Vidur Impex & Traders Pvt.Ltd.& Ors vs Tosh Apartments Pvt.Ltd.& Ors

4. In March 1980, respondent No.2 mortgaged the suit property to Shri S.N. Tondon. After 5 years, he entered into a collaboration agreement with Shri Arun Kumar Bhatia (respondent No.3) for construction of a multi-storied building. He also executed an agreement for sale in favour of respondent No.3. In November 1987, respondent No.2 took loan from Shri Avtar Singh and created an equitable mortgage in his favour. On 13.9.1988, respondent No.2 executed an agreement for sale in favour of respondent No.1 for a consideration of Rs.2.5 crores. After some time, respondent No.3 executed assignment deed dated 13.12.1988 in favour of respondent No.2. Simultaneously, the parties cancelled the collaboration agreement. After 3 months, respondent No.2 mortgaged the suit property in favour of respondent No.4. In 1992, respondent Nos. 2 and 4 entered into an agreement whereby the latter agreed to provide various services including the one that he will get the suit property vacated from the Sudan Embassy and for that he will charge Rs.4 crores.

5. The Sudan Embassy vacated the suit property on 12.5.1992 and handed over possession to respondent No.2, who is said to have handed over the same to respondent No.4. On coming to know about the proposed alienation of property by respondent No.2, respondent No.1 filed Suit No.425/1993 in the Delhi High Court for specific performance of agreement for sale dated 13.9.1988, award of damages and injunction. It also filed IA No.1947/1993 under Order 39 Rules 1 and 2 CPC. The learned Single Judge passed order dated 18.2.1993 and directed that defendant Nos. 1 and 3 (respondent Nos. 2 and 4 herein) shall not transfer, alienate or part with possession in any manner or create third party rights in respect of the suit property. After receiving summons, respondent Nos.2 and 4 filed IA No. 10730/1993 under Order 7 Rule 11 for rejection of the plaint on the ground that the same was barred by time. The learned Single Judge dismissed the application vide order dated 5.4.1994 and directed that interim order dated 18.2.1993 shall continue.

6. On 19.2.1997, respondent No.2 executed 6 agreements for sale in favour of the appellants for a total consideration of Rs.2.88 crores. In furtherance of those agreements, six sale deeds were executed and registered on 30.5.1997. In the meanwhile, the appellants executed agreement for sale dated 18.3.1997 in favour of Bhagwati Developers for a consideration of Rs.4.26 crores and received Rs.3.05 crores.

7. At that stage, respondent No.1 filed IA No. 8145/1998 for restraining respondent Nos.2 and 4 from handing over possession of the suit property to any other person. Respondent No.2 contested the application by asserting that he had not executed any sale deed in favour of the appellants and that possession of the suit property had already been handed over to respondent No.4. Thereupon, respondent No.1 filed CCP No. 118/1998 under Order 39 Rule 2A CPC with the allegation that the non-applicants including the appellants herein had entered into a conspiracy for the purpose of grabbing the property in violation of the order of injunction passed by the High Court. The learned Single Judge entertained the contempt petition against respondent Nos. 2 and 4 but declined to do so qua the appellants by observing that no prima facie case had been made out against those who were not parties to the suit. Respondent No.1 also filed IA No.8146/1998 under Order 26 Rule 9 read with Order 39 Rule 7 and Section 151 CPC for appointment of Local Commissioner and IA No.8147/1998 under Order 40 Rule 1 read with Section 151 CPC for appointment of a receiver. The Court Commissioner appointed by the High Court to ascertain whether respondent Nos. 2 and 4 were in possession of the suit property, submitted report dated 10.2.2000 with the finding that respondent No.4 was in actual possession.

11. When the representative of respondent No.1 learnt about the award of the arbitrator and the order passed by the Calcutta High Court, he filed IA No.625/2001 in the Delhi High Court under Order 39 Rules 1 and 2 read with Section 151 CPC impleading respondent Nos. 2 and 4, the appellants and Bhagwati Developers as parties and prayed that respondent Nos. 2 and 4 be restrained from handing over possession of the suit property and that the appellants be restrained from taking forcible possession in the garb of some order passed by the Calcutta High Court. The learned Single Judge of the Delhi High Court passed an ex-parte interim order dated 22.1.2001 and restrained respondent Nos. 2 and 4 from delivering possession of the suit property to the appellants and also restrained the latter from taking possession. Bhagwati Developers challenged that order in FAO (OS) No.90/2001, which was dismissed by the Division Bench of the High Court on 2.3.2001 with liberty to approach the learned Single Judge for appropriate order.

