R.L. Gupta, J.
(1) Plaintiff has filed (his suit for specific performance of an agreement dated 6-7-1977 against the defendants and also for a declaration that the plaintiff is the lawful tenant of property bearing No. 27, Kasturba Gandhi Marg, New Delhi (hereinafter described as 27 KGM). The allegations are that Dr. Raghunath s/o R. B. Moolraj was the owner of lessee rights of a plot of land measuring 4795.2 sq. meters (1.185 acres or 5735 so. yards) commonly known as 27 KGM. These rights had been granted by the Secretary of State for India in Council in his favor by lease deed dated 8-2-1933 registered on 19th June, 1933. On 18th March, 1971 the plaintiff (then known as Ansal and Sehgal Properties P. Ltd.) entered into an agreement with Dr. Raghunath regarding 27 Kgm for construction of a cinema cum multi-storeyed super-structure thereon. A power of attorney and partnership agreement were also executed. Under the aforesaid agreement the plaintiff paid Rs. 1,46.0001- to Dr. Raghunath by bank draft No. 001997/2/71 dated 22-3-1971 drawn on the New Bank of India, 'L' Block, Connaught Circus, New Delhi. Another sum of Rs. 2.54,0001- were deposited on 5-4-71 by the plaintiff in Reserve Bank of India by cheque No. 207305 on New Bank of India regarding the decretal amount due from Dr. Raghunath in Suit No. 360 of 1969, namely, Vijay Kumar v. Dr. raghunath, decided on 16-3-1971 by this Court. Dr. Raghunath received from the plaintiff another amount of Rs. 50,0001- by cheque No. 20732S dated 15-4-1971 vide a receipt. He also executed a lease deed dated 22-3-1971 at the rate of Rs. 5001- per month in favor of the plaintiff for the entire premises in dispute having a double storeyed building thereon. Vacant physical possession of ens room, verandah and rear lawn attached with it in the said house was given by Dr. Raghunath to the plaintiff on 23-3-1971. Dr. Raghunath is also alleged to have given vacant physical possession of two other rooms and attached accommodation of this house to the plaintiff. There was exchange of certain correspondence between Dr. Raghunath and the plaintiff wherein Dr. Raghunath sought to resile from the agreement. Unfortunately he expired at New Delhi on 25-2-1972. On 18-9-1972 the plaintiff filed suit No. 405172 for recovery of Rs. 10 lacs in this Court. On 6-7-1977, defendants 1 to 11 entered into an agreement with the plaintiff, the terms of which were induced into writing. Annexure A to the plaint is a copy of 'the agreement. The terms of that agreement were that the plaintiff was to construct and promote with its own funds a multi-storeyed super structure on 27 Kgm and in view of the interest in the lessee rights of the land, defendants I to 11 would, on the terms and conditions and in the manner stated in the agreement, be entitled to proportionate space. The plaintiff, who was already in physical possession from 22-3-71 of a portion of this property, commenced the preparatory work for a multi-storeyed building. Defendants, however, began to put obstacles. In spite of repeated requests, they failed to perform their part of the contract where- by it became necessary for the plaintiff to file this suit. It is then alleged that plaintiff has always been ready and willing to perform its part of the contract. They are willing to construct and promote the multi-storeyed building as envisaged in the agreement. The plaintiff's title as lawful lessee of 27 Kgm is also alleged to be denied by the defendants, necessitating a declaration that the plaintiff is the lawful tenant of the property and in possession thereof.
(2) Defendants 12 to 30 are alleged to claim interest in the property in suit. The plaintiff's case firstly in this respect is that they have no claim and, secondly, whatever be their claim, it has no effect on the rights of the plaintiff. They were, thereforee, imp leaded as necessary or in any case proper parties to the suit. Defendant 31 is alleged to have been appointed by the Court as an Administrator in some probable proceedings and has, thereforee, been imp leaded as such.
(3) The plaintiff, thereforee, prayed a decree for specific performance of the agreement agains: the defendants and that defendants 1 to 11 be ordered to specifically perform all the terms of the agreement. The plaintiff further prayed that a decree for declaration declaring the plaintiff as lawful tenant of 27 Kgm be also passed Along with costs of the suit.
(4) Some of the defendants filed written statements. Defendants 1 to 4 filed one written statement. Defendants 5, 7 and 8 filed second written statement. Defendants 6. 12 and 13 filed third written statement. Rest of the defendants remained exparte I. A. 4658182 was moved under Order 22 Rule 4 read with Section 151 of the Code of Civil Procedure (Code for short) for bringing on record the legal representatives of deceased defendant 28. No objections were filed against that application and, thereforee, it was allowed vide order dated 6-9-83. is 4656/83 was moved under Order 32 Rule 3 read with Section 151 of the Code for appointment of guardian adulate of defendant 3 who was stated to be. of unsound mind. Vide order dated 14-12-83 Dr. Anand Nath was appointed as such. Plaintiff then moved is 1843188 under Order 1 Rule 10 read with Section 151 of the Code for impleading M/s Mahajan Woolen (Pvt.) Ltd. (hereinafter described as Mahajans) as a party in the suit alleging that the suit property had been sold to them during the pendency of the suit. This application was allowed vide order dated 23-5-1988. Plaintiff also moved is 2405188 under Order 39 Rules 1 and 2 read with Section 151 of the Code to restrain defendants 22, 23, 29 and Mahajans from assigning, transferring or encumbering in any manner, the ownership and possessory rights in 27 Kgm or parting with possess sion of any of its portion to any one else except the plaintiff. Vide older dated 21-11-88, this Court allowed this application also. Mahajans were imp leaded as defendant 32. Thereafter, the plaintiff filed an amended plaint impleading Mahajans. The allegations against Mahajans is that by sale deed dated 30-10-87 they have purchased the suit property from Dr. Anand Nath and defendants 2 to 8, 12 and 13 with full knowledge of the agreement dated 6-7-77 in favor of the plaintiff and also the pendency of the suit. Mahajans are alleged to be not a transfree for value or paid the money in good faith. The transfer in their favor is stated to be in violation of Sections 40 and 52 of the Transfer of Property Act, thereforee, the decree of specific performance and declaration is sought against defendant 32 also.
(5) Now coming to the written statements. Defendants I to initially gave certain facts which are alleged to have been suppressed by the plaintiff. These are that on or about 18-9-72, plaintiff had filed Suit No. 405:72 against present defendants 1 to 7, 8, 12 and 13 wherein it alleged that late Dr. Raghunath, father of the answering defendants and plaintiff had entered into an agreement on 18-3-71 for construction of a multistoreyed building a cinema on the suit property. Some terms of the aforesaid agreement are then detailed in para B of the written statement. Further on 22-3-71 documents purporting to be a partnership agreement, a power of attorney and another document purporting to be a lease deed were executed in terms of the earlier agreement dated 18-3-71. But all those documents were signer and registered simultaneously. Dr. Raghunath was alleged in that suit to have committed breach of the aforesaid agreement and thus liable to pay Rs. 10 lacs to the plaintiff. The plaintiff also claimed a charge amounting to mortgage on the suit property for recovery of Rs. 10 lacs because Rs. 4,50,000.00 were advanced under the collaboration agreement, the partnership agreement and the lease deed dated 22-3-71 for carrying. out projects on the aforesaid property. The plaintiff also made a prayer in that suit for a decree of Rs. 10 lacs with costs and future interest at the rate of 12 per cent per annum and for dissolution of the said partnership deed. The plaintiff is also alleged to have filed an application under Order 39 Rules I and 2 for ad interim injunction restraining defendants I and 2 (now defendants 1 and 4 in this suit) from transferring or in any. way alienating the property which prayer was allowed wide order dated 22-10-72 and confirmed on 2-12-74. Defendants denied the allegations in that suit and the court framed issues as detailed in para H of the written statement. The present agreement i.e. the one dated 6-7-1977 is alleged to have come into existence during the pendency of that .suit. It is alleged that defendants 1 and 4 had no authority in law or any permission from any court to sign that agreement on behalf of defendant 3 under the Lunacy Act or defendant 6 who was a minor. Defendant 9 is alleged to have signed the agreement on the condition that he would produce relinquishment deeds from other LRs of late R. L. Jaggi which he never produced and has since expired. Defendant 9 is alleged to have written a letter dated 16-10-77 to the plaintiff demanding payment in terms of the agreement which was refused by the plaintiff vide their reply dated 2-12-77. Plaintiff is also alleged not to have withdrawn Suit No. 405172 as contemplated under the agreement dated 6-10-77 and continued to proceed with it as if the agreement did not exist. As a matter of fact, the plaintiff abandoned the agreement in question. Defendants did not appear in that suit on 25-10-77 under the belief that plaintiff would withdraw it But instead of withdrawing, the plaintiff led ex parte evidence. The matter was then adjourned for ex parte arguments. But, in the meantime, it is alleged, there were fresh talks for compromise. which continued for a long lime. But no compromise could be arrived at. On 15-5-87, the plaintiff made a statement in that case that defendants had entered into an agreement with it on 6-7-77 relating to the suit property and the claim in that suit was, thereforee, adjusted with the defendants as per the said fresh agreement. thereforee, the suit was dismissed as withdrawn. The defendants 1 and 4 in the present suit did not agree that the claim in suit had been adjusted. They further said that the agreement in the present suit was void and, thereforee, they prayed for rejection of the plaintiff. The suit, however, was dismissed as withdrawn. It was, however, observed that the question whether the claim subject matter of the suit had been adjusted as per the agreement dated 6-7-77 or whether the said agreement was valid or not did not arise for decision in that suit.
