on sum of Rs.7,21,300/-? Answer - Yes. (6) What order? As per final order." 5. The trial Court upheld the title of the plaintiff to the suit land and it rejected the contention of the defendants that the plaintiff had lost his title on account of the order passed by the Competent Authority under the Urban Land Ceiling Act. The trial Court also held that the plaintiff was not guilty of suppressing any material fact regarding the suit property and, therefore, held that the Compromise at Exhibit 47 was binding on the defendants and, therefore, the plaintiff was entitled for specific performance. 6. Mr.Pradhan, the learned Senior Counsel for the appellant opposed the impugned decree mainly on the ground that the plaintiff’s title to the suit property was not perfect. The defendants were never informed that the said order was set aside by the higher authority at any time despite the 10 correspondence between the Advocates of the respective parties. He also submitted that the suit was required to be dismissed on the ground of non-joinder of the necessary parties in asmuchas the partnership firm of which the defendants were partners was not impleaded as an additional defendant. It was further submitted that in view of the pendency of Special Civil Suit No.103 of 1977 and Regular Civil Suit No.403 of 1978, a fresh suit for specific performance was not maintainable. As per Mr.Pradhan, the learned Judge of the trial Court fell in error in holding that the order passed by the Competent Authority on 10/7/1978 was subsequently set aside based on the letter addressed to Mr.O.J.Almeida, on 16/3/1983 and more so because the said letter does not pertain to the suit property. He also referred to the correspondence between the parties at Exhibits 60 to Exhibits 69 and submitted that till 15th June 1979 the appellant was not aware of the order of the competent authority passed on 10/7/1978. He also pointed out that an amount of Rs.1,50,000/- by way of first instalment as stated in the compromise dated 4/12/1978 was also paid to the plaintiff and the same was admitted and, therefore, the trial Court committed an error in calculating the 11 decretal amount at Rs.7,21,300/-. 7. Admittedly, against the order of injunction passed below Exh.5 in Regular Civil Suit No. 403 of 1978, the present appellants (defendants in the suit) had filed Misc. Civil Appeal No. 59 of 1978 and the said appeal was ultimately disposed off by a compromise pursis at Exh.14 signed between the parties on 4/12/1978 and placed on record in the instant suit at Exh. 47. It is not disputed that the terms of the compromise pursis are binding on the respective parties. The appellants had agreed to pay an amount of Rs.6,83,000/- by way of price for the suit land and the payment schedule was also stipulated. As per Clause 9 of the said compromise pursis any two defaults in the payment schedule by the appellants, the plaintiff would be at liberty to execute the decree for specific performance and damages in respect of the suit land. The compromise pursis was signed by the present appellants and the partnership firm was not a party to the compromise pursis. Hence the suit for specific performance was rightly filed by the plaintiff against the present appellants and it did not support the non-joinder of necessary parties. 12 8. The only issues that fall for consideration in this appeal are, (a) Whether the suit land finally remained as surplus declared by the Competent Authority under the Urban Land Ceiling Act pursuant to the order dated 10/7/1978? and (b) Whether the plaintiff is guilty of suppression of material facts, which could be treated to have come in the way of the appellants from implementing the compromise pursis, Exh.47? 9. In the compromise pursis (Exhibit 47) Clauses 1, 2 and 3 stated as under:- "(1) It shall be the appellants’ obligation to obtain sanction for sale of the said Final Plot No.365-C under the provisions of the Urban Land (Ceiling & Regulation) Act, 1976, from concerned Competent Authority; (2) The appellants shall obtain requisite 13 permission for use of such land for non-agricultural purpose in connection with the construction of the buildings on such land from the Collector, Thane, in terms of Clause (5) of the said Agreement for sale; (3) The respondent shall make and sign all such applications as may be required under the Law for obtaining permission for sale of the property - from the Competent Authority under the Urban Land (Ceiling & Regulation) Act, 1976, and also for grant of non-agricultural permission for use of such land for construction of buildings and shall co-operate with the appellants in attending the offices of the Collector and the concerned officers whenever requested, for the purpose of inquiry into such applications. . The appellants - defendants in his cross-examination before the trial court admitted that he did not make any correspondence with the plaintiff after the compromise pursis was signed so as to obtain permission from the Competent Authority, he did not take any steps in pursuance of Clause (1) 14 of the compromise pursis, even after knowing that the land was surplus he proceeded with the work of construction of buildings which construction was started in the year 1978. He further admitted that he completed the construction of 5th building in the year 1982. The correspondence addressed by the Advocates of the plaintiff to the Solicitors of the defendants was at Exhs. 60 to 69 and the replies thereto were at Exhs. 76/1 to 76/9. Exh. 69 is a letter issued to the defendants’ solicitors by the plaintiff’s advocate Shri D.M. Pradhan and the same very clearly stated that the defendants were aware of the enquiry conducted by the Competent Authority under the ULC Act. This letter has not been replied by the solicitors of the defendants. At the same time, as per the compromise pursis it was the duty of the defendants to obtain the clearances under the ULC Act and if they had taken such steps, they would have certainly come to know whether the plaintiff’s marketable title was doubtful and whether the suit land was declared surplus land under the ULC Act. It cannot be also lost sight of the fact that the agreement between the parties for purchase of the suit plot was dated 4/7/1975 