16. By an order dated 3.9.2007, the learned Single Judge of the Delhi High Court dismissed IA No. 2268/2003 and IA No. 7373/2006 and allowed IA No.8147/1998. He first considered the applications filed by respondent No.1 and Bhagwati Developers in the matter of appointment of receiver and held:

18. After about 11 years of the execution of agreements for sale in their favour by respondent No.2, the appellants filed IA No.1861/2008 under Order 1 Rule 10(2) CPC for impleadment as defendants in Suit No. 425/1993. They pleaded that by virtue of the agreements for sale and the sale deeds executed by respondent No.2, they have become absolute owners of the suit property and, as such, they are entitled to be impleaded as defendants in the suit filed by respondent No.1. The appellants also invoked the doctrine of lis pendens embodied in Section 52 of the Transfer of Property Act, 1882 and pleaded that having purchased the property during the pendency of the suit by respondent No.1, they have acquired the right to contest the same. The appellants relied upon the orders passed by the Delhi High Court in IA Nos. 625/2001, 1211/2001 and 9576/2001 to show that respondent No.1 was very much aware of the agreements for sale and the sale deeds executed in their favour by respondent No.2 and the agreement executed by them in favour of Bhagwati Developers and pleaded that it was the duty of respondent No.1 to have suo motu impleaded them as parties to the suit. In the reply filed on behalf of respondent No.1, it was pleaded that the suit for specific performance had been filed because respondent No.2 did not execute the sale deed in furtherance of agreement for sale dated 13.9.1988 and the appellants who are not parties to that agreement do not have the locus to contest the suit. Respondent No.1 also raised an objection of delay by asserting that the appellants had sought impleadment after 11 years of having entered into a clandestine transaction with respondent No.2. Respondent No. 1 relied upon orders dated 22.1.2001, 24.1.2001 and 8.2.2001 passed by the Delhi High Court and Suit No. 161/1999 field by respondent No.2 for grant of a declaration that the sale deeds allegedly executed in favour of the appellants were forged and fabricated, to show that the appellants were very much aware of Suit No.425/1993 and pleaded that their assertion about lack of knowledge was false because they had been contesting Suit No.161/1999 for almost 7 years. Another plea taken by respondent No.1 was that the transactions entered into between respondent No.2, the appellants and Bhagwati Developers were ex facie illegal and on the basis of such transactions the appellants did not acquire any right or interest in the suit property.

Therefore, Sh. Rajesh Gupta, Advocate is hereby appointed as Receiver. His fee is fixed at Rs.50,000/- initially subject to revision, depending on the quantum of work he might have to undertake while acting as Receiver to be paid by the plaintiff. He will manage the affairs of the suit property by removing defendant No.3 from the suit property. If need arise, he may take the assistance of the police to thwart any resistance and also may break open the locks of the property and make an inventory of the goods lying therein. If he required to do any work in respect of the property like maintenance, he shall seek prior permission from the Court. This application is accordingly allowed.

Though we are not concerned with these proceedings, this fact is mentioned to highlight the manner in which the transactions are taking place, that too in the teeth of injunction order passed in Suit No.425/1993 and the vacillating attitude of the defendant No.l (since deceased).

29. In Kasturi v. Iyyamperumal (supra), this Court considered the question whether a person who sets up independent title and claims possession of the suit property is entitled to be impleaded as party to a suit for specific performance of contract entered into between the plaintiff and the defendant. In that case, the trial Court allowed the application for impleadment on the ground that respondent Nos.1 and 4 to 11 were claiming title and possession of the contracted property and, therefore, they will be deemed to have direct interest in the subject matter of the suit. The High Court dismissed the revision filed by the appellant and confirmed the order of the trial Court. While allowing the appeal and setting aside the orders of the trial Court and the High Court, this Court referred to Order 1 Rule 10(2) CPC and observed:

36. Though there is apparent conflict in the observations made in some of the aforementioned judgments, the broad principles which should govern disposal of an application for impleadment are:

42. In view of the above conclusions, we do not consider it necessary to advert to the documents filed by respondent No.1 before this Court for the first time and the additional affidavit filed by Smt. Bhanwari Devi Lodha on behalf of Bhagwati Developers.

43. In the result, the appeals are dismissed. For their contumacious conduct of suppressing facts from the Calcutta High Court and thereby prolonging the litigation, the appellants and Bhagwati Developers are saddled with cost of Rs.5 lakhs each. The amount of cost shall be deposited by them with the Supreme Court Legal Services Committee within a period of three months.