(6) Thereafter defendants raised certain preliminary objections. These are that the agreement in Question is incomplete and irconclusive, specially clause X. It was so held by this Court in the previous suit on 17-4-79. Thus that decision was binding on the plaintiff. The agreement was also contingent because it provided that defendants 1 and 4 shall obtain per- mission from courts to act on behalf of defendants 3 and 6 respectively. It also directed defendant 9 to produce relinquishment deed from other heirs of late R. L. Jaggi. No such relinquishment deeds were obtained by defendant 9 and after his death, the agreement fell to the ground. Another objection is that the. agreement being for construction of building, compensation in money was adequate relief for non-performance. It also ran into minute and numerous details and was dependent on the personal qualification and volition of the parties and was thus determinable. Agreement could not be enforced in view of Clauses (a), (b), (c) and (d) of Sub-section 1 of Section 14 of the Specific Relief Act. The agreement is also alleged to be void on account of many reasons which are incorporated in different issues and, thereforee, need not be given in detail here. It is also stated to be without consideration. Claim by plaintiff is alleged to be mutually contradictory because the alleged tenancy and agreement cannot coexist. The agreement is also alleged to be not binding on defendant 3 who is lunatic. Sushil Ansal who has instituted this suit on behalf of the plaintiff is also alleged to be nut duly authorised to do so on behalf of the plaintiff. The plaintiff is also alleged to be not in possession of any portion of the property or in the alternative, of the entire property. The suit is then alleged to be barred by limitation and under Order 2 Rule 2. and Order 23 Rule 1(4) of the Code.
(7) On merits it was admitted that they along with defendants 5 to 8, 12 and 13 had sold and transferred their rights, title and interest in the suit property to Mahajans. Allegations in paras 1 to 6 of the plaint were otherwise denied. The alleged lease deed, being part and parcel of the same transaction of 1971, did not give any right to the plaintiff to enjoy the property. It was executed only, to enable the plaintiff to get the premises vacated from the tenant. Delivery of possession as alleged in the plaint was denied. Validity of the impugned agreement was denied because defendants 1 and 4 did not have any authority to sign on behalf of defendants 3 and 6 who were insane and minor respectively. They also denied if they failed to perform their part of the contract. The plaintiff was alleged never to have performed or intended to perform any part of the agreement. The agreement was alleged to be otherwise incomplete. as could be seen from clause X, and as interpreted in order dated 17-4-79 in Suit No. 405/72. The agreement was alleged to be contingent and being for construction of building, compensation in money would be adequate relief. Thus they prayed that the suit was liable to be dismissed with costs.
(8) Second written statement is by defendants 5, 7 and 8. Their main plea is that they did not give any general power of attorney to the persons mentioned in the agreement dated 6-7-1977. thereforee, they being not signatories to the agreement were not bound by any such agreement. In fact, they along with other co-owners have sold and transferred their rights, title and interest as well as possession in the suit property to Mahajans vide sale deed dated 30-10-87 for a total consideration of Rs. 1 crore. It is their fustier case that the so called agreement in dispute is a contract for construction of a multi-storeyed building which cannot be specifically performed because the courts cannot supervise such contracts. The execution/ performance of the contract is impossible because neither the building works are defined in the contract nor the plans have beep sanctioned, Vacant possession of the premises was to be given to the plaintiff within three months as per the agreement. But the same was not delivered and the defendants were no longer in possession of the property.
(9) Moreover, the agreement in question is stated to be incomplete, inchoate and so the court should decline to grant specific performance of building contract involving continuous duty. It is also stated to be indefinite and imprecise, contingent and 'impossible of performance. The plaintiff is also alleged to have continued to prosecute suit No. 405/72 till 15-5-87 which would show that the plaintiff company was not ready and willing to perform its part. It is also stated to be opposed to public policy and unconscionable.
(10) On merits these defendants stated that after the withdrawal of the suit by the plaintiff on 15-5-87, no cause of action subsisted in its favor against any of the defendants in respect of the agreement between the plaintiff and late Dr. Kaghunath. The possession of the plaintiff even on a portion of the suit property was denied and it was alleged that Mahajans were in actual physical possession of the entire property. Plaintiff could not even otherwise start construction over the suit property because it never submitted its plans and it was not entered into with all the owners of the property. Plaintiff's right as tenant was also denied because the alleged collaboration agreement of tenancy was part of a single arrangement Along with the alleged agreement which is not enforceable. The plaintiff is also alleged not to have paid any rent after the so called agreement of lease. The alleged agreement could only be interpreted in the nature of a license granted by late Raghunath with a view to construct building.
(11) Mahajans in their written statement also raised almost similar type of objections. They said that the alleged agreement being for construction of a multistoreyed building coupled with the agreement to sell after construction of the building was barred by clause (c) of sub-section (3) of Section 14 of the Specific Relief Act. There was also no description of the building or other work in the alleged contrast sufficiently precise to enable the determination of the nature of the building or work and the court had nothing before it to supervise the nature of construction or the work. It is also alleged to be a contingent agreement because it depended upon certain conditions such as the family settlement of all cases mentioned in Schedule A, other cases having direct or indirect bearing on the suit property and the building standing thereon and also the registration of the family settlement. It is also stated to be no actually an agreement but an agreement to enter into a further agreement as held by this Court on 17-4-1979 in Civil Contempt Petition (CCP) in Suit No. 405/72. The agreement was also not capable of specific enforcement unless the tenants occupying the property could be evicted. The tenants could not be evicted in the suit because the jurisdiction of civil court was barred under Section 50 of Delhi Rent Control Act. The agreement in question was also alleged to he void for various reasons like that defendant No. 3 was a lunatic and no permission was obtained by Dr. Anand Math from a competent court to execute the agreement on her behalf, or defendant No. 6 being a minor, any agreement on behalf of the minor was also void under Section 11 of the Contract Act and so on. Plaintiff is also alleged to have abandoned its claim against defendants 12 and 13, and the contract/agreement being un-sever able could not be enforced against defendants 1 to 6 alone. It is also stated that the plaintiff was not ready and willing to perform its part of the contract and that is why it did not submit building plans for the construction of the multi-storeyed building. Mahajans are alleged to have bought the suit property for Rs. 1 crore from the ten recorded owners and, thereforee, the have stepped into the shoes of all the co-owners and this court could not direct Mahajans to hand over possession obtained by them from defendants 3.6,7,8,12 and 13 under the sale deed. Sections 40 and 52 of the Transfer of Property Act are alleged to be not applicable.
(12) It was admitted that plaintiff was in possession of one room but only as a license. They also pleaded that they were transfree for value in good faith and so a decree could not be passed against them.
(13) In additional pleas, it is stated that the property had been returned by the Land and Development Officer and Mahajans not only took steps to have the re-entry set aside but also paid a sum of Rs. 1,23,903.38 for setting aside the re-entry. Plaintiff' is also alleged not to have obtained clearance under the Urban Land (Ceiling and Regulation) Act, 1976. They also claimed to have submitted plans which were under the active consideration of Ndmc and Urban Arts Commission. They bad also engaged Architects and Engineers in relation to the sanction of the plan from time to time.
(14) Plaintiff filed replication to all the written statements, refuting the allegations of the defendant and reiterating its own averments. Pleadings of the parties were incorporated in the following issues on 31-8-1989 by Mahinder Narain, J.
1. Whether the plaint has been signed, verified, and suit has been instituted by a duly authorised person?
2.Whether the written statement filed by defendants No. I to 8, 12 and 13 has been signed and verified in accordance with law? If not, to what effect?
3.Whether Rakesh Mahajan is a general attorney of defendants No. 1 to 8, 12 and 13. and, thereforee, competent to sign and verify the written statement?
4.What is the nature of the agreement dated 6-7-1977 executed between the plaintiff and defendants No. I to 11, and whether the same can be specifically enforced?
