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High Court Of Delhi
S.J.CHOUDHARY - Appellant
Versus
VANTAGE CONSTRUCTION PRIVATE LIMITED - Respondent
Decided On : 01/01/1996
RECEIVER - APPOINTMENT - SUIT PROPERTY - POSSESSION - DEPRIVING DEFENDANT OF DE FACTO POSSESSION - IRREPARABLE WRONG - ORDER 40 RULE 1 CPC - CONSTRUCTION AGREEMENT - DEVELOPER/BUILDER - DEFACTO POSSESSION - SERIOUS DISPUTES - BONA FIDE DEFENCE - IRREPARABLE MISCHIEF - SUBSTANTIAL AMOUNT EXPENDED - INTEREST CREATED IN SUIT PROPERTY - COMPLETION OF WORK - COURT RECEIVER - PARTNER OF DEVELOPER/BUILDER APPOINTED AS RECEIVER - REVALIDATION OF SANCTION - COMPLETION OF WORK - OCCUPANCY CERTIFICATE - HANDING OVER POSSESSION OF DWELLING UNITS.
Fact of the Case:
Plaintiff and defendants 1-3 entered into an agreement dated 23.4.1987 for the construction of a residential building on the plaintiff's property. The plaintiff was to get 46% of the total saleable space and the defendants were to get 54%. The defendants commenced construction and entered into agreements with defendants 5-13 for the sale of various apartments. The plaintiff and defendants 5-13 jointly filed an application under Order 23 Rules 1 and 3 CPC requesting the appointment of the nominee of defendants 5-13 as the receiver to complete the remaining construction work and hand over possession of the eight flats/apartments to defendants 5-13. Defendants 1-3 objected to the appointment of the receiver.
Finding of the Court:
The court held that the defendants were in defacto possession of the suit property pursuant to the agreement dated 23.4.1987 and that an interest had been created in the immovable property in favor of the defendants. The court also held that there were serious disputes between the plaintiff and the defendants and that the defense raised by the defendants was not wholly untenable. The court further held that it was not advisable to appoint a receiver to take possession of immovable property from the defendants unless there was a well-founded fear that the property would be dissipated or that other irreparable mischief would be done.
Issues: 1. Whether the receiver should be appointed to complete the remaining construction work and hand over possession of the eight flats/apartments to defendants 5-13. 2. Whether the defendants were in defacto possession of the suit property. 3. Whether an interest had been created in the immovable property in favor of the defendants. 4. Whether there were serious disputes between the plaintiff and the defendants. 5. Whether the defense raised by the defendants was wholly untenable. 6. Whether it was advisable to appoint a receiver to take possession of immovable property from the defendants.
Ratio Decidendi: 1. The court held that the receiver should not be appointed to complete the remaining construction work and hand over possession of the eight flats/apartments to defendants 5-13 because it would deprive the defendants of their defacto possession of the suit property and cause irreparable wrong. 2. The court held that the defendants were in defacto possession of the suit property pursuant to the agreement dated 23.4.1987 and that an interest had been created in the immovable property in favor of the defendants. 3. The court held that there were serious disputes between the plaintiff and the defendants and that the defense raised by the defendants was not wholly untenable. 4. The court held that it was not advisable to appoint a receiver to take possession of immovable property from the defendants unless there was a well-founded fear that the property would be dissipated or that other irreparable mischief would be done.
Final Decision: The court dismissed the application for the appointment of the receiver and appointed the partner of defendant No. 1 firm as the Court receiver under Order 40 Rule 1 Civil Procedure Code for completing the remaining work, obtaining completion certificate and occupancy certificate, and to do such other works/acts necessary for the purpose.
( 1 ) IN the suit seeking decree of declarations [ (i) that the collaboration agreement dated 23. 4. 87 stands cancelled and is inoperative and not binding on the plaintiff and that the plaintiff has, therefore, no obligations thereunder to the defendants and that the defendants have no light subsisting thereunder or arising out of that agreement, (ii) that the various agreements to sell used by defendants 1 and 2 for the purposes of entering into further contracts with third parties including defendants 5 to 13 and on which the plaintiff s signatures were obtained as a confirming party are vitiated, inoperative and void and that the plaintiff is not bound by the terms of any of these agreements used by defendants 1 and 2, (iii) that the documents being agreements to sell executed by the plaintiff in blank on 28. 8. 89 and which have been used for purpose- of signing a contract for sale of flats B-2 and E-1 to defendants 1 and 3 respectively are duly cancelled and are vitiated by fraud and mis-representations and are void and as such not binding on the plaintiff and creates no rights in favour of defendants 1 and 3, (iv) that the plaintiff has a right to immediately undertake demolition of the building and structures put up by Defendant No. 2 pursuant to the agreement dated 23. 4. 87 or alternatively order the demolition of the said structures constructed by defendants 1 and 2 in view of the fact that the said structures are in violation of the sanctioned plans and are in violation of the building bye-laws and also in violation of the conditions imposed by the Competent Authority under the Urban Land (Celling and Regulation) Act, the Municipal Corporation of Delhi and Delhi Administration AND for consequential relief of perpetual injunctions [ (i) restraining defendants 1-13 from entering upon the plaintiff s property 20-A, Friends Colony, New Delhi or any part thereof and further restraining the said defendants, firm in any way directly or indirectly interfering with the peaceful use and enjoyment of the said property by the plaintiff, (ii) restraining the defendants from exercising or asserting any rights under or pursuant to any of the agreements executed by the plaintiff and REFERRED TO to in the plaint, (iii) restraining the defendants from interfering with or obstructing the demolition of the structures, presently existing on the property 20-A, Friends Colony New Delhi by the plaintiff] AND a preliminary decree for rendition of accounts and on taking of accounts to pass a final decree for the amount found payable to the plaintiff on settlement of accounts, by IA No. 3188/90 the plaintiff prays for the appointment of a receiver and committing the suit property i. e. property 20-A, Friends Colony, New Delhi to the possession, custody and management of the receiver, by IA No. 7420/90 the plaintiff prays for appointment of a receiver and commit the suit property to the possession, custody and management of the recover, pending the disposal of the suit, by IA No. 8565/95, defendants 5- 13 pray for appointment of the nominee of these defendants as a receiver in respect of dwelling units A-1, A-2, C-1, C-2, B-1, and portion of B-2 in the suit property for the purpose of doing everything necessary to complete the construction of these dwelling units including getting plans revalidated, signing of all relevant applications and for the purpose of obtaining occupation and completion certificates also authorising receiver to hand over the possession of these dwelling units to defendants 5-13 after obtaining completion certificate, by IA No. 11266/95 under Order 23 Rules 1 and 3 CPC, plaintiff and defendants 5 to 13 have stated that at the request of these defendants the plaintiff has agreed to their nominee Mr. Vijay Bagia son of Shri S. N. Bagla r/o 30-A/1, Friends Colony (West), New Delhi being appointed as the receiver on the said defendants jointly and severally agreeing to (a) bear all costs of receiver, (b) be
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