Case: Bharat Karsondas Thakkar Vs. M/s Kiran Construction Co. &amp; Others

1. Leave granted in Special Leave Petition (Civil) Nos.28267-28268 of 2008 and 28270-28271 of 2008. All the Appeals were taken up together for disposal as they arise out of the same set of facts and common questions of law are involved. Five interlocutory applications, being I.A.Nos.4,5,6,7 and 8, filed in connection with the Special Leave Petition, for clarification of the judgment dated 9th April, 2008, passed in Civil Appeal No.2573 of 2008 and for deletion of the names of some of the parties and for filing additional documents, were also taken up for disposal along with the Appeals. While SLP(C)Nos.28267-28268 of 2008 have been filed by the Official Receiver against the order dated 17th November, 2006, passed by the Division Bench of the Bombay High Court in Appeal No.748/2001 challenging the order dated 21st June, 2001, passed by the learned Single Judge and restoring Notice of Motion No.140/99 for fresh hearing before the learned Single Judge and SLP(C)Nos.28270-28271 of 2008 have been filed by the Vaitys against the same order in Appeal No.747/2001 in Notice of Motion No.2700/99, claiming the self-same reliefs. As indicated hereinabove, three of the interlocutory applications have been filed in Civil Appeal No.2573/2008, for clarification of the Judgment dated 9th April, 2008, passed in Civil Appeal No.2573/2008, disposing of Appeal No.741 of 2001. Applications have also been filed by the petitioners in both the set of Special Leave Petitions (now appeals) for condonation of delay in filing the same on account of the fact that the subject matter of the said Special Leave Petitions was also the subject matter of SLP(C)No.2328/2007, which was subsequently renumbered as Civil Appeal No.2573/2008, but had remained undisposed of when the appeal against the order dated 16th November, 2006, was finally disposed of by the judgment and order dated 9th April, 2008. There being substance in explanation given for condonation of delay in filing the Special Leave Petition, such delay is condoned.2. On 27th May, 1949, the Collector of Thane recorded a grant in favour of Mr. Sowar Ramji Vaity entitling him to lease of lands relating to Survey Nos.83 to 91 in Village Mulund for a term of 999 years. Mr. Sowar Ramji Vaity died in the year 1965, leaving behind him surviving Jagannath, Babu, Vishnu and Bhaskar (hereinafter referred to as `the Vaitys) as his legal representatives to succeed to his estate. On 1st October, 1973, the Vaitys entered into an agreement to sell their rights and interests in the aforesaid lands to one Mr. K.L. Danani (the Respondent No.44 herein) for a total consideration of Rs.2 lakhs. Under the Agreement, Mr. Danani was required to obtain lease of the suit lands from the Collector in favour of the Vaitys within a period of two years. During the months of April and June, 1974, Mr. Danani constituted a partnership firm with Mr. K.V. Thakkar and Mr. S.S. Thakkar under the name of M/s Swas Construction Company. The Appellant herein, who was then a minor, was admitted to the benefits of the partnership firm. The time for completion of the sale under the agreement dated 1st October, 1973, was extended by two months till after the land was converted to non-agricultural use or the Vaitys made a clear and marketable title to the suit land, whichever was later. It was recorded that M/s Swas Construction Company had been put in possession of the suit lands in part performance of the agreement dated 1.10.1973.3. In the meantime, the Urban Land (Ceiling and Regulation) Act, 1976, was enacted and Mr. K.L. Danani claiming possession under the said Agreement filed a statement with the Urban Land Ceiling Authorities in terms of Section 6(1) of the Act. On 12th June, 1979, pursuant to a decision arrived at in April, 1978, the Government of Maharashtra executed a lease in favour of the Vaitys for a period of 60 years. Immediately thereafter, on 18th June, 1979, the Vaitys entered into an Agreement with M/s Modern Development Corporation, the Respondent No.24 herein, granting them development rights in respect of the suit lands. On 24th August, 1979, M/s Modern Development Corporation is alleged to have entered into an agreement with the Respondent No.1, M/s Kiran Construction Company, to transfer its beneficial interests in the suit lands, except for Serial No.91, in favour of the Respondent No.1. Clause 12 of the Agreement specifically required M/s Modern Development Corporation to obtain confirmation from M/s Thakkar & Associates that there was no subsisting agreement for sale in their favour in respect of the property agreed to be sold.4. On 18th February, 1980, the Appellant and Mr. K.V. Thakkar filed Suit No.252 of 1980 in the Bombay High Court against Mr. K.L. Danani (the Respondent No.44) and Mr. S.S. Thakkar, inter alia, praying for a declaration that a partnership had existed between them and that Mr. K.L. Danani and Mr. S.S. Thakkar had retired from M/s Swas Construction Company.5. It appears that in February, 1980, in Notice of Motion No.283 of 1980 filed in the said Suit, Mr. K.L. Danani undertook not to part with possession of the suit lands pending disposal of the Notice of Motion, which was disposed of on 9th October, 1980, by the Bombay High Court by appointing the Court Receiver over the properties.6. On 15th May, 1981, the Vaitys terminated the Agreement dated 18th June, 1979, entered into with M/s Modern Development Corporation (the Respondent No.24). This prompted the Respondent No.1 to file Suit No.1578 of 1981 against the Vaitys and the partners of M/s Modern Development Corporation on 7th September, 1981, for specific performance of the purported Agreements dated 18th June, 1979 and 24th August, 1979. On 1st July, 1982, the Bombay High Court passed an order restraining the Vaitys and the partners of the Respondent No.4 from selling, transferring, encumbering, alienating