5Whether defendants No. 1 to S obtained vacant possession of any part of property No. 27, Kasturba Gandhi Marg, New Delhi? If so, to what effect 1
6.Whether the agreement dated 6-7-1977, in so far as it purports to be signed on behalf of defendants No. 3 and 6 is valid and effective in view of the unsoundness of mind of defendant No. 3 and minority of defendant No. 6 on the date of signing of the agreement?
7.Whether defendants No. 1 and 4 have performed their undertaking mentioned in the agreement dated 6-7-1977, to procure authorisations from competent courts? If not, to what effect.
8.What is the effact, if any, of the order dated 5-1-1983, passed by Shri Jagdish Chandra, District Judge, Delhi (as His Lordship then was) vis-a-vis the agreement dated 6-7-1977?
9.In view of the nature of the agreement dated 6-7-1977, can it be specifically enforced, if some and not all the owners of the property have entered into that agreement?
10.Whether the agreement dated 6-7-77 is contrary to the provisions of section 11 of the Hindu Minority and Guardianship Act, as it purports to be signed by the de-facto guardian of defendant No. 6?
11. Whether the agreement dated 6-7-77 has been signed by all the co-owners of the property No. 27, Kasturba Gandhi Marg, New Delhi? Opp
12.Whether defendant No. 11 was authorised to sign the agreement dated 6-7-77 on behalf of defendants No. 7 and 8? If not, are they estopped by their conduct from challenging his authority in signing the agreement on their behalf.
13.What is the effect cf purchase of property bearing No. 27, Kasturba Gandhi Marg, New Delhi, by defendant No. 32 during the pendency of the instant suit?
14.Did defendant No. 32 have knowledge of the agreement dated 6-7-1977?
15.Whether the agreement dated 6-7-1977 is a lease agreement?
16.Whether the specific performance of the agreement is not barred under the provisions of section 14 of the Specific Relief Act?
17.Whether there is no valid and lawful consideration for the agreement dated 6-7-1977?
18.Whether the agreement dated 6-7-1977 is not void on account of its alleged violation with the provisions of sections 23 and 24 of the Contract Act 7
19.Whether the agreement dated 6-7-1977 is not void on account of uncertainties postulated by section 29 of the Contract Act?
20.Whether the agreement dated 6-7-77 does not violate the provisions of section 5 of the Delhi Rent Control Act?
21. Whether the agreement dated 6-7-77 was contingent, incomplete and inchoate?
22.Whether the agreement dated 6-7-77 was contingent, has the contingency occurred, if so, to what effect?
23.Whether the agreement dated 6-7-77 is void for the reason of section 269 Dc of the Income Tax Act, 1961?
24.Whether the agreement dated 6-7-77 was entered into in violation of the order of injunction passed in suit No. 405 of 1972?
25.Whether the agreement dated 22-3-1971 is an agreement or a license '
26.Whether the suit is properly valued for purposes of court-fee?
27.Whether the suit is not time barred?
28.Whether the suit of the plaintiff is haired by virtue of section 34 of the Specific Relief Act. inasmuch as the suit is for declaration without consequential relief of possession?
(15) The plaintiff then moved is 6670189 for framing some additional issues. The court was not inclined to frame any additional issue. However, Mr. Maan, learned counsel for some of the defendants conceded that issue No. 14 as framed may be dieted. thereforee, that issue was deleted. On 25-9-89, learned counsel for the plaintiff by a statement gave up defendants 9 to 11 and 14 to 31. thereforee, their names were removed from the array of the defendants from the date of institution of the suit
(16) Mahajans, defendant No. 32 moved is No. 7643189 under Order 14, Rule 5 of the Code praying for framing of additional issues. This is was allowed and the following additional issues were framed on 6-10-89. 29 (a) Whether the plaintiff has always been ready and willing to perform its part of the agreement? 29(b) Whether the suit is liable to be dismissed in view of the plaintiff having given up its claim against the defendants No. 9 to Ii from the date of institution of the suit?
(17) The plaintiff also moved is 8261189 under Order 6, Rule 17 read with, Section 151 of the Code seeking various amendments in the plaint. But only one amendment to the effect, whether the plaintiff could claim damages in the event of the agreement being found to be not specifically enforceable, was allowed. Rest of the amendments asked for were disallowed vide order dated 23-11-89. On account of I A, No. 9162/89, the following additional issue was also framed on 12-12-89.
30.In the facts and circumstances of the case to what amount of damages, if any, is the plaintiff entitled to as an alternative to specific performance
(18) I have heard arguments advanced by learned counsel for the parties and have carefully perused the evidence and other material on record. I would like to return my findings on various issues in the same sequence as adopted by the plaintiff in their written arguments for the sake of convenience. Issue No. 1
(19)the original plaint in this case is signed and verified by Gopal Ansal while the amended plaint is signed and verified by Sushil Ansal. Ex. Public Witness 1/2 is a copy of the resolution given by the plaintiff company both to Gopal Ansal and Sushil Ansal to do many things including the power and authority to institute, conduct, defend legal proceedings and to sign, verify and present the pleadings and plaint. Under Order 29, Rule 1 Civil Procedure Code , in suits by or against a Corporation, pleadings may be signed and verified on behalf of the Corporation by the Secretary or any Director or other Principal Officer able to depose to the facts of the case. In the case of Hakam Singh V. M/s. Gammon (India) Ltd : 3SCR314 the Supreme Court held that the expression 'Corporation' in Order 29 of the Code will also mean to include a Company registered under the Companies Act. The objection on behalf of the defendants is that the suit plaint having been filed by the Advocate only has not been instituted by a duly authorised person and reliance for this proposition has been placed on the case of M/s. Nibro Limited v. National Insurance Co. Ltd. 1990 (3) DL 11(2). It in held in this case that unless a Director of the Company was authorised to engage an agent or a pleader to file the suit on behalf of the Company, the Director had no authority to institute a suit on behalf of the company. A bare perusal of the resolution Fx. Public Witness 1/2 shows that both Sushil Ansal and Copal Ansal in addition to signing, verifying and instituting plaints were also authorised to retain and employ counsel Advocates, solicitors, Mukhtar and other attorneys to sign Mukbtarnama, Vakalatnama etc. necessary or requisite in connection with the filing of this suit thereforee, it cannot be said in this case that suit is not properly instituted because it is presented only by counsel of the plaintiff. If a counsel was duly engaged by Sushil Ansal or Gopal Ansal to conduct the case, it is obvious that he was also authorised to file the plaint. thereforee, I am of the view that the plaint has been signed, verified and suit has been instituted by a duly authorised person. Issue NO. 2
(20) Under this issue the court is to see whether the written statement filed by defendants 1 to 8, 12 and 13 has been signed and verified in accordance with law and if not, what is the effect. The original written statement purported to be signed by Rakesh Mahajan as their attorney. However, later on three amended written statements were filed. First is by the legal representatives of deceased defendant No. 1 Dr. Anand Nath and defendants 2 to 4. The second is by defendants 5, 7 and 8 while the third is by defendants 6, 1.2 and 13. I am of the view that the question covered by this issue seems to have become absolutely redundant because these defendants have continued to contest the suit till the very end. Evidence was also led in their presence and arguments have also been beard on their behalf. The matter would have been different if such an issue was treated as preliminary and defends its were allowed opportunity to take appropriate steps in case they were found not to have signed or verified pleadings in accordance with law. thereforee, this issue does not call for any determination at this stage, Issue No. 3
(21) The same logic will apply to this issue also as to issue No 2. Issue No. 4
(22) Under this issue we are to see as to what is the nature of the agreement dated 6th July, 1977 executed between the plaintiff and defendants I to Ii and whether this agreement is capable of being specifically enforced. Learned counsel for the plaintiff submitted that the agreement in suit is, in effect, a contract to transfer immovable property and such a contract is specifically enforceable under Section 10 of the Specific Relief Act. It is further urged that it is not necessary' to give a name of label to & contract to transfer immovable property.. The court is actually to decide after a careful consideration of the agreement, the principal object sought to be achieved by it. According to the learned counsel, the principal object of the impugned agreement is transfer of immovable property by one party to the other party, in consideration of transfer of immovable property by the other to the first party. thereforee, in effect, it is an agreement to transfer immovable property byexchange. Only the formal completion of the deeds of exchange is postponed till the building was completed on 27 KGM. The argument goes further that by this agreement the plaintiff's object is to get the existing property transferred to him by its owners i.e. the heirs of late Dr. Raghunath while the object of the heirs is to obtain front the plaintiff built up flats in place of their unproductive and idle plot of land. With these objects, all the parties entered into the aforesaid agreement. The paramount terms of this agreement, it is argued, are contained in clauses 9 and 17 whereby the defendants agreed to transfer the whole of the plot in favor of the plaintiff, by sale deed to be executed after the said multi-storeyed building is constructed and completed, in consideration of the plaintiff agreeing to transfer 35% of the built up space in the multi-storeyed building including basement and the parking area to the defendants after constructing the same in its absolute discretion with its own money. This according to the learned counsel for the plaintiff, was the pith and substance of the agreement. It is further argued that all other clauses of the agreement are merely ancillary to facilitate the parties to achieve the aforesaid end, for instance, Steps to be taken for delivery of possession to the plaintiff, steps to be taken for obtaining necessary permission and sanctions from different authorities etc. Learned counsel for the plaintiff also drew my a tention to the case of Sri Tarkeshwar v. D. D. Dey : 3SCR18 to carve out the principle of ascertaining the real character of a document. In para 23 at page 113, it is held, 'It is well settled that in ascertaining the real character of the document, regard must be had to the substance of the transaction and not merely the words or form in which it is dressed.'
