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2021 Supreme(Bom) 417

IN THE HIGH COURT OF BOMBAY AT NAGPUR
A.S. CHANDURKAR, N.B. SURYAWANSHI, JJ.
Indus Cooperative Housing Society Ltd., Nagpur and another - Appellant
Versus
Nagpur Improvement Trust and others - Respondent
F.A. No. 1430 of 2009
Decided on : 07-01-2021

Advocates:
Advocate Appeared:
For the Appellant :C.S. Kaptan, Senior Advocate with P. K. Mohta
For the Respondent: R.O. Chhabra

The plaintiff must have an enforceable legal right to maintain a suit for recovery of damages.

Headnote:

FRAUD - Recovery of Damages - Code of Civil Procedure, 1908 - Section 96 - Plot No. 57 admeasuring 4942 square feet was allotted to defendant Nos. 2 to 5 on lease. Plaintiff No. 2 participated in a public auction for the plot and was the highest bidder, but no confirmation letter was issued to him. Defendant No. 1 reinstated the plot in favor of defendant Nos. 2 to 5. Plaintiff filed a suit for recovery of damages to the tune of Rs.15,00,00,000/- (Rs. fifteen crores) alleging fraud and misrepresentation by the defendants. The trial Court dismissed the suit, and the plaintiffs appealed. The High Court upheld the trial Court's decision, finding that the plaintiff had no enforceable legal right with regard to the plot and that the suit was not maintainable.

Fact of the Case:

The dispute centered around Plot No. 57, which was initially allotted to defendant Nos. 2 to 5 on lease. Plaintiff No. 2 participated in a public auction for the plot and was the highest bidder, but no confirmation letter was issued to him. Defendant No. 1 reinstated the plot in favor of defendant Nos. 2 to 5. The plaintiffs filed a suit for recovery of damages to the tune of Rs.15,00,00,000/- (Rs. fifteen crores) alleging fraud and misrepresentation by the defendants. The trial Court dismissed the suit, and the plaintiffs appealed.

Finding of the Court:

The High Court found that the plaintiff had no enforceable legal right with regard to the plot and that the suit was not maintainable. The Court also held that the suit was not barred by limitation and was not bad for non-joinder of the State Government as a necessary party.

Issues: 1. Whether the rejection of the plaintiff's bid by the defendant No. 1 was mala fide? 2. Whether the plaintiff suffered damages due to the acts of the defendant No. 1? 3. Whether the suit was hit by the provisions of res judicata and suffered from mis-joinder of parties? 4. Whether the suit was rightly held to be barred by limitation? 5. Whether the judgment of the trial Court deserves to be interfered with?

Ratio Decidendi: The plaintiff had no enforceable legal right with regard to the plot, and the suit was not maintainable. The suit was not barred by limitation and was not bad for non-joinder of the State Government as a necessary party.

Final Decision: The High Court upheld the trial Court's decision, and the appeal was dismissed.

JUDGMENT :

A.S. CHANDURKAR, J.

1. This appeal under Section 96 of the Code of Civil Procedure, 1908 has been preferred by the original plaintiffs who are aggrieved by the judgment dated 5-5-2009 in Special Civil Suit No. 333/1999 passed by the 4th Joint Civil Judge, Senior Division, Nagpur dismissing the suit for recovery of an amount of Rs.15,00,00,000/- (Rs. Fifteen Crores) as damages.

2. Facts relevant and as pleaded in the plaint are that the dispute between the parties centres around Plot No. 57 admeasuring 4942 square feet which was part of Central Avenue Scheme. On 31-10-1956 the said plot was allotted to the respondent Nos. 2 to 5defendant Nos. 2 to 5 on lease. Various conditions were imposed while making such allotment which included specifying the time limit for commencement and completion of construction thereon. The defendant Nos. 2 to 5 did not abide by the conditions as imposed as a result of which on 6-10-1964 a show cause notice was issued by the Nagpur Improvement Trust respondent No. 1/defendant No. 1. Thereafter on 8-3-1965 the defendant No. 1 cancelled the allotment of Plot No. 57 that was made in favour of the defendant Nos. 2 to 5. Possession of that plot was taken from them on 23-1-1972. A fresh auction was thereafter conducted on 21-1-1974. In that auction the plaintiff No. 2 had bid an amount of Rs.3,12,000/which came to be accepted and 10% of the bid amount Rs.31,200/came to be deposited with the defendant No. 1. The defendant Nos. 2 to 5 being aggrieved by the cancellation of allotment of Plot No. 57 approached this Court by filing Special Civil Application No. 102/1974. That Special Civil Application came to be admitted. During pendency of the said proceedings, the defendant Nos. 2 to 5 moved Civil Application No. 2233/1980 seeking to amend the said Special Civil Application. Civil Application No. 2233/1980 came to be rejected on 30-9-1980 and on the same day, the defendant Nos. 2 to 5 were permitted to withdraw Special Civil Application No. 102/1974. Thereafter on 1-10-1980 the plaintiff No. 2 deposited further amount of Rs.21,200/with the defendant No. 1. A meeting of the defendant No. 1 was held on 27-2-1981 in which it was resolved to reallot Plot No. 57 in favour of the defendant Nos. 2 to 5. The plaintiff No. 2 being aggrieved filed Writ Petition No. 843/1981 in this Court on 18-3-1981. In that writ petition it was prayed that the auction proceedings and the sale conducted on 21-1-1974 in favour of the plaintiff No. 2 be confirmed and it be declared that re-allotment of Plot No. 57 in favour of the defendant Nos. 2 to 5 was illegal. That writ petition was allowed by the learned Single Judge on 15-12-1981 and the resolution dated 27-2-1981 passed by the defendant No. 1 restoring the plot in favour of the defendant Nos. 2 to 5 was held to be illegal. The defendant Nos. 2 to 5 then approached the Hon’ble Supreme Court by filing Civil Appeal No. 1683/1982. That appeal was allowed on 19-3-1996 and the judgment in Writ Petition No. 843/1981 came to be set aside. Review petition filed by the plaintiff No. 2 was also dismissed. According to the plaintiff No. 2, the defendant No. 1 had taken different stands in the proceedings before the Court. Such act on the part of the defendant No. 1 was mala fide resulting in prejudice being caused to the plaintiffs. This according to the plaintiffs furnished them a cause of action to sue the defendants for recovery of damages to the tune of Rs.15,00,00,000/- (Rs. fifteen crores). The plaintiff No. 1 is a cooperative housing society registered in 1986 of which the plaintiff No. 2 is the Chief promoter.

3. In the written statement filed by the defendant No. 1 all allegations as made in the plaint were denied. Reference was made to the earlier litigation between the parties and the fact that by the judgment of the Hon’ble Supreme Court dated 19-3-1996 the controversy in question stood resolved. The allegation of fraud as made by the plaintiffs was specifically denied an

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