Hari Steel And General Industries Ltd vs Daljit Singh

4. The respondents-plaintiffs have filed the above said suit praying for decree for specific performance of agreement to sell, concluded on 7.4.2005 and further recorded on 3.5.2005 between the respondents-plaintiffs and the appellants in respect of property bearing No.A-22, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi. The plaintiffs also sought a decree of permanent injunction against the appellants-defendants and others to restrain them from selling, transferring or encumbering the suit S.L.P.(C) No.31176 of 2018 5 property to third party and a permanent injunction against defendant Nos. 2 to 6 from transferring or encumbering their share holdings of 10 lakh shares in the appellant No.1/defendant No.1 company. It was the case of the plaintiffs, that the appellant No.2 herein, as a Managing Director and principal share holder of the appellant No.1 company, approached the respondents-plaintiffs for sale of suit property and the business carried in the name and style of ‘South Delhi Toyota’ including the goodwill of the business. It is their case that on 7.4.2005, the respondent Nos. 1 and 2 – plaintiffs and the first appellant company through its Managing Director/2nd appellant have arrived at a concluded agreement for sale of the suit schedule property, transfer of the goodwill and franchisee rights in respect of the running business of ‘South Delhi Toyota’ for a total consideration of Rs.55.50 crores. It is their further case that pursuant to the said concluded contract on 7.4.2005, the respondents-plaintiffs have paid an amount of Rs.2 crores, i.e, Rs.1 crore in cash and Rs.1 crore by cheque and the said amount was acknowledged by the appellant No.2. It is their further case that they have entered into written S.L.P.(C) No.31176 of 2018 6 agreement to sell on 3.5.2005, in pursuance of an understanding/agreement dated 7.4.2005. The breakup of the total consideration disclosed in the agreement is as follows:-

6. The appellants-defendants in the suit, have filed their written statement on 25.01.2007.

11. After filing written statement in the suit, respondent Nos. 1 and 2/plaintiffs have filed I.A.No.1557 of 2007 under Order XII Rule 6 of CPC, praying for judgment based on certain claimed admissions. A copy of the application filed in I.A.No.1557 of 2007 is placed on record. The aforesaid application is filed mainly claiming that the appellants in bail application nos.4109-4110 of 2006 seeking anticipatory bail in connection with the crime registered on complaint filed by impleaded 4th respondent, have categorically admitted their readiness and willingness to execute a sale deed in their favour, in terms of the agreement dated 3.5.2005. The bail applications referred above were filed in connection with the crime registered in FIR No.517 of 2006 on the file of Police Station Sarita Vihar, which was registered on the complaint filed by Sri Praveen Kumar Jolly (First Buyer) registered for offences under Sections 420 and 120B IPC. The aforesaid complainant, Sri Praveen Kumar Jolly has alleged that during the subsistence of MOU entered in their favour on 24.5.2003, for a portion of the schedule S.L.P.(C) No.31176 of 2018 12 property have entered into another agreement with the respondent Nos. 1 and 2 on 3.5.2005. Thus, it is pleaded that the appellants herein by entering into multiple agreements have committed the offence of cheating. Except claimed admissions alleged to have been made by the appellants-defendants’ counsel during the hearing of the anticipatory bail application, no other admissions are claimed in the application. The said interlocutory application is contested by appellants and other defendants who have seriously disputed the genuineness of the agreement dated 3.5.2005 alleging that pages 3 and 4 of the agreement have been replaced and substituted by pages which bear forged signatures of the defendant No.2. Further they also disputed stating that, all throughout the case of the appellants is only admitting receipt of Rs.Two crores but not Rs.Five crores as claimed by the plaintiffs. Further, the relief sought in the interlocutory application is opposed by the appellants pleading that the forgery and fabrication of the agreement dated 3.5.2005 came to light when the said agreement was produced by the plaintiffs in CS(OS) No. 1508 of 2005 filed by Sri Praveen Kumar Jolly and S.L.P.(C) No.31176 of 2018 13 immediately on receipt of copy of the agreement dated 3.5.2005, they also filed an application in I.A. No.61 of 2006 in CS(OS) No.1508 of 2005 under Section 340 of Cr.P.C., challenging the genuineness of the agreement dated 3.5.2005. Thus, it is pleaded that unless genuineness of the agreement dated 3.5.2005 is decided finally, no decree for specific performance can be claimed.