(23) thereforee, learned counsel for the plaintiff submitted that to judge the enforceability of a contract under Section 10 of the Specific Relief Act, it was not at all necessary to enter into an inquiry as to the label or title to be given to the transfer. All that is required under Section 10 is that it must be a contract to transfer immovable property. thereforee, according to the learned counsel in view of clauses 9 and 17 the agreement in dispute was certainly a contract to transfer immovable property and, thereforee specifically enforceable. Learned counsel for the plaintiff also argued that the nature of the transfer which the parties entered into is a contract of Exchange because the defendants were to transfer the ownership of 27 Kgm to the plaintiff and in return the plaintiff was to transfer the ownership of 35 per cent of the built up area of the multi-storeyed building to the defendants. Each transfer by both the parties, according to the learned counsel, constituted a consideration for the transfer of ownership. thereforee, the subsequent transfer of the respective ownership by the plaintiff of the 35% built up space and by the defendants of the ownership rights in 27 Kgm were squarely covered by the definition of Exchange as contained in Section 118 of the Transfer of Property Act. It says,
WHERE two persons mutually transfer the ownership of one thing for ownership of another, neither thing or both things being money only, the transaction is called an 'Exchange'.'
(24) In this respect, learned counsel for the plaintiff drew my attention to two cases decided by Hon'ble the Supreme Court. The first case is C. I. T. v. Madras General Stores : 66ITR692(SC). The operative part of the impugned document in that case was, 'Now this deed witnesseth as follows:
(I)In pursuance of the said agreement and in consideration of the transfer by the party of the second part, of the property ............ in Schedule Ii, to the party of the first part, the party of the first part hereby grants and transfer to the party of the second part, all the property more fully described in Schedule I .......... to the party of the second part ......... .absolutely for ever.
(II)In further pursuance of the said agreement and in consideration of the transfer by the party of the second part, of the property in Schedule I hereto, to the first part of the property, to the party of the second part, the party of the second part hereby agrees and transfers to the party of the first part, all the shares more fully described in Schedule Ii to the party of second part absolutely for ever'. Their Lordships held, IT is dear from the operative part of the document that there was an exchange of the properties ........ In essence the transaction is one of exchange. There was no sale of the properties described in Schedule I for any money consideration. In other words, there was no price paid or promised.'
(25) The second case is that of Ram Kisto Mandal and another v. Dhan Kisto Mandal : 1SCR342. It held,
under section 118, Transfer of Property Act, atransaction is exchange when two persons mutually transfer the ownership of one thing for the ownership of another provided it is not an exchange of money only. A transfer of property in completion of an exchange can be made only in the manner provided for the transter Of such property by sale. It is not, thereforee, right to say that an exchange does not involve a transfer of property.'
(26) On behalf of the defendants, it is argued (i) the transaction cannot be called either a sals under Section 54 of the Transter of Property Act because there must be price to be pud by the purchaser to the seller and that price means money only. The transfer in the impugned contract is not an exchange because there must be transfer of property by one party to another in consideration of the transfer of property by the second party to the first party. There cannot be a transfer of property which is not in existence on the date of the agreement to transfer. Since the multi-storeyed building, 35 per cent of which is undertaken to be transferred by the plaintiff to the defendants, was not in existence on 6-7-1977, there could be no transfer of such non-existing property and, thereforee, it did not fall within the purview of 'exchange'. (3) Section 118, Transfer of Property Act contemplates a transfer of ownership, but on 6-7-1971, the plaintiff was not owner of any property or part thereof which it could exchange. thereforee, the agreement in question cannot be deemed to effect any exchange. Moreover no such plea was raised in the plaint and in view of Order 6, Rule 2 Cpu, the plea of exchange being a mixed question of law and fact, should not be allowed to set up on behalf of the plaintiff at this stage. (4) Any construction made by the plaintiff on the defendants land will be an accretion to the land and the plaintiff thus could never become the owner of such property. As goon as any building is constructed over 27 Kgm, the defendants will become the owner by accretion. (5) agreement in suit is a building contract. The covenant of construction of a multi- storeyed building is a condition precedent to the execution of sale deed by defendants I to 8 in favor of the prospective flat buyers to be dominated by the plaintiff. Thus the execution of the sale deeds in pursuance of this agreement being dependent upon the construction of a multi-storeyed building on the suit premises, the contract is not enforceable because the plaintiff will neither acquire ownership in the land of 27 Kgm or the superstructure without execution and registration of formal sale deeds.
(27) So far as the first argument goes, it may be noted that it is nobody's case that price or money was to be paid either by the plaintiff to the defendants or vice-versa as consideration for mutual transfer of ownership. thereforee, the argument that the transaction cannot be called a sale seems to be irrelevant. Moreover, according to the case of the plaintiff. It is only a contract for the transfer of immovable property by both the parties in future by way of exchange when the multi- storeyed building has come into existence. thereforee, the concept of sale by means of the present document is not at all attracted. Regarding the second argument, it may be noted that the present document by no stretch of imagination can be interpreted to mean a deed of conveyance between the parties. It is only a contract to transfer immovable property. It is not even the case of the plaintiff that the deed in question is one of exchange or of sale. Plaintiff's case is that it is only a contract removable property. The main question, thereforee, given in the present suit after determination of the nature of the contract would be whether such a contract can be specifically enforced or not. To support this conclusion, learned counsel for the plaintiff relies on the cases of Jugal Kishore Saraf v. Raw Cotton Co. Ltd. Air .1955 Sc 376 and 12 MIA 275(E). (6) In fact these authorities are relied upon by both the parties. Supreme Court says in para 53 at page 398:
SECTION 5, Transfer of Property Act defines a 'transfer of property' as an act by which the transfer conveys property in present or in future to the transferee or transferees. A transfer of a decree by assignment in writing may be effected by conveying the decree in present or in future to the transferee. But even for the transfer to operate in future the decree which is the subject-matter of the transfer must be in existence at the date of the transfer.'
Immediately after defining transfer, it is observed:
THE'words in present or in future' qualify the word 'conveys and not the word 'property' in the Section and it has been held that a transfer of property that is not in existence operates as a contract to be performed in the future which may be specifically enforced as soon as the property comes into existence.'
The Privy Council observed in 12 Moo Ind App 275:
BUThow can there be any transfer, actual or constructive, upon a contract under which the vendor sells that of which he has not possession, and to which he may never establish a title? The bill of sale in such a case can only be evidence of a contract to be performed 'in future', and upon the happening of a contingency, of which the purchaser may claim a specific performance, if he comes into Court shewing that he has himself done all that he was bound to do.'
On the basis of the above authorities, it is not possible to say that the agreement in question is invalid or not specifically enforceable because actually it contemplates exchange between the parties in future when the multi-storeyed building has come into existence, and this principle is clearly reconized in the above authorities. The agreement, thereforee, being in the notice of a contract to specifically enforce against the property afaish is to come into existence in future is quite valid. In the case of Collyer v. Issacs 1881 82 Ch. D. 342, their Lordships held, 'A man can contract to assign property which is to come into existence in the future, and when it has come into existence, equity, 'treating as done that which ought to be done, fastens upon that property, and the contract to assign thus becomes a complete assignment.' The argument, thereforee, on behalf of the defendants that the suit for specific performance would lie only after, the construction is complete, is not tenable because in that situation neither possession will be given to the plaintiff nor construction would be raised. Such an interpretation of the nature of the agreement is absolutly irrational. On behalf of the defendants, reliance was placed on the case of Chief Controlling Revenue Authority v. Sudarsanam Picture : AIR1968Mad319. In that case it was held that, 'while a transfer of property may take place not only in the present but also in the future, the property must be in existence at the time of transfer, for an instrument to be a deed of transfer.' Obviously the present case being for the specific enforcement of a contract to transfer immovable property, the aforesaid observations are not applicable in this case. In fact, the later observations in para 5 of the judgment are helpful to the case of the plaintiff. It is held. 'A purported transfer of property, not in existence at the time of the contact, can only operate as a contract to be performed in future.' Similarly in the case of Miran Baksh and others v. Emperor Air 1945 Lah 69(9), the Special Bench observed, 'A transfer of property that is not in existence operates as a contract to be performed in future which may be specifically enforced as soon as the property comes into existence, but it does not operate as a transfer.' To visualize the situation clearly in the present case, the position is that at the time of the contract the heirs of late Dr. Raghunath were the owners of 27 KGM. They and 3 others agreed to hand overpossession to the plaintiff within 3 months so that the plaintiff will raise a multi-storeyed building over it by demolishing the old structure. The plaintiff was desired to raise that building in Its absolute discretion with its own funds without any interference from the opposite party. This task was agreed to be achieved in three years. So after the expiry of those three years when the building has come into existence, the heirs of late Dr. Raghunath will be the owners of the plot of 27 Kgm while the plaintiff will be owner of the super- structure upon the same plot. It is at that point of time that a deed of transfer by exchange is contemplated. At that time the properties belonging to both the parties will be in existence. So clearly the exchange of each other's property Will then be simultaneous.
