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IN THE HIGH COURT OF DELHI AT NEW DELHI
HONBLE MR. JUSTICE S. RAVINDRA BHAT, J.
CAPT. SURESH GULATI - Plaintiff
Versus
SHRI RAJIV CHAWLA AND ORS.- Defendants
IA Nos. 13084/2008, 7566/2009, 7906/2009 and 9657/2009 in CS(OS) 2257/2008
Decided on: 23.10.2009
specific performance - property dispute - Kasturi v. Iyyamperumal & Ors -(2005) 6 SCC 733; Ramesh Hirachand Kundanmal v. Municipal Corporation of Greater Bombay & Ors, 1992 (2) SCC 524, and Mrs. Madhu Puri v. Moti Lal Puri 2005 (VII) AD 737
Fact of the Case:
The plaintiff seeks specific performance and consequential relief for a property purchase agreement. The defendant claims the property was sold to a third party before the suit was filed.
Finding of the Court:
The court found that the plaintiff's request to implead the proposed defendants and amend the suit should be accepted. The subsisting injunction against the original defendants should be confirmed, and the newly added defendants should not part with possession or create any third party rights in the property.
Issues: The issues revolve around the sale of the property to a third party, the plaintiff's right to seek redress, and the propriety of impleading the proposed defendants.
Ratio Decidendi: The court held that the plaintiff's right to seek redress against the transaction involving the proposed defendants cannot be precluded, and impleading them would avoid multiplicity of proceedings.
Final Decision: The applications are disposed of in favor of the plaintiff, allowing the impleadment of the proposed defendants and confirming the injunction against the original defendants.
Based on the provided legal document, the key points are as follows:
The plaintiff seeks specific performance of a property sale agreement and requests to implead a third party who claims ownership of the property. The court finds that the plaintiff’s right to pursue redress against a transaction involving a third party cannot be precluded, and adding such parties helps prevent multiple proceedings (!) (!) .
The court permits the plaintiff to amend the suit and to include the proposed defendants as parties, confirming that the existing injunction against the original defendants should be maintained. The newly added defendants are restrained from transferring the property or creating third-party rights until further orders (!) (!) .
The facts reveal that the plaintiff entered into an agreement to purchase the property from the builder, who was not the owner but had a collaboration agreement with the actual owners. Payments were made, but the ownership was subsequently transferred to third-party purchasers before the suit was filed (!) (!) .
The defendants, including the owners and builder, argue that the sale to the third-party purchasers was lawful and that the plaintiff’s agreement was not fully executed or enforceable. They also contend that the plaintiff interfered with construction activities, leading to the property being sealed by authorities (!) (!) .
The plaintiff alleges that the sale to the third-party defendants was not disclosed and was made to defeat his rights. The plaintiff emphasizes that the transaction appears sham-like and that the defendant’s sale deed is not bona fide. The plaintiff’s right to seek redress remains unaffected by the subsequent sale (!) (!) .
The third-party purchasers claim to be bona fide buyers without notice of prior agreements and argue they should not be embroiled in litigation regarding the property. They assert that their purchase was for valuable consideration, and they are innocent of any wrongdoing (!) .
The court observes that the sale to the third-party defendants occurred before the filing of the suit but notes that this does not conclusively bar the plaintiff from seeking relief. The court highlights the importance of transparency and the need to prevent multiplicity of proceedings (!) (!) .
The court recognizes that the plaintiff had issued a legal notice to enforce the agreement, and there is evidence suggesting that the defendants did not fully disclose all relevant facts. The conduct of the defendants, including collusion and withholding information, supports the plaintiff’s claim that his rights should be protected (!) (!) .
The court clarifies that third-party purchasers with some semblance of interest or title in the property can be impleaded in such proceedings. The presence of a registered sale deed and the nature of the interest are relevant factors in determining their necessity as parties (!) (!) .
Overall, the court disposes of the applications by allowing the impleadment of the third-party defendants, confirming the existing injunction, and restraining the new defendants from transferring or creating rights in the property until further orders. The defendants are also permitted to pursue rectifications to bring the property in line with building regulations, without prejudice to the plaintiff’s rights (!) (!) (!) .
These points encapsulate the court’s findings, the procedural directions, and the overarching principles applied in this case.
S.RAVINDRA BHAT, J.
1. The plaintiff, in this suit – which seeks decree for specific performance, seeks to implead a third party, (by I.A. No. 7566/2009) who, the defendant claims, is owner of the suit property; he also seeks amendment to the suit, to incorporate the claim for cancellation of the sale deed, executed in favour of the said third party respondents (hereafter called “proposed defendant”). The plaintiff also seeks confirmation of the injunction granted earlier, (in I.A. No. 13084/2008) and for an order restraining the proposed defendants from transferring the suit property, or altering the status quo. (I.A. No. 7906/2009). The defendant also seeks vacation of the injunction granted in favour of the plaintiff by order dated 24-10-2008, (by I.A. No. 9657/2009).
2. The facts, to the extent they are not disputed, are stated as follows. The plaintiff entered into an agreement to purchase property, from Defendant No.1 (hereafter “the builder”) on 23-2-2005. The said defendant was concededly not the owner of the property; he had entered into a “collaboration agreement” with the then owners of the property, i.e. Defendant Nos. 2-4 (“owners”) they are not parties to the said agreement to sell (executed in favour of the plaintiff). The said owners had entered into a collaboration agreement with the builder, whereby he was asked to construct on the property, and also authorized to negotiate and sell the suit property. The plaintiff says that the total consideration agreed to be paid was Rs. 28 lakhs; according to him, Rs. 18 lakhs was paid. The builder does not admit payment of Rs. 18 lakhs, but concedes that Rs. 14 lakhs was paid to him. It is not in dispute that the property was sealed by orders of the Municipal Corporation of Delhi, on the allegation that the construction was not in accordance with the sanctioned plan.
3. The plaintiff refers to a legal notice, issued to the builder, calling upon it to adhere to the terms of the agreement, and convey the property, since he was informed of the move to dispose of the property. The builder, through his counsel, replied, refuting the allegations. However, he did not, at that stage, mention that the suit property had been sold or transferred by its owners. The plaintiff therefore, filed the present suit, claiming specific performance and consequential relief.
4. The defendants filed their written statements; the owners disclosed that the suit property had been sold to the proposed defendant, through a registered sale deed dated 30-4-2008, for a total consideration of Rs. 54 lakhs; the purchasers were proposed defendants, sought to be impleaded in the suit. A reading of the written statement of the builder and the owners (i.e. Defendant Nos. 2-4) shows that according to them, the plaintiff interfered with the manner of construction of the property, which led to the sealing of the premises. It is alleged by the builder that the plaintiff was not interested in completing the transaction. The builder further argues that the owner had filed a suit, seeking declaration that the collaboration agreement was not lawful and binding; on being advised, the builder agreed not to interfere with the said owners’ rights, as a result of which the suit was disposed of, by the trial court, on 28-4-2008. A copy of that order has been produced.
5. The plaintiff submits that the defendants never revealed that the third party (proposed defendant) was ever sold the property, and that the agreement to sell entered into by him, was ever repudiated. It is submitted that the builder and owner colluded with each other to defeat the plaintiff’s rights, deliberately, with the consciousness that he had paid valuable consideration, and agreed to purchase the property after it was duly constructed. The plaintiff refutes the defendants’ submissions that he had interfered with the construction.
6. The plaintiffs’ senior counsel submits that the entire story about the builder abandoning his rights under th
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