Thomson Press (India) Ltd vs Nanak Builders & Investrs.P.Ltd & Ors

3. Although the case has a chequered history, the brief facts of the case can be summarized as under :-

4. Mrs. Lakhbir Sawhney, Respondent No. 2 and son Mr. H.S. Sawhney, the predecessor of Respondent No. 3 (a) to (d) were the owners of the property known as “Ojha House” / “Sawhney Mansion”, F-Block, Connaught Place, New Delhi. (These respondents shall be referred as “the Sawhneys” for the sake of convenience). M/s Nanak Builders and Investors Pvt. Ltd., Respondent No.1 is the plaintiff in the Suit. The plaintiff-Respondent No.1 filed a suit in the High Court of Delhi being Suit No. 3426 of 1991 against the defendants-respondents Sawhneys’ for a decree for specific performance of agreement. The case of the plaintiff-respondent is that on 29.05.1986 the defendant-respondent entered into an agreement with the plaintiff-respondent for sale of an area measuring about 4000 sq.ft. on the 1st Floor of F-26, Connaught Place, New Delhi on the consideration of Rs. 50 lakhs. Out of the said consideration, a sum of Rs. 1 lakh was paid by the plaintiffs to the defendants vide cheque no. 0534224 drawn from Union Bank of India, New Delhi. The aforesaid property shall be referred to as the “suit property” which was in the tenancy of M/s Peerless General Finance Company Limited. In the said agreement it was agreed inter alia that if the premises is vacated and the plaintiff did not complete the sale on the defendant, getting all permissions, sanctions etc., the defendant shall have the right to forfeit the money. Plantiff’s further case was that M/s Peerless General Finance Company Limited has given a security deposit of Rs. 25 lakhs approximately and did not vacate the premises and called upon the defendants that they will vacate the premises only when the defendants make the payment, that too on the expiry of the lease which expired around September, 1990. It is alleged by the plaintiff that during the intervening period, it has been making part payments from time to time out of the said consideration amount. In May 1991, the defendants got the said suit premises vacated from M/s Peerless General Finance Company Limited. The plaintiffs have immediately approached the defendants to receive the balance consideration but the same was avoided by the defendant. A public notice was, therefore, issued in ‘The Hindustan Times’ , New Delhi so that the defendants ‘Sawhneys’ do not sell, transfer or alienate the said property to any other person. Lastly, it was alleged by the plaintiff that despite being always ready and willing to complete the transaction, the defendant avoided to obtain requisite permission / sanction and clearance, hence the suit was filed. During the intervening period some more development took place. One Living Media India Limited, (in short LMI), said to be a group company of the Appellant M/s Thomson Press (India) Limited offered the defendant-respondent to take the suit premises on lease, some time in the year 1988. The defendants Sawhneys’ assured the LMI that lease would be granted after M/s Peerless vacated the suit property. LMI, accordingly, sent a cheque to the defendants-Sawhneys’ as earnest money in respect of the lease. However, when Sawhneys’ wanted to resile from the agreed terms with LMI, a suit was filed by LMI being Suit No. 2872 of 1990 against Sawhneys’ in Delhi High Court for perpetual injunction restraining the Sawhneys’ from parting with possession of the premises to any third party. The High Court passed the restrain order on 19.09.1990 with regard to the suit property and appointed a commissioner to report as to who is in possession of suit premises. igh Court for perpetual injunction restraining theSawhH It appears that the aforesaid suit filed by LMI was compromised and an order was passed on 08.04.1991 whereby, as per the compromise, the suit property was leased out by defendant-Sawhneys’ in favour of LMI and possession of the property was given to it.

5. On 01.11.1991, the plaintiff-M/s Nanak Builders in the meantime filed a suit against the defendant-respondent Sawhneys’ being suit no. 3426/1991 for specific performance of agreement to sell dated 29.05.1986. In the said suit pursuant to summons issued against the defendants– Sawhneys’ one Mr. Raj Panjwani, Advocate accepted notice on behalf of Sawhneys’ and stated before the Court that possession of the flat in question is not with the defendants, rather with M/s LMI which delivered to them by virtue of the lease. Mr. Panjwani further stated that till disposal of the suit the property in question would not be transferred or alienated by the defendants. The defendants- Sawhneys’ also filed a written statement in the said suit. It appears that the defendants- Sawhneys’ took loan from Vijaya Bank and to secure the loan, equitable mortgage was created in respect of the suit property. In 1977 a suit was filed by the Bank in Delhi High Court for recovery and redemption of the mortgaged property. The said suit was decreed on 14.10.1998 and recovery certificate was issued by DRT, Delhi. LMI, a group of the appellant Company intervened and settled the decree by agreeing to deposit the loan amount of Rs.1.48 crores. The LMI cleared all the dues, income tax liability etc., of Sawhneys’ for sale of the property in favour of LMI and its associates. Finally, in between 31.01.2001 and 03.04.2001 five sale deeds were executed by defendants-Sawhneys’ in favour of the present appellant herein M/s Thomson Press India Limited. On the basis of those sale deeds the appellant moved an application under Order 1 Rule 10 CPC for impleadment as defendants in a suit for specific performance filed by Respondent No.1 herein M/s Nanak Builders and Investors Pvt. Ltd.