(28) So far as the third contention on behalf of the defendants is concerned, it also seems to be misconceived because it again does not take into consideration the distinction between the transfer by exchange and a contract to transfer by exchange. Such a plea is also not barred by Order 6 Rule 2 Civil Procedure Code , because it is the question of interpretation of the nature of contract between the parties and that contract is the only bone of dispute between them. The court is certaioly within its province to interpret a document which is the main basis of the suit. Learned counsel for the defendants drew my attention to the case of Dip Narain Singh v. Nageshar Prashad and others : AIR1930All1 (Full Bench) (10). It may be noted that this authority in fact lays down a clear distinction between a contract which still remains to be performed and the specific performance of which may be sought, and a conveyance by which title to property has actually passed. It held, 'Cases of mere contract are governed by the provisions of the Contract Act. Cases of transfer of immovable property are governed by Transfet of property Act. A mere contract to mortgage or sell would not amount to an actual transfer of any interest in the immovable property, but adeed of sale or mortgage, it duly registered, would, operate as a conveyance of such interest. Once a documrnt transfering immovable property has been registered, transaction passes out of the domain of a mere contract into one of a conveyance. Such completed transaction is governed by the provisions of Transfer of Property Act and so much of the Coatract Act as are applicable thereto.' This authority is of no help to the defendants. Regarding the 4th contention, the question of accretion in this case will not arise. It is only under the contract between the parties that the plaintiff is to raise a multistoreyed building entirely with its own funds arid in its absolute discretion without any interference or interruption by the defendants. thereforee, the superstructure to be raised, by the plaintiff having to come into existence in accordance with one of the terms of the contract and with all the investment of the plaintiff will belong to the plaintiff. On the completion of such superstructure only the respective deeds of exchange will be completed by both the parties. Id the background of this contract between the parties to deliver possession of 27 Kgm to the plaintiff, where upon the plaintiff will raise multistoreyed structure, no law has been brought to my notice to show that in such circumstances the multi-storeyed building will belong to the defendants by accretion.
(29) Regarding the 5th contention, it is to be seen whether the alleged contract between the parties is in the nature of a building contract as understood by the defendants and put forward by their learned counsel. It may be acted that it is not a case wherein the defendant had employed the plaintiff to construct a building for them or where the defendants were to provide plans and designs of their own choice or that the entire investment was to be made by the defendants and the plaintiff was permitted to enter the land on remuneration basis for the services to be rendered by him to the defendants. It is also not a case wherein the plaintiff is bound to follow every instruction of the defendants retarding construction, specifications, inaterial etc. There is no such provision in the agreement. On this contrary it is provided in clause 13.. . .. .'On no ground, whatsoever, shall the construction of the multi-storeyed building on the said plot of land be interfered with or stopped at the behest of any of the parties at Seriall No. 1 to 11.. .. During the construction or after construction of the multi-storeyed building or at any time, in connection with the said building parties No. 1 to Ii or any of them shall not be responsible or liable for paying any amount or amounts either to party 12 (plaintiff) or any person or persons. ...... ' Learned counsel for the defendants drew my attention to the case .of United States of America V. Master Builders reported in 1991 (1) DL 206(11). On the basis of this authority Mr. Maan learned counsel for some of the defendants contended that the principle laid down in this judgment squarely governed the present case and, thereforee, the plaintiff cannot seek relief of being authorised to raise the multi-storeyed building on the property belonging to the defendants. To appreciate this argument, it is desirable to understand the farts of that case. Plaintiff in that case i.e. United States of America (USA for short) had filed a suit for permanent injunction restraining the defendants from obstructing the entry of the plaintiff in property 16, Amrita Shergil Marg, New Delhi and also for restraining the defendants from entering upon the same. During the pendency of the aforesaid suit, plaintiff filed an interim application under Order 39 Rules I and 2 read with Section 151 Civil Procedure Code for an ad interim relief. There were two defendants, namely.. a partnership firm engaged in the business of Engineering and building contracts and its Managing partner. Prior to the filing of this suit, the defendants had filed a suit against Usa and their contracting officer for recovery of Rs. 1.18. crores for the work done on the aforesaid property. The agreement between the parties came into existence when Usa invited tenders for construction of senior officers' residences on two plots in respect of which it had lease hold rights. Defendants' tender was ' accepted. The cost of project on each of the plots was Rs. 40,31,654, which according to the defendants stood increased to higher amounts for both. the plots due to some changes alleged to be made by USA. In pursuance of the aforesaid contract, the defendants carried on work which were to be completed by 7-12-1980 on plot No. 14 and by 15-2-1981 on plot No. 16. On October 15, 1979, Usa authorised the defendants to undertake construction of the works. After demolition of the existing structure, new construction started. Possession of the building constructed on plot No. 14 was given by defendants on 12-1-83 after obtaining occupancy certificate. The defendants claimed to have completed the construction on plot No. 16' on 31-3-1983 while its occupancy certificate had already been obtained on 12-1-83. The defendants did not deliver possession and continued to hold on the same in respect of the second building. There were disputes between the parties. The plaintiff complained that the construction on both the plots was shody and incomplete and that there were over payments to the defendants and that in spite of the aforesaid factors the defendants were refusing to remove themselves from the property. That led to reference of the disputes by the defendants under the Contract Disputes 'Act, 1978, a law of the Usa wherein the Contracting Officer held that a sum of Rs. 39,60,960163 was due from the defendants to USA. While filing the suit for recovery of money against Usa, the defendants also moved an interlocutory application seeking restraint on Usa from entering upon the property. The defendants claimed lien for keeping possession of the property belonging to Usa upon the contention that unless their debt was discharged by Usa, they were entitled to hold on to the property. It was in the background of the aforesaid facts that the learned Judge came to the following conclusions, '(i) No lien exists in favor of the building contractor and he cannot retain possession of the property or remain at site on such a claim, unless the contract between the parties so provides, (ii) license granted to the building contractor by the owner to enter upon the site for the purpose of making construction is revocable. If contract is terminated wrongfully and on that account license revoked, the contractor has remedy to claim damages.'
(30) We are now to see whether there is any parallel between the aforesaid case and the one before this Court, lam of the definite view that there can be actuary no comparison between these two cases. The aforesaid case was a contract between two parties there under the defendants were to raise certain construction over two plots of land belonging to Usa on a license of entry having been granted on certain remuneration and the construction was to be in accordance with the designs, specifications etc. prescribed by USA. It was not a contract wherein complete discretion was allowed to one of the parties to raise the construction of the multi-storeyed building in any manner whatsoever in its absolute discretion. It was also not a contract wherein after construction the property was to be shared by both the parties. It was also agreed in para 14 of the impugned agreement that the license allowing the plaintiff to make a huge investment for construction of a multi-storeyed building by entering upon the property, will irrevocable and shall not be revoked on any ground .whatsoever. In para 6, it 'was further provided that during or after construction of the building or at any time in connection with the said building, parties No. 1 to 11 (most of whom are the defendants now) or any of them shall not be responsible or liable for paying any amount or amounts either to the plaintiff or any person or persons, party or parties and in that respect also the plaintiff agreed to indemnify them until they got clear possession of their respective shares in the completed commercial multistoreyed building.
(31) The aforesaid clause in the agreement, thereforee, completely negatives the concept of a building contract invoked on behalf of the defendants.
