Case: Bharat Karsondas Thakkar Vs. M/S. Kiran Construction Co.

2. On 27.5.1949 one Sowar Ramji Vaity was given a grant by the Collector of Thane, which entitled him to lease of the lands in Serial Nos.83-91 in village Mulund for a term of 999 years. Sowar Ramji Vaity died in 1965 leaving behind him four legal representatives, namely, Jagannath, Babu, Vishnu and Bhaskar. On 1.10.1973 the Vaitys entered into an Agreement with one K.L. Danani to sell their rights and interests in the said land for a total consideration of Rs.2 lakhs. In between April and June 1974, Mr. K.L. Danani constituted a partnership firm with one Mr. K.B. Thakkar and S.S. Thakkar under the name of M/s Swas Construction Company. B.K. Thakkar, the appellant herein, who was then a minor, was also admitted to the benefits of the partnership firm. As his contribution towards the partnership firm K.L. Danani brought the benefits of the said Agreement dated 1.10.1973 to the partnership firm. In 1976, with the enactment ofthe Urban Land (Ceiling and Regulation) Act, 1976, K.L. Danani claiming to be in possession of the lands in question under the Agreement dated 1.10.1973 filed a statement as required under Section 6(1) of the aforesaid Act. On 12.6.1979 the Government of Maharashtra executed a lease in favour of the Vaitys for a total term of 60 years.3. Soon, thereafter, on 18.6.1979 the Vaitys entered into another Agreement with M/s Modern Development Corporation granting them development rights over the same properties. Clause 14 of the Agreement mentioned the fact that the Vaitys had entered into an Agreement to sell the said lands to M/s Thakkar and Associates. M/s Modern Development Corporation, in their turn entered into an Agreement with Kiran Construction Company, the respondent No.1 herein, to transfer its beneficial interest in the suit land, except for Sl.No.91, in favour of the said respondent No.1. Clause 12 of the said Agreement required Modern Development Corporation to obtain confirmation from M/s Thakkar and Associates that there was no subsisting Agreement for sale in their favour in respect of the property agreed to be sold.4. On 18.2.1980 the present appellant Bharat K. Das Thakkar and K.B. Thakkar filed Suit No.252 of 1980 in the Bombay High Court against K.L. Danani and S.S. Thakkar seeking a declaration that a partnership had subsisted between them and that K.L. Danani and S.S. Thakkar have retired from Swas Construction Company, and, in the alternative, for an order of dissolution of partnership, accounts, costs and other reliefs. On Notice of Motion No.283 of 1980 filed by the appellant and K.B.Thakkar in Suit No.252 of 1980, K.L. Danani gave an undertaking not to part with the possession of the suit land pending disposal of the Notice of Motion. The said Notice of Motion No.283 of 1980 was finally disposed of on 9.10.1980 and a Court Receiver was appointed by the Bombay High Court and put into possession of the suit lands.5. On 15.5.1981 the Vaitys terminated the Agreement dated 18.6.1979 with M/s Modern Development Corporation Limited. Such termination was followed by Suit No.1578 of 1981 instituted by the respondent No.1 on 7.9.1981 against the Vaitys and the partners of M/s Modern Development Corporation Limited for specific performance of the Agreements allegedly executed on 18.6.1979 and 24.8.1979. On 14.9.1981 the Bombay High Court restrained the Vaitys and the partners of M/s Modern Development Corporation Limited from selling, transferring or further parting with possession of the suit lands. Notice of Motion No.1271 of 1981 on which the above restraint order was passed was heard on 1.7.1982 and the Vaitys were restrained during the pendency of the Suit No. 1578 of 1981 from selling, transferring, encumbering the suit property forming the subject matter of the Agreement dated 18.6.1979 entered into by the Vaitys with M/s. Modern Development Corporation Limited.6. During pendency of the said suit for specific performance filed by respondent No.1, all the parties to Suit No.252 of 1980 arrived at a comprehensive settlement which was reduced into consent terms which were filed in the said suit pending before the Bombay High Court. By its order dated 6.5.1998 the Bombay High Court passed a decree in Suit No.252 of 1980 on the basis of the consent terms filed by the parties to the suit. By virtue of the said decree, the Vaitys, inter alia, admitted that an Agreement had been executed on 1.10.1973 in favour of K.L. Danani and that M/s Swas Construction Company was placed in possession of the suit lands on 3.8.1975.7. Under the consent decree the Court Receiver was entrusted to discharge certain functions which had been agreed upon and recorded in the consent decree. Pursuant thereto in January 1999 the Court Receiver took out a Notice of Motion No.140 of 1999 in Suit No.1578 of 1981 filed by the Respondent No.1 praying that the order of injunction made on 1.7.1982 be vacated. On 25.8.1999 the Vaitys also took out Notice of Motion No.2700 of 1999 in the aforesaid suit for the same relief. During the pendency of the suit the respondent No.1 took out Chamber Summons No.1203 of 2000 in his suit seeking to amend the plaint by joining the respondent No.13 to 19 as defendants and to also challenge the consent decree passed by the Bombay High Court in Suit No.252 of 1980 on 6.5.1998. The High Court dismissed the Chamber Summons No.1203 of 2003 filed by the respondent No.1 in his suit and also vacated the injunction granted on 1.7.1982. As a consequence the other two notices of Motion for vacating the order of injunction dated 1.7.1982 were allowed. Aggrieved by the said order of the learned Single Judge dated 21.6.2001, the respondent No.1 filed Appeal No. 745 of 2001 before the Division Bench of the High Court. On 16.11.2006 the High Court allowed the aforesaid appeal, thereby allowing the amendment of the plaint and directed that the amendment to the plaint be effected accordingly.

