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2011 Supreme(Mad) 3913
High Court of Judicature at Madras
R. BANUMATHI & B. RAJENDRAN
Arul Nayagam & Another
Versus
Y. Subba Rao & Others
O.S.A.Nos.246 to 248 of 2011
Decided on : 13-09-2011
For the Appellants:T.V. Ramanujam Senior Counsel for S.S. Rajesh, Advocate.
For the Respondents:R. Muthukumarasami, Senior Counsel for P. Subba Reddy, Advocate.
The subsequent conduct of a party can render a compromise decree inoperative, justifying the filing of a fresh suit. The appointment of a Receiver may be necessary to prevent further irreparable loss to the parties.
Headnote:
Joint Development Agreement - Property Dispute - Income Tax Act, 1961, Section 230A, 269UC, 269UP - Compromise Decree - Receiver Appointment - Interim Injunction - Building Regulations Violation
Fact of the Case:
The Respondents, owners of certain properties, entered into a Joint Development Agreement with the 1st Appellant. Disputes arose regarding the construction, possession, and sale of the built-up area. The Respondents filed a suit seeking various reliefs, including a declaration that the compromise decree was null and void, and filed applications for the appointment of a Receiver and interim injunction.
Finding of the Court:
The Court found that the 1st Appellant had violated building regulations, failed to perform obligations under the compromise decree, and engaged in unauthorized property transactions. The Court appointed the 1st Respondent as Receiver to manage the property and granted an interim injunction restraining the Appellants from dealing with the property.
Issues: The issues included the validity of the compromise decree, non-performance of obligations, building regulations violation, and unauthorized property transactions.
Ratio Decidendi: The Court held that the subsequent conduct of the 1st Appellant rendered the compromise decree inoperative, justifying the filing of a fresh suit. The Court also found that the appointment of a Receiver was necessary to prevent further irreparable loss to the Respondents.
Final Decision: The Court dismissed the appeals, upheld the appointment of the Receiver, and granted the interim injunction. The Receiver was directed to deposit rents to the credit of the suit and manage the property, while the interim injunction against property dealings was maintained.
R.BANUMATHI,J
1. Challenge in these appeals is the common order in O.A.Nos.1197 and 1198 of 2008 and A.No.5792 of 2009 in C.S.No.1042 of 2008 dated 07.07.2011 granting temporary injunction restraining the Appellants 1 and 2 from in any way dealing with or alienating by way of sale, lease or mortgage, any part of the suit property pending disposal of the suit and appointing the 1st Respondent-Subba Rao as Receiver to manage the entire suit property and to collect the rental income periodically and file report once in three months and dismissing the application for rejection of plaint C.S.No.1042 of 2008. Arguments in all three Original Side Appeals were heard together and all three Original Side Appeals shall stand disposed of by this common Judgment.
2. Briefly stated case of Respondents/Plaintiffs is as follows:-
(i) Respondents 1 and 3 are owners of 'A' and 'B' schedule properties respectively in Plot No.617 and 618 situated at Indira Nagar comprised in S.F.Nos.51 (Part) and 55 (Part) of Tiruvanmiyur. 1st Respondent is the owner of 2 grounds and 870 sq. ft. and 3rd Respondent is the owner of 2 grounds 1104 sq. ft. both together measuring 4 grounds 1974 sq. ft. i.e. 11, 574 sq. ft. In order to develop both the plots, Respondents 1 and 3 and 1st Appellant have entered into a Joint Development Agreement on 14.10.1992 and possession of the property was handed over to the 1st Appellant on the same date by Respondents 1 and 3. Respondents 1 and 3 have also given power of attorney to 1st Appellant on 25.01.1993 under Doc.Nos.29 and 30 of 1993. Thereafter, both Respondents 1 and 3 and 1st Appellant have entered into a Memo of Understanding (MOU). As per the Joint Development Agreement dated 14.10.1992, 1st Appellant should complete the construction of the superstructure within 24 months from the date of taking vacant possession of the property. As per the original Joint Development Agreement, the project should have been completed on or before 14.10.1994, but the 1st Appellant could not complete the construction as agreed. Thereafter, another MOU dated 02.12.1993 was entered into between the parties whereby the 1st Appellant agreed to complete the construction on or before 31.01.1996.
(ii) As per the original plan, 1st Appellant had applied for planning permission for the construction of basement; ground floor and further three floors for residential building. Subsequently, 1st Appellant had given revised plan on 05.10.1994, 02.12.1994 and 28.06.1995 respectively. As per the revised plan, sanction was obtained for (a) Basement; (b) Ground floor; (c) Mezzanine and three floors. In violation of the approval and rules, 1st Appellant has converted the mezzanine floor as a pucca floor and thereby special building has been converted to multi-storied building. Without handing over possession of the built up area, 1st Appellant has rented the same to third parties and collecting the rents every month.
(iii) As per MOU dated 02.12.1993, Respondents 1 and 3 together are entitled to 50% of the built up area. 1st Respondent shall take 25% in the area of basement, ground floor and mezzanine floor. 3rd Respondent had entered into a sale agreement on 29.11.1997 with the 1st Appellant to sell his share of built up area and also undivided share of land for a total sum of Rs.93,00,000/-, out of which a sum of Rs.18,30,000/- has been paid by the 1st Appellant on various dates and the balance is Rs.74,70,000/-. Since 1st Appellant has failed to perform his part of contract, Respondents 1 and 3 have filed suit C.S.No.179 of 1999 and C.S.No.202 of 1999 respectively for specific performance and 1st Appellant had also filed suit in C.S.No.277 of 1999 for specific performance and parties have entered into a compromise in C.S.No.277 of 1999. As per the compromise dated 30.04.2001 deducting Rs.18,30,000/-, balance sale consideration of Rs.74,70,000/- is to be paid by the 1st Appellant to the 3rd Respondent within six months. In the said compromise, 1