(32) Learned counsel for the defendants, relied upon some more authorities. 'The case of The State of Madras v. M/s. Gannon Dunkerley & Co : 1SCR379 was cited for the proposition that in case of a sale the consideration must be price in the form of money. To support the above, learned counsel for the defendants also drew my attention to the cases of Mahima Byasadeba Gadi and others v. Dinabandhu Mohanty and others : AIR1960Ori16 Kama Sahu and. another v. Krishna Sahu : AIR1954Ori105 , Ram Sunder Saha and others v. Kali Narain Sen Choudhury and others : AIR1927Cal889 , Madam Pillai v. Badrakali Ammal and another Air 1922 Mad 311(16) and Talib Ali v. Kaniz Fatima Begam and another Air 1927 Oud 204(17). However, it may be noted that the present agreement between the parties is not an outright sale within the meaning of Section 54 Tp Act. The stager executing the transfer deeds will come only later on. The present case is only for enforcement. of a contract between the parties under which the defendants Will part with possession of the suit property to the plaintiff. Thereafter, the plaintiff will raise multi-storeyed building and the plaintiff will then transfer ownership of 35% built up areas to the defendants or any of them whosoever may be found entitled now in this judgment.
(33) In short the nature of a contract between the parties can be ascertained truly from the document itself. As already stated the main object of the contract between the parties was that the defendants will transfer irrevocably the suit property to the plaintiff who then by its own investment construct a multi-storeyed building upon it .in its absolute discretion with its own money without any interference whatsoever from the defendants. After the multi-storeyed building comes into existence, the ownership in 27 Kgm had been agreed to be transferred by the defendants to the plaintiff in consideration of a specific share i.e. 35% of the built up areas to be allotted to the defendants. On behalf of some of the defendants Mr. Pardeep Aggarwal, learned ceunsel contended that there was a new proposal for re-development of the suit property as admilted by PW1 Sushil Ansal, Chairman and Managing Director of the plaintiff company and, therefores, the principle object of the agreement between the parties was the construction of a multistoreyed building. I do not understand how this contention will come to the aid of the defendants in changing the interpretation regarding the nature of agreement between the parties. The nature remains the same i.e. the core of the agreemen't is for construction of the multi-storeyed building at the cost of the plaintiff in its absolute discretion which is later on to be shared by the parties i.e. 65% to go to the plaintiff and 35% to the defendants, A bare perusal of the agreement Ex. Public Witness 1/1 will go to show how much involved and anxious the owners of the property were when they entered into this agreement with the plaintiff. Clause Iv gives that background in detail. According to this clause late Dr. Raghunath daring his lifetime made several attempts to construct a cinema and for a multi-storeyed building on this plot and with that object he entered into various agreements in the past also with many persons. They were V.K. Mundra of Calcutta, Ram Kumar Murarka & Sons of-Bombay, the plaintiff itself earlier when it functioned under the name and style of M/s Ansal and Sehgal Propetries P. Ltd., Brig. M. L.Wig and M/s Indu Peoples Theatre Co. Suit No. 40511972 was_already pending agints the owners for recover of Rs 10 lacs. M/s Ram Kumar Muraker &sons; P.Ltd had also made a claim for repayment of the loan of Rs. 70,0001- advanced by them to late Dr. Raghunath. Brig. M. L. Wig and his associates had filed another suit for recovery of Rs. 65,0001- including interest advanced by them. The Theatre Co. was also claiming certain rights and interest by virtue of another registered agreement with late Dr. Raghunath. Not only the above warned persons in Clause Ix were in possession of various portions of the suit property either as tenant or un-authorisedly who had to be evacuated from this property so that vacant possession of the same could be handed over to the plaintiff. The plaintiff itself was in possession of certain rooms and- near lawns in the building as per registered lease deed dated 22-3-71 Ex. D15. The Co-owners inter se had also instituted legal cases amongst themselves in different courts as stated in clause X which they agreed to settle by themselves in accordance with a family arrangement. thereforee, the contract in question was entered into by the owners in order to extricate themselves from all the aforesaid legal cob-webs. That is why according to Clause Xih, they agreed to transfer and assign to the plaintiff all such rights in the suit property which would give un-restricted and absolute right to it to take possession for consideration and that consideration was the allotment to the opposite party of 35% share of the constructed multi-storeyed building by. the plaintiff at its own costs. Tej Nath, defendant No. 4 at that time, also produced the general power of attorney given to him by his brother defendant No. 5 and also undertaking in due course to procure an order of the Competent court authorising him to act as the lawful guardian of Tarun Kumar, minor defendant No. 6 and Dr. Anand Nath, defendant No. I also undertook to produce the order of Competent court authorising him to lawfully act on behalf of Dr. Pushpa Nath, defendant No. 3 who was alleged to have a feeble mind. In fact, the co-owneers of the suit property and initially defendants 9 to Ii who were connected with M/s. Indu Peoples Theatre Co. had Jointly approached the plaintiff with the proposal to construct the multistoreyed commercial building. thereforee, it will be seen that whereas the main object of the contract between the parties was the construction of the multi-storeyed building in order to share it in a certain proportion, it is not possible to say that it was a building contract as understood in the case of Usa (supra). To achieve that object the co-owners also agreed to deliver vacant and irrevocable posession (Clause 1). The ancillariy obligations like the authorisation to be obtained from the court, permissions and sanctions, settlement of disputes and obtaining of vacant possession from the tenants, legal cases inter se amongst owner etc. are contained in various other clauses of the contract. Those ancillary obligations by no stretch of imagination can be deemed to be the main object of the contract because they were undertaken simply to achieve the main objects. thereforee, my conclusion is that the nature of agreement between the parties is that it is a contract for transfer of the ownership of immovable property by co-owners tothe plaintiff (clause 9) and transfer of 35% of the multi-storeyed building to the defendants, to be constructed by the plaintiff simultaneously, each forming consideration for the other which is precisely meant by exchange. Issue is accordingly decided. Issue NO. 13
(34) The court is concerned in this issue with seeing the effect of purchase of property in dispute from the owners by defendant No. 32 daring the pendency of this suit. This suit for specific perfermance of the contract was filed by the plaintiff on 6-10-80. Mahajans (defefendant No. 32) have admittedly purchased this property.The sale deed dated 30-10-87 from the owners, copy of which is Ex. P15. It is alleged in the amended plaint that Mahajans have purchased this property with full knowledge of the agreemwnt between the plaintiff and the other concerned defendants. Mahajans are also alleged as transferee without value or to have not paid the consideration in good faith. thereforee the aforesaid transaction of sale in favor of Mahajans is in violation of Sections 40 and 52 of the Transfer of Property Act. In their written statement, Mahajans in para Vi (xviii) 'at page 833 say that they have parchased this property for a consideration of Rs. 1 crore by a duly executed sale deed from the ten recorded owners and thus they had stepped into the shoes of all the co-owners, and possibly this court cannot direct them to hand over the possession obtained by them from defendants 3, 6, 7, 8, 12 and 13 under the sale deed. It is further alleged that the agreement in question is neither enforceable nor severable and is impossible of performance and thus stands frustrated. In evidence Rakesh Mahajan as DW-1 first denied knowledge of the pendency of the suit at page 1143. However, his attention was drawn to clause 2(a) in agreement Ex P19 dated 24-9-86 between them and co-owners. This clause mentions the manner in which the consideation of Rs. 1 crore receivable by the owners was to be discharged/settled/paid. It describes the claims arising out of the suit filed by the plaintiff i.e. the ptesent suit as well as earlier suit No. 405/1972. It was only after seeing this clause in their own agreement that no option was left with Rakesh Mahajan except to say that it was correct that when the aforesaid agreement was executed in September, 1986, defendant 32 was aware of the pendency of the suit. Defendant No. 32 has admitted this fact even in the amended written statement. thereforee, from the pleadings and evidence, oral and documentary, it is clearly established that Mahajans (defendant No. 32) were fully aware of the existence of the suit agreement and the pendency of the present suit. There arc two relevant Sections in the Transfer of Property Act which deal with the effect of such a situation. Relevant portion of Section 40 of the Tp Act says, 'Where a third person is entitled to the benefit of an obligation arising out of contract and annexed to the ownership of immovable property, but not amounting to an interest therein or easement thereon, such right or obligation may be enforced against a transferee with notice thereof or a gratuitous transferee of the property affected thereby, but not against a transferee for consideration and without notice of the right or obligation, nor against such property in his hands.' This section, thereforee, clearly shows that although a contract for transfer of immovable property does not create any interest in a property in favor of the beneficiary of the agreement, it does annex an obligation to the ownership of the property. Such an obligation is capable of being enforced against a subsequent transferee of the property who has notice of the obligation. The evidence and pleadings clearly point out that Mahajans had knowledge not only of the agreement between the plaintiff and co-owners but the pendency of this suit also. In the case of Ram Baran Prosad v. Ram Mohit Hazra and others : 1SCR293 , their Lordships held that an obligation becomes annexed with the ownership of land and the obligation can be enforced against the subsequent transferee who is in notice of the earlier contract. The same principle was reiterated by Hon'ble the Supreme Court in the case of Bai Dosabai v. Methurdas Govinddas and others : 3SCR762. thereforee, under Section 40 of the T. P. Act, the right of the plaintiff extends to obtaining possession from defendant No. 52 to the same extent as it would have been available to him against the co-owners of the property.