27. In the case on hand, at first instance a Memorandum of Understanding was entered into by the appellants with the respondent No.4 i.e. Mr. Praveen Kumar Jolly on 24.05.2003 with respect to half of the suit property. It is the case of the appellants that due to non-compliance of the terms of MOU, by Mr. Praveen Kumar Jolly, the said MOU was terminated in August, 2004 and subsequently an arrangement/contract is entered into with respondent nos.1 and 2 – plaintiffs on 7.4.2005 and subsequent agreement dated 3.5.2005. It is the specific case of the appellants that contractual terms were not crystallized as such there were several blanks in the agreement dated 3.5.2005. While it is the case of the respondents-plaintiffs that an amount of Rs. Five crores was paid, i.e. Rs. Two crores by way of cheque and Rs.Three crores by way of cash, the same is seriously disputed by the appellants-plaintiffs stating that only an amount of Rs. Two Crores was paid and the payment of Rs. Three crores is a fabrication of the agreement to sell dated 3.5.2005 on pages 3 and 4 of the document. Based on the earlier MOU by the appellants with Mr.Praveen Kumar Jolly i.e. 4th respondent herein, 4th respondent has filed a suit for specific S.L.P.(C) No.31176 of 2018 24 performance of the agreement in CS(OS) No.1508 of 2005 in which conditional order was passed. It is the case of the respondents-plaintiffs that, when such conditional interim order was notified in the newspaper, they have come to know about the earlier agreement entered into by the appellants with respondent No.4 and they approached the 4th respondent and handed over the original agreement dated 3.5.2005 and the receipt to the 4th respondent. It is the specific case of the appellants that when they have come to know about the document dated 3.5.2005 in the suit filed by 4th respondent herein, they have come to know tampering and fabrication of the document, as such they have filed I.A.No.61 of 2006 in CS(OS) No.1508 of 2005 under Section 340 of Cr.P.C., on 3.1.2006. The present suit in CS(OS) No.2046 is filed by the respondents-plaintiffs, subsequently, on 1.11.2006. In the said suit, the appellants-defendants have filed written statement on 25.1.2007 by raising specific preliminary objection that the agreement dated 3.5.2005 is forged and fabricated, as such, they are liable for prosecution under Section 195(1)(b) of Cr.P.C. In the written statement, apart from other allegations, specific plea is made that suit is S.L.P.(C) No.31176 of 2018 25 barred in view of provisions of Section 16(c) of the Specific Relief Act, 1963, in absence of any plea of readiness and willingness by the respondents-plaintiffs. While admitting the arrangement entered into with the respondents-plaintiffs, it is the case of the appellants that the terms of the agreement were not concretized. As such almost all the necessary columns were left blank in the agreement dated 3.5.2005. It is not necessary to refer in detail the further averments made in the written statement for the disposal of this appeal before us. Subsequent to the filing of the written statement, the respondents-plaintiffs have filed the present application under Order XII rule 6 of CPC on 9.2.2007 for which reply was filed by the appellants on 19.3.2007. In the reply filed on behalf of the appellants and other defendants in I.A.No.1557 of 2006, opposing the relief sought for on the ground that in absence of any categorical and unconditional admissions, relief cannot be granted. The application in I.A.No.1557 of 2007 is filed only on the ground that in the bail petition filed by the appellants, in connection with the criminal case registered, arising out of a complaint filed by the 4 th S.L.P.(C) No.31176 of 2018 26 respondent, the appellants’ counsel has pleaded his readiness to fulfill the contract entered into on 3.5.2005. Except the said plea of admission there is no other admission, claimed in the application. The learned Single Judge has rightly rejected the application vide order dated 24.7.2017. In the order the learned Single Judge of the High Court has held that in view of the stand of the appellants that the agreement dated 3.5.2005 is a fabricated one and the signatures of the 2nd appellant are fabricated on pages 3 and 4 of the agreement, such issues can be resolved only after trial. But same is no ground to deliver judgment on claimed admissions. The learned Single Judge has held in paras 41 and 42 of the judgment as under:

13. Aggrieved by the order of the learned Single Judge, the respondents have preferred Appeal under Section 10 of the Delhi High Court Act, 1966. The Division Bench, by the impugned judgment dated 2.8.2018, has set aside the order of the learned Single Judge dated 24.7.2017 and allowed I.A.No.1557 of 2007 by granting consequential reliefs and permitted the respondents-plaintiffs to pay the balance amount of Rs.50.50 crores within a period of three months and 15 days, from the date of the judgment. The Division Bench was of the view that the appellants have admitted, entering into an agreement with the respondents-plaintiffs on 3.5.2005 and the receipt of Rs.Five crores is evident from the Director’s Report and balance-sheets of the company for the year ending on 31st March, 2005; 31st March, 2006 and 31st March, 2007. Further by holding that defence of the appellants in the suit is not genuine and contrary to the pleadings on court’s record as well as statutory filings under Companies Act, and that there is no genuine triable issue which could justify the trial in the suit, the Division Bench rendered judgment on claimed admissions. S.L.P.(C) No.31176 of 2018 15

rule (1) a decree shall be drawn up in accordance with the judgment and the decree shall bear the date on which the judgment was pronounced.”

37. In this case it is to be noted that the suit was filed on 1.11.2006 and written statement was filed on 25.01.2007 and the application under Order XII Rule 6 was filed on 9.2.2007. In year 2010 issues and additional issues were framed and trial is also commenced. In that view of the matter, there is no reason to pass the impugned order now for decreeing the suit on claimed admissions, in exercise of power under Order XII rule 6 of CPC at this stage. In view of the serious factual disputes and the defence of the appellants in the suit, it is not permissible for making roving inquiry for disposal of the application filed under Order XII Rule 6 of CPC. When the trial is already commenced, it is desirable to record findings on various contentious issues and disputes in the suit on merits by appreciating evidence but at the same time there is no reason or justification to decree the suit at this stage. For the aforesaid reasons, we are of the view that the impugned judgment of the High Court cannot be sustained and is liable to be set aside on this ground alone.

Accordingly, the appeal is allowed and the impugned judgment dated 2nd August, 2018 rendered in FAO(OS) No.268 of 2017 is set aside and the order of the learned Single Judge dated 24th July, 2017 passed in I.A.No.1557 of 2007 is restored. Consequently, the aforesaid I.A. No. 1557 of 2007 stands dismissed, with no order as to costs.

41. As it is pleaded that after the impugned order is passed, the respondents-plaintiffs have deposited the balance consideration amount, they are entitled for the refund of the same along with accrued interest, if any. S.L.P.(C) No.31176 of 2018 41

[R. Subhash Reddy] New Delhi April 24, 2019