or further parting with possession of the suit lands pending disposal of Suit No.1578 of 1981. After the death of Mr. Babu Vaity on 1st May, 1994, all the parties to Suit No.252 of 1980, entered into a comprehensive settlement with the Vaitys, Mr. K.L. Danani (the Respondent No.44) and one Mulchand G. Mehta (the Respondent No.47) and in order to give effect to the settlement, the Vaitys and the Respondent No.47 were joined as defendants in Suit No.252 of 1980. On the very same day, the Bombay High Court decreed the suit on consent terms. Pursuant to the terms and conditions arrived at between the parties, the Respondent No.48 took out Notice of Motion No.140 of 1999 in Suit No.1578 of 1981, praying that the order dated 1st July, 1982, be vacated. The Vaitys also took out Notice of Motion No.2700 of 1999 in the said Suit, praying for the same order. In August, 2000, M/s Kiran Construction Company took out Chamber Summons No.1203 of 2000 in Suit No.1578 of 1981, seeking to amend the plaint so as to join the Respondent Nos.13 to 19 as defendants and also to incorporate a challenge to the decree dated 6.5.1998 passed by the Bombay High Court in Suit No.252 of 1980. The said Chamber Summons was dismissed by the learned Single Judge of the Bombay High Court on 21st June, 2001, and the injunction granted on 1st July, 1982, was vacated. The said order of injunction was also vacated by a common order of even date passed in Notices of Motion No.140 and No.2700 of 1999.7. Three Appeals were filed by the Respondent No.1 herein before the Division Bench of the Bombay High Court, being Appeal Nos.745, 747 and 748 of 2001, all challenging the order dated 21st June, 2001, passed by the Bombay High Court, vacating the interim order of injunction dated 1st July, 1982. The Division Bench of the Bombay High Court allowed all the three Appeals by its orders dated 16th November, 2006 and 17th November, 2006, passed in Appeal No.745 of 2001 in Chamber Summons No.1203/2000 in Suit No.1578/1981 filed by Kiran Construction Company and in Appeal Nos.747 and 748 of 2001 in Notices of Motion Nos.2700 and 140 of 1999 respectively, filed in the said Suit. The amendment of the plaint was allowed and the order of injunction passed on 1st July, 1982, was restored. The present Appeals have been filed against the said orders of the High Court allowing the amendment of the plaint and joining the Respondent Nos.13 to 19 as additional defendants in the

Court's reasoning:
20. From the submissions made on behalf of the respective parties and the materials on record, it is quite apparent that the Chamber Summons No.1203 of 2000 taken out by Kiran Construction Company for leave to amend its suit to incorporate a challenge to the consent decree passed in Suit No.252 of 1980 and also to implead the appellants herein, Mr. K.L. Danani and Mr. Mulchand G. Mehta as defendants in the suit, was heard along with and Notice of Motion No.140 of 1999 filed by the Receiver and Notice of Motion No.2700 of 1999 filed by Vaitys for vacating the order of injunction dated 1st July, 1982, were taken up for hearing together. While Chamber Summons filed by Kiran Construction Company was dismissed, the Notices of Motion filed by theReceiver and the Vaitys were allowed and the order of injunction dated 1st July, 1982, was vacated.21. Since the three appeals before the High Court were filed by Kiran Construction Company against the orders passed by the learned Single judge on the Chamber Summons and the two Notices of Motion, the Division Bench of the High Court, while considering the said appeals, allowed the prayer for amendment of the plaint and as a consequence reversed the learned Single Judges order on the two Notices of Motion and remanded the Notice of Motion for fresh hearing.22. In the Civil Appeal filed by the appellants herein against the three orders passed by the Division Bench, although, by order dated 9th April, 2008, the Appeal was allowed and the order of the Division Bench allowing the amendment prayed for by the Respondent No.1 was set aside, through inadvertence, no orders were passed in respect of the appeals against the orders passed on the two Notices of Motion for vacating the interim order dated 1st July, 1982. It is for clarification of the said order that the interim applications have been filed which are under consideration.23. Once the prayer for amendment of the plaint to include the challenge to the consent decree passed in Suit No.252 of 1980 was disallowed by this Court, the question of restraining them from dealing with the suit properties over which the Respondent No.1 has no established claim would be completely unreasonable and merely because the same had been in force for a long time, would be no ground to allow the same to continue.24. Admittedly, as pointed out by Mr. Mukul Rohtagi and Mr. Ranjit Kumar, learned Senior Advocates, there is no privity of contract between Kiran Construction Company and the Vaitys, its claim is, therefore, restricted to Modern Development Corporation alone and is also dependent upon the right of Modern Development Corporation to specific performance of its agreement with the Vaitys. In other words, until and unless Modern Development Corporation is able to establish a right over the suit properties, Kiran Construction Company can have no claim in respect thereof. Furthermore, since the Receiver continues to be in possession of the suit properties and the properties continue to be in custodia legis, Kiran Construction Company cannot ask for possession of the said properties.25. In our view, the claim attempted to be set up by Kiran Construction Company is highly tenuous and is entirely dependent upon the claim of Modern Development Corporation which has so far not attempted to establish such claim. In such circumstances it would be wholly inequitable to allow the interim order to continue. The same is accordingly vacated.