(35) Then there is Section 52 of the T. P. Act relevant portion of which provides, 'During the pendency in any court having authority within the limits of India. .... .of any suit or n proceeding which is not collusive and in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under the decree or order which may be made therein, except under the authority of the court and on such terms as it may impose.' thereforee, clearly by the rigour of the aforesaid section the decision of this court in the present suit shall not be binding only on the co-owners of the property but also on defendant No. 32 who has derived title over the suit property through a sale deed during the pendency of the suit. In the case of Gouri Dutt Maharaj v. Sukur Mohammed and others , 'The broad purpose of S. 52 is to maintain the status quo unaffected by the act of any party to the litigation pending its determination. The applicability of the section cannot depend on maters of proof or the strength or weakness of the case on one side or the other in buna fide proceedings. To apply any such. test is to misconceive the object of the enactment.' This principle was reiterated in the case of Kedar Nath Lal and another v. Ganesh Ram and others : 2SCR204 in the following words, 'Doctrine of lis pendens applies irrespective of the strength or weakness of the case on one side or the other.' In the case of Munnilal Shyamle and another v. Bhaiyalal Hazari and others : AIR1962MP34 , the M. P. High Court went to the extent of laying down that the party adversely affected by Section 52 need not be made even a party to the suit. The same principle was reiterated by a Division Bench of our own Court in the case of Gurmauj Saran Baluja V. Mrs. Joyce C. Salim and others : AIR1990Delhi13 wherein it was observed in para 16. 'A transferee pendente lite of the property in suit may not be a necessary party as he would be bound by the decree passed in the suit on account of the doctrine of lis pendens as contained in S. 52 of the T. P. Act. But the. transferee pendente lite can be added as a proper party if his interest mthe subject-matter of the suit is substantial and not just peripheral.'
(36) The matter may be looked at from the angle of Section 91 of the Indian Trusts Act also which provides that where a person acquires property with notice that another person has entered into an existing contract affecting that property, of which specific performance could be enforced, the former must hold the property for the benefit of the later to the extent necessary to give effect to the contract. Thus a transferee like Mahajans is in the nature of a constructive trustee qua the plaintiff, if specific enforcement can be enforced.
(37) On behalf of Mahajans it has been contended that even if the submissions made on behalf of the plaintiff are accepted, even then Mahajans can only be directed to transfer the ownership of the suit property to the plaintiff but they shall not be obliged to deliver possession. Reliance is placed in this respect on the case of Durga Prasad and another v. Deep Chand and others : 1SCR360. But such a conclusion is not warranted from' a perusal of the aforesaid judgment. It is held in this case that the property will have to be transferred by the subsequent transferee is favor of the party to whom the Vendor has contracted to sell previously. The transfer of ownership will necessarily carry with it the obligation to transfer possession also. Even Section 19(b) of the Specific Relief Act provides that specific performance of a contract may be enforced against either party thereto or other persons claiming under him by a title arising subsequently to a contract, except a transferee for value who has paid his money in good faith and without notice of the original contract. It is also contended on behalf of Mahajans that under the agreement between parties, defendants 9 to Ii were obliged to get the property vacated from tenants and other occupants and since they did not render any help to Mahajans or the previous owners so .the plaintiff was not entitled to specifically enforce the contract against Mahajans. I am of the view that it has now become immaterial whether Mahajans got possession with or without the aid of defendants 9 to 11 (since given up) or legal representatives of defendant No. 1 and defendants 2 to 8, 12 & 13 because Mahajans had no business to disturb the status quo of the suit property during the pendency of this suit of which they had notice, and if they did so, they exposed themselves to all the consequences flowing from their act. thereforee, upon a consideration of the totality of the pleadings, evidence and submissions, the effect of the purchase of property by Mahajans during the pendency of the suit is that they will be bound by the contract between the plaintiff and co-owners to the same extent to which they were liable. Issue is accordingly decided. Issue NO. 5
(38) Under this issue, I am of the view that much of the controversy between the parties has ipso facto come to an end because admittedly Mahajans are now m possession of the entire premises except that part which is already in physical possession of the plaintiff. thereforee, whether defendants I to 8 first obtained possession and then delivered it to Mahajans or whether Mahajans directly obtained possession from various occupants loses all significance. The simple point to which this controversy now boils down is that Mahajans have admittedly stepped into the shoes of the co-owners. They being transferee pendente lite are bound by the obligations of the co-owners in the same manner and to the same extent. Mahajans specifically admit in para Vi (xviii) at page 833 of the written statement that defendant No. 32 has stepped into the shoes of all the co-owners and its effect will be that in vsw of Sections 52 and 40 T.P. Act and Section 91 of .the Indian Trusts Act, they are liable to the same extent as the co-owners to deliver possession to the plaintiff. It may be noted that during oral evidence, Rakesh Mahajans deposed that one Gargi is still in possession of a part of the premises. This statement is beyond pleadings and issues and may even expose him for being guilty of perjury. The issue is accordingly decided. Issue No. 29(b)
(39) Under this issue we are to see the effect of the plaintiff having given up its claim against defendants 9 to 11 from the date of institution of the suit and whether on this ground the suit is liable to be dismissed. It will be recalled that these defendants, ramely. S. P. Jaggi, Narinder Anand, B. L. N. Sastri were imp leaded as defendants in the suit. They had no proprietary interest in the suit property. In the agreement they were shewn to be associated in M/s. Indu Peoples Theatre Co. which also claimed certain rights and interest by virtue of the registered agreement entered into with late Dr. Raghunath and which interest it was threatening to enforce. S. P.'Jaggi was also one of the tenants in a portion of the suit property.' They also were shown to be ready and willing in clause Xi to forgo their rights under the agreement in their favor for consideration so that the plaintiff may construct a muki-storeyed building for the purpose of sale of flats/spaces therein. That consideration is given in clause 17 to the effect that they will get certain portion of the built up spaces which is included in 35% share of the co-owners. They were to get 33.'.5 sq. ft. on ground floor, 1125 sq. ft. on first floor, 4205 on second floor, 1550 sq. ft. on 4th floor in all. 10250 sq. ft. This benefit was derived by them in consideration of their having transferred all their rights to the plaintiff under the agreement dated 6-1-72 which existed in their favor These defendants also undertook to settle with the tenants in the suit property. But that portion of the agreement has now become infructuous and redudant after the premises has come into the possession of defendant No. 32. thereforee, they became irrelevant to the main agreement between the parties. That was the position qua defendants 9 to Ii when the agreement in dispute came into existence. However, subsequently the execution of the sale deed by the co-owners in favor of Mahajans on 30-10-87, (Ex. Pis at page 127) extinguishes the rights of defendants 9 to Ii also qua Mahajans and, thereforee, qua the plaintiff. In a nut shell, it will be Mahajans now only who will be entitled to 35% share of the constructed multi-storeyed building upon the suit property in case specific performance is ordered. These defendants were given up on 22-9-89 by which time they were left with no interest at all in the suit property. thereforee, their interests are not liable to be affected either way by a decree, if any, which may be passed against the co-owners and Mahajans.