6. The learned Single Judge of the Delhi High Court after hearing the parties dismissed the application on the ground that there was an injunction order passed way back on 04.11.1991 in the suit for specific performance restraining the defendants-Sawhneys’ from transferring or alienating the suit property passed, the purported sale deeds executed by the defendants in favour of the appellant was in violation of the undertaking given by the respondents which was in the nature of injunction. Aggrieved by the said order, the appellant filed an appeal being FAO No.295 of 2008 which was heard by a Division Bench. The Division Bench affirmed the order of the Single Judge and held that in view of the injunction in the form of undertaking given by the respondents-Sawhneys’ and recorded in the suit proceedings, how the property could be purchased by the appellants in the year 2008. The appellant aggrieved by the aforesaid orders filed this Special Leave Petition.

12. It is also not in dispute that before the institution of the suit the plaintiff-respondent got a notice published in the newspaper on 12.02.1990 in Hindustan Times, Delhi Edition. When this came to the notice of the appellant, the sister concern of the appellant, namely, M/s. Living Media India Limited sent a legal notice to the defendants Sawhneys’ dated 24.06.1990 and called upon him to execute the lease deed in respect of the suit property in terms of the agreement. In the said notice dated 24.06.1990 the sister concern of the appellant in paragraph 8 stated as under:

17. In the case of Savitri Devi v. District Judge, Gorakhpur and Others (1999) 2 SCC 577, a 3 Judges’ Bench of this Court considered a similar question under Order 1 Rule 10 CPC. The fact of the case was that the appellant filed a suit for maintenance and for creation of charge over the ancestral property. She also applied for an interim order of injunction restraining her sons from alienating the property during the pendency of the suit. But a vakalatnama was filed on behalf of the defendants and 4th defendant also filed an affidavit purporting to be on behalf of the defendants, expressing their concern that during the pendency of the case the suit property will not be sold. In the light of consent of the counsel the Court passed an order on 18.08.1992 directing the parties not to transfer the disputed property till the disposal of the suit. In spite of the aforesaid order one of the defendants sold 1/4th share of the land to the 3rd respondent and 1/4th share in another land to the 4th respondent on 19.08.1992 and further sold 1/4th share to the 5th respondent. On the basis of this transfer the transferee-Respondent Nos.3- 5 filed an application under Order 1 Rule 10 CPC for impleading them as parties to the suit. The application was allowed at all stages. This court noticed the relevant facts which has been incorporated in paragraph 4 of the decision which is reproduced hereunder :-

34. Even after the institution of the suit, the counsel who appeared for the defendants-Sawhneys’ gave an undertaking not to transfer and alienate the suit property. Notwithstanding the order passed by the Court regarding the undertaking given on behalf of the defendants- Sawhneys’, and having full notice and knowledge of all these facts, the sister concern of the appellant namely Living Media India Ltd. entered into series of transaction and finally the appellant M/s. Thomson Press got a sale deed executed in their favour by Sawhneys’ in respect of suit property.

32. In the light of the aforesaid discussion both on facts and law, we shall now examine some of the relevant facts in order to come to right conclusion.

35. Taking into consideration all these facts, we have no hesitation in holding that the appellant entered into a clandestine transaction with the defendants-Sawhneys’ and got the property transferred in their favour. Hence the appellant – M/s Thomson Press cannot be held to be a bonafide purchaser, without notice.

42. Having regard to the law discussed hereinabove and in the facts and circumstances of the case and also for the ends of justice the appellant is to be added as party-defendant in the suit. The appeal is, accordingly, allowed and the impugned orders passed by the High Court are set aside.

43. Before parting with the order, it is clarified that the appellant after impledment as party-defendant shall be permitted to take all such defences which are available to the vendor Sawhneys’ as the appellant derived title, if any, from the vendor on the basis of purchase of the suit property subsequent to the agreement with the plaintiff and during the pendency of the suit.

I have had the advantage of going through the order proposed by my Esteemed Brother M.Y. Eqbal, J. While I entirely agree with the conclusion that the appellant ought to be added as a party-defendant to the suit, I wish to add a few lines of my own.

To sum up:

With the above additions, I agree with the order proposed by my Esteemed Brother, M.Y. Eqbal, J. that this appeal be allowed and the appellant added as party defendant to the suit in question.

………………….……….…..…J. (T.S. Thakur) New Delhi February 21, 2013