and immediately on signing of the said agreement, the suit property was 15 handed over in the possession of the appellant no.1 on the same day. The ULC Act came into force from March, 1976 and the appointed day under the said Act was 25/4/1976. Thus as on the day the ULC Act came into force, the suit property was in possession of the appellant no.1 and, therefore, it was his duty, as a holder of the land, to file returns under Section 6 of the said Act. The term "owner" means a person exercising the right as owner and under Section 53 (1) of the Transfer of Property Act, the transferee holds the possession of the land in part performance of the agreement and he would be entitled to exercise all such rights which are available to the original owner. If the appellants were aware that the plaintiff’s title was not marketable, surprisingly they did not stop the construction which had commenced in the year 1978 and all the five buildings were fully constructed by the year 1982. Thus, on one hand, the appellants alleged that the plaintiff did not have a marketable title over the suit land and on the other hand they proceeded to construct five buildings on the said land as if they were the owners. Not only this, the appellant no.1 admitted before the trial court that the entire consideration amount in respect of all the flats in 16 the five buildings was received by the appellants. Under the provisions of Sections 64 and 65 of the Contract Act, if any person had received any benefit under any agreement, he is bound to restore such benefits to the other or to compensate for it. 10. No doubt, the order dated 10/7/1978 (Exh.48) passed by the Competent Authority No.II, Thane Urban Agglomeration declared the suit plot as surplus, the said order was set aside by the Government of Maharashtra by its order dated 16/3/1983 and it clearly goes to show that the earlier order dated 10/7/1978 was passed without issuing notice under Section 8(3) of the ULC Act along with the draft statement and, therefore, the Joint Secretary to the Government in the Department of General Administration had by his letter dated 2/10/1980 directed for a review of the said order. Though the order dated 10/7/1978 came to be set aside vide the subsequent order dated 16/3/1983, the appellants admittedly proceeded with the construction and transfer of the residential units in all the five buildings by way of sale. Therefore, it does not lie in the mouth of the appellants that the plaintiff did not have a marketable title in respect of the suit 17 property, thereby justifying their failure for specific performance of the terms of the compromise pursis at Exh.47. 11. Civil Application No. 1134 of 2008 has been filed by the plaintiff seeking permission to produce the agreement of sale dated 12/10/1980 entered between M/s. L & N Associates through the appellant no.1 therein and Mrs. Usha D. Joshi, the purchaser, in respect of Flat No.23 on the 3rd floor in Building No.C to be constructed on the suit land. By filing an affidavit in reply the appellant no.1, has opposed the said application. But it is pertinent to note that the factum of execution of the said agreement dated 12/10/1980 has not been disputed. The appellants are the vendors of the said agreement and the agreement states that the vendors have got sanction from the Town Planning Authority as well as from the Thane Municipal Council a lay out for construction of five buildings on the suit land and in accordance with the said sanctioned plan they have commenced the construction. Mr. Pradhan the learned counsel for the appellants submitted that the agreement is not the registered document and, therefore, it cannot be termed as a public document 18 so as to be brought for the first time before this court in the appeal. If the said agreement was placed before the trial court, the defendants would have an opportunity to deal with the same. . Order XLI Rule 27 deals with the production of additional evidence in the Appellate Court. Clause (b) of Rule 27 (1) states that if the Appellate Court requires any document to be produced to enable it to pronounce judgment, or for any other substantial cause, the Appellate Court may allow such document to be produced. I do not find any impediment in allowing the agreement to be placed on record and then referring to the agreement sought to be produced in Civil Application No. 1134 of 2008 by the plaintiff and when the execution of the agreement has not been disputed by the appellants. 12. The evidence placed before the trial court by the respective parties clearly went to show that the appellants-defendants had taken out all possible false pleas to defeat the suit for specific performance and on the other hand, proceeded to construct and in fact completed all the five buildings and created third party interests by 19 receiving the entire sale proceeds. The terms of the compromise pursis were binding on them and the earlier suits were decreed in terms of the same. Clause (1) of the said compromise pursis clearly stated that the parties have settled by mutual consent Special Civil Suit No.103 of 1977 and RCS No. 403 of 1978 and in Clause (14) of the said compromise pursis it is provided that respondent (plaintiff) shall at once after the decree comes to be passed in the said proposed suit, withdraw Special Civil Suit No. 103 of 1977 and Regular Civil Suit No. 403 of 1978 instituted by him against the appellants and the same shall stand dismissed for want of prosecution. As per Clause (15) of the said compromise pursis, the parties agreed that all the terms of the suit agreement for sale dated 4/7/1975 shall remain subsisting and binding on the parties subject to the modification in the preceding clauses. The defence taken by the defendants in Special Civil Suit No. 71 of 1979 was only by way of an after thought so as to avoid the execution of the terms of the compromise pursis and the trial court has rightly decreed the said suit based on the said compromise pursis. The decree passed by the trial court does not suffer on any count and it deserves to be confirmed. 20 13. Hence, this appeal fails and the same is hereby dismissed with costs. The decree passed by the trial court and impugned in this appeal is hereby confirmed. (B.H.MARL