High Court Of Delhi
MASTER BUILDERS - Appellant
Versus
UNITED STATES OF AMERICA - Respondent
First Appeal (OS) 38 of 1991
Decided On : 02/15/1991
INJUNCTION - RESTRAINING ORDER - ORDER 39 RULES 1 AND 2 READ WITH SECTION 151 OF THE CODE OF CIVIL PROCEDURE - CONTRACTOR'S RIGHT TO REMAIN IN PROPERTY AFTER TERMINATION OF CONTRACT - WRONGFUL TERMINATION OF CONTRACT - DAMAGES FOR BREACH OF CONTRACT.
Fact of the Case:
Plaintiff, the United States of America, filed a suit against the defendant, a building contractor, for recovery of possession of property No. 16, Amrita Shergill Marg, New Delhi. Plaintiff alleged that the defendant had completed construction on the property but was refusing to vacate it despite termination of the contract. Defendant claimed that the termination was wrongful and that it had a right to remain in the property as security for outstanding dues.
Finding of the Court:
The court held that the contractor had no right to remain in the property after termination of the contract. The court found that the plaintiff was the owner of the property and that the defendant had no transfer of possession in its favor. The court also found that the defendant's claim for outstanding dues was a matter for a separate suit for damages for breach of contract.
Issues: 1. Whether the contractor has a right to remain in the property after termination of the contract by the owner? 2. Whether the termination of the contract was wrongful? 3. Whether the contractor is entitled to damages for breach of contract?
Ratio Decidendi: 1. The court held that the contractor has no right to remain in the property after termination of the contract by the owner. The court found that the plaintiff was the owner of the property and that the defendant had no transfer of possession in its favor. The court also found that the defendant's claim for outstanding dues was a matter for a separate suit for damages for breach of contract. 2. The court did not decide whether the termination of the contract was wrongful. The court held that even if the termination was wrongful, the contractor would still not have a right to remain in the property. 3. The court held that the contractor is entitled to damages for breach of contract. The court found that the defendant had a claim for outstanding dues and that this claim was a matter for a separate suit.
Final Decision: The court dismissed the appeal and upheld the order of the lower court granting an injunction restraining the defendant from obstructing the plaintiff's entry into the property.
( 1 ) THIS appeal is preferred against the order dated 7th February 1991 passed on the application filed under Order 39 Rules I and 2 read with Section 151 of the Code of Civil Procedure for restraining the defendant by means of an ad interim injunction from resisting and obstructing the entry of the plaintiff in property No. 16. Amrita Shergill Marg. New Delhi and also restraining the defendant from entering upon the same. The learned Judge granted the plaintiff s application and the defendants were directed to remove themselves from the property in question during the pendency of the suit and were further restrained from resisting or obstructing entry of the plaintiff of any of the officers or others all on behalf thereto. The learned Judge also gave some directions as to how the order passed on the application is to come into effect. The directions given by the learned Judge are as under ;-
" (1) This order will become effective from February 18, 1991, 12. 00 noon; (2) Plaintiff will file the requisite undertaking on or before February, 16,1991; (3) Ms. Freyan Desai, Advocate, C/o Dua and Associates, 204-206 Tolstoy House, Tolstoy Marg, New Delhi, and Mr. R. S. Sodhi, Architect, C-48, Panchsheel Enclave, New Delhi, are appointed joint Local Commissioners to respectively supervise and record the stage of construction of the property in question. The representation of the parties shall be allowed to be present at the site at the time of execution of the commission. The Local Commissioners shall also record any observation or objection as may be requested by either of the parties. They shall take video film of the property both of its exterior and interior and may also take photographs, if they so choose. No obstruction will be caused to the Local Commissioners in the discharge of their duties by any one and they shall have free access to any portion of the property. Either of the parties may submit plans of the property to the Local Commissioners in order to expedite their work. As to whether they should visit the site jointly or individually at different times shall be left to the discretion of the Local Commissioners. They shall complete their work on or before February 17, 1991. (4) Ms. Freyan Desai, Advocate, shall further supervise the exit of the defendants into the property in question on February 18 1991 at 12. 00 noon, and entry of the plaintiffs at the same time. She will report compliance to the court thereafter. (5) The plaintiff shall be free to carry out any further construction/ improvement in the property after the order becomes operative. Each of the Local Commissioners shall be paid Rs. 10,000. 00 as her/his fee in the first instance, which I have fixed tentatively, at the rate of Rs. 2000. 00 per day. The fee shall be exclusive of all the expenses which the Local Commissioners might have to incur. The fee and the expenses shall be borne by the plaintiff and will be subject to further orders of the Court. The Local Commissioners shall submit their report immediately after execution of the commission. "
( 2 ) THE necessary facts stated by the learned Judge are as follows :-
(I) "the plaintiff is the Federal Government of the United States of America having its diplomatic mission in New Delhi. There are two defendants. First defendant is stated to be a partnership firm engaged in the business of engineering and building contracts. Second defendant is the managing partner of the first defendant. At this stage itself, it may be noted that the first defendant earlier filed a suit. Suit No. 932 of 1986, against the Government of the United States of America and their contracting officer for recovery of over Rs. 1. 18 crores for the work done on property bearing No. 16, Amrita Shergill Marg. and also No. 14, Amrita Shergill Marg. The two suits have been consolidated by an order dated November 26, 1990. Since there are two cross suits, it will be appropriate to use the names of the parties instead of desc
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