Court's reasoning:
21. Having carefully considered the submissions made on behalf of the respective parties, and the decisions cited on their behalf, we are of the view that the Division Bench of the High Court erred in law in allowing the amendment of the plaint sought for by the respondent No.1 herein as the plaintiff in the suit. Even if the bar of limitation is not taken into account, the plaintiff, namely, the respondent No.1 herein, is faced with the ominous question as to whether the amendment of the pleadings could have at all been allowed by the High Court since it completely changed the nature and character of the suit from being a suit for specific performance of an agreement to one for declaration of title and possession followed by a prayer for specific performance of an agreement of sale entered into between its assignee and the vendors of the assignees. Along with that is the other question, which very often raises its head in suits for specific performance, that is, whether a stranger to an agreement for sale can be added as a party in a suit for specific performance of an agreement for sale in view of Section 15 ofthe Specific Relief Act, 1963. The relevant provision of Section 15 with which we are concerned is contained in clause (a) thereof and entitles any party to the contract to seek specific performance of such contract. Admittedly, the appellant herein is a third party to the agreement and does not, therefore, fall within the category of "parties to the agreement". The appellant also does not come within the ambit of Section 19 of the said Act, which provides for relief against parties and persons claiming under them by subsequent title. This aspect of the matter has been dealt with in detail in Kasturis case (supra). While holding that the scope of a suit for specific performance could not be enlarged to convert the same into a suit for title and possession, Their Lordships observed that a third party or a stranger to the contract could not be added so as to convert a suit of one character into a suit of a different character.22. In the instant case, the appellant obtained the consent decree on the strength of an agreement said to have been entered into between the Vaitys and K.L. Danani who brought the said agreement to the partnership which was formed by him with two other persons. Although, this fact was brought to the notice of the learned advocates for the respondent No.1 on 27th March, 1984, no steps were taken by the said respondent to amend the plaint at that stage. Instead, the respondent No.1 waited till a consent decree was passed before applying for amendment of the plaint. The proper course of action for the respondent No.1 would have been to challenge the consent decree not in its suit for specific performance, but in a separate suit for declaration that the consent decree ought not to have been passed and the same was not binding on the respondent. By seeking amendment of the plaint in its suit for specific performance, the respondent No.1 has created its own difficulties by substantially changing the nature and character of the original suit, which is not permissible in law. If, as was held in Durga Prasads case (supra), the impleadment of the appellant was only for the purpose of joining him in the conveyance if the respondent No.1s suit ultimately succeeded, the ratio of the said decision would possibly have been applicable to the facts of this case. Unfortunately, that is not the case here, since the respondent No.1 has by amending the plaint prayed for a declaration that the consent decree obtained by the appellant was not binding on him and also for a declaration that the consent decree was null and void and was liable to be quashed.23. In our view, the decision of this Court in Durga Prasads case (supra), cannot be brought to the aid of the case made out by respondent No.1. Furthermore, the Division Bench of the High Court also appears to have committed an error in observing that the decision in Anil Kumar Singhs case (supra) was not applicable to the facts of this case, despite the fact that on a consideration of the provisions of Order 1 Rule 10 and Order 22 Rule 10 of the Code, this Court held that since the plaintiff in the said matter was merely seeking the specific performance of an agreement of sale, any attempt to implead a third party to the contract in the suit would be hit by the provisions of Section 15 (a) ofthe Specific Relief Act, 1963. In fact, in Anil Kumar Singhs case (supra) in a suit for specific performance, the respondent, who was not a party to the contract but wanted to be impleaded as a defendant on the ground that he had acquired subsequent interest as a co-owner by virtue of a decree obtained from the court, was held not entitled to be joined as defendant either under Order 1 Rule 3 or under Order 1 Rule 10(ii) of the Code having regard to the provisions of Sections 15 and 6 ofthe Specific Relief Act, 1963.24. As it appears the respondent No.1, was proceeding before a wrong forum to establish its stand that the decree obtained by the appellant was a nullity and was not binding on it.25. In that view of the matter, although, we are setting aside the order of the Division Bench of the High Court impugned in this appeal, the respondent No.1 may, if so advised, file a separate suit to challenge the consent decree in view of the fact that he had been pursuing his claim before the wrong forum.