(40) On behalf of the defendants, it is contended that in the absence of defendants 9 to 11 this court cannot direct any other defendants to hand over possession of the suit property to the plaintiff because they had undertaken certain obligations in respect of the contract between the parties and unless they strictly performed their obligations, the suit of the plaintiff is liable to be dismissed. This argument does not seem to have much force for the simple reason that even they have received consideration for giving up their rights in respect of the suit property. Dwi Rakesh Mahajan stated in his examination-inchief that all tenants except Balwant Gargi had vacated their premises and that they purchased the tenancy and possessory rights of all the tenants of Jaggi family vide separate agreements. They made the payments to the tenants by cheques and the relevant documents are collectively Ex. DW1/13. thereforee, I am of the view that the giving up of defendants 9 to Ii by the plaintiff subsequent to the purchase of the suit property by Mahajans has no adverse effect upon the claim of the plaintiff and the suit on this score is not liable to be dismissed. Issue NO. 26
(41) In the present suit the plaintiffs have claimed a decree for specific performance or in the alternative damages, without prejudice, amounting to Rs. 4 crores. The plaint has been valued at Rs. 4 crores and a court fee of Rs. 3,28,1201- has been paid. They have also paid the court fee on the relief of declaration claimed in clause (b). No arguments have been addressed on this issue on behalf of the defendants, thereby conceding that the plaint is properly valued for purposes of court lee. The plaint, thereforee, has been properly valued for purposes of court fee. Issue NO. 27
(42) The agreement between the parties was entered into on 6-7-77. According to clause 2 of the agreement, in order to give irrevocable vacant possession to the plaintiff, all matters and disputes with the tenants and other persons in possession of different portions of the suit property were undertaken to the settled by defendants 9 to Ii within 3 months of the date of the agreement. This would mean that the possession was to be delivered by 6110-1977 to the plaintiff. The present suit was filed on 6-10-80. 5-10-80 was a holiday. The suit is clearly within time because it is filed within 3 years. Issue NO. 28
(43) The objection raised under this issue on behalf of the defendants is that the plaintiff has filed this suit implicate for a declaration. It has not prayed for the consequential relief of possession and, thereforee, the suit is barred by virtue of Section 34 of the Specific Relief Act. I am of the view that this objection is not tenable. The reason is that it is not a suit implicate for the grant of a declaration. This suit combines two reliefs. One is the relief of specific performance of an agreement and the second is the relief of declaration. If the first relief of specific performance is ordered, the defendants will have to deliver possession of the suit property as a consequence of the decree. thereforee, the relief of possession is included in the first prayer of the plaintiff. The prayer for delivery of possession with the second relief of declaration, thereforee, would have been a mere repetition. So, in case, it is not possible to order specific performance then along with the relief of declaration, possession can also be ordered. It may be kept in mind that the cause of justice is much larger than mere technicalities. thereforee, the suit is not barred by Section 34 of the Specific Relief Act.
(44) The defendants have pleaded that the present suit for specific performance is barred under Section 14 of the Specific Relief Act. This section enumerates certain contracts which are not capable of specific enforcement. These are (1) where compensation in money is an adequate relief (2) where a contract runs into minute or numerous details or dependant upon the personal qualifications or volition of the parlies and so on (3) where a contract is in its nature deteminable and (4) a contract the performance of which involves the performance of a continuous duty which court cannot supervise.
(45) It is first argued on behalf of the defendants that the building was to be constructed for the purpose of selling flats as mentioned in clause Xi of the agreement and, thereforee, compensation in money would be adequate relief in case of non-performance of the agreement. This argument has no force. First of all clause Xi cannot be read in isolation. No doubt clause Xi does mention the sale of flats/spaces therein after construction of multi-storeyed building. But only these words cannot be read in isolation from the remaining language of this clause according to which parties 9,10 and Ii (deleted defendants 9 to II) agreed to forgo their rights under their agreement dated 6-1-72 with late Dr. Raghu Nath and agreed to vest those right in the plaintiff for construction which is described in clause 17 i.e. in consideration of allotment of certain constructed spaces. The plaintiff also was entitled to retain 65% of the constructed space in the multi-storeyed building and also acquire proprietory rights over the suit property. This type of contract between the parties is one the breach of which cannot be adequately compensated in terms of money. It is a matter of common knowledge that prices of multi-storeyed buildings have been continuously on the rise in the Metropolis of Delhi and at no point of time it will be possible to assess the damages which maybe suffered by the plaintiff in consequence of the breach of the contract. Explanationn (i) to Section 10 Specific Relief Act directs that the Court shall presume, unless the contrary is proved, that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money. Beyond saying that the grant of compensation in money will be adequate, none of the defendants has brought out any circumstance on the basis of which this argument has been advanced.
(46) It is also not a contract which runs into minute or numerous details or dependant upon personal qualifications or volition of the parties. The contract between the parties is that the defendants will make over irrevocable possession of the suit property to the plaintiff within a period of three months. Thereafter the construction and completion of the multi-storeyed building shall be undertaken by the plaintiff and all expenses connected therewith shall be incurred by it. During the construction or afterwards the defendants will not be responsible for paying any amount to the plaintiff or any person or persons. The defendants were not even entitled to interfere in any way or have anything to do with the construction of the multi-storeyed building. Clause 3 also provides that the plaintiff shall after taking delivery of possession will never be dis-possessed and deal with it in any manner it considered fit and proper for the construction of the multi-storeyed building. thereforee, it will be seen that no part of this contract is such which runs into minute or numerous details or is dependant upon any personal qualification or volition of either of, the parties. The only uncertain part was the recovery of possession from tenants j unlawful occupants and settlement of inter se disputes of the co-owners. Although a specific period of 3 months was provided for this purpose, co-owners or the given up defendants 9 to 11 do not seem to have taken much interest to achieve this end. It appears that efforts were being made by the co-owners and the aforesaid parties to frustrate the agreement with the plaintiff because they were trying to enter into a deal with Mahajans dining the pendency of this suit. When the bargain with Mahajans matured then within a very short span of time, either they recovered possession and made it over to Mahajans themselves on receipt of huge amount or Mahajans directly recovered possession from them. thereforee, all these un-certainties having been completed by Mahajans in connivance with the co-owners will ensure for the benefit of the plaintiff under the doctrines enshrined in Sections 40 and 52 T. P. Act.
(47) It also cannot be said that this contract was of a deteriminable nature. It also did not require performance of any duty, what to say of , a continuous duty, involving supervision by the court. The co-owners and the other concerned partner gave absolute powers to the plaintiff in the contract in the matter of raising multi-storeyed building in consideration of receiving certain built up space. They even did not mention the specifications of construction of the multi-storeyed building, thereforee, it cannot be said that any such duty of supervision in case of ordering specific performance was cast upon the court. It is, thereforee, held that the suit is not barred by Section 14 Specific Relief Act. Issues NOS. 17 and 18
(48) Both these issues can be dealt with together. Under issue No. 17, the court is to see whether there is no valid and lawful consideration for the agreement in dispute and under issue No. 18, it is to be seen whether the agreement is void and in violation of Sections 23 and 24 of the Indian Contract Act. The sub-mission on behalf of the defendants is that clause Xiii of the agreement Ex. Public Witness 1/1 contemplates delivery of possession prior to the execution and registration of the sale deed for constructing a multi-storeyed building. According to them this provision violates section 22 of the Specific Relief Act. It is also sub-mitted that this agreement purports to do that which is forbidden by law and is, thereforee, hit by Sections 23 and 24 of the Indian Contract Act. In support of this submission, it is further contended that according to the agreement, the consideration agreed to be given by the plaintiff to defendant No. 9 i. e. to a tenant is unlawful and against the provisions of Delhi Rent Control Act and thus against public policy. I do not agree with this contention. Defendants 9 to Ii voluntarily agreed to give up their rights in the property on receipt of a consideration which in terms of benefits far exceeded than an un-productive property in their possession. Moreover, it may be noted that all such persons have already relinquished their rights in the suit property on receipt of enormous consideration from Mahajans. Mahajans have proved on record such documents from each of the tenants/ unlawful occupants. All these documents are collectively exhibited as Ex. DW1113. At page 573 of the documents file is a letter of delivery of possession dated 7-11-87 by Satinder Pal Jaggi by which he confirmed delivery of physical possession of the portion in his possession as a tenant in 27 KGM. On the same day an agreement was executed between him and Mahajans by which he assigned all his rights in the portion of the suit property in his possession on receiving Rs. 9 lacs from Mahajans. There is also a receipt of Rs. 9 lacs executed by him in this respect. thereforee, it will be seen that all such persons relinquished their rights over their respective portions in the suit property on receipt of huge amounts from Mahajans. The defendants cannot be heard to say that such delivery of possession, if obtained by the co-owners for the benefit of the plaintiff would have been illegal and has become legal because it is now turn the benefit of Mahajans. Thus it cannot be said that there is any invalid or unlawful consideration involved in this agreement between the parties on which account it is hit by Sections 23 and 24 of the Indian Contract Act. Both the issues are answered accordingly. Issue No. 19
(49) It is argued under this issue on behalf of the defendants that the sale deed was to be executed according to the agreement after the construction and completion of the multi-storeyed building. According to them such a condition precedent is too vague or too wide and un-certain. It is also argued that the suit agreement is optional where promisor retains to himself unlimited right to decide or extend for his purpose. Reliance is also placed on Section 14(3)(c) of the Specific Relief Act which has already been discussed. None of the contentions advanced on behalf of the defendants are tenable. We must see why the sale deed was agreed to be executed after the completion of the multi-storeyed building. The land admittedly belonged to various co-owners wherein certain tenants/un-lawful occupants also had certain legal or illegal rights. It was only after receiving vacant possession that the plaintiff was supposed to invest a huge amount upon the construction of the multi-storeyed building. thereforee, when the sale deed was contemplated to be executed, the co-owners and other persons would have interest in the land of 27 Kgm while the plaintiff would have invested money on the multi-storeyed building. It was only on that account that a notional price of the land at Rs. 57 lacs and odd was fixed in lieu of which such persons were to receive 35% share of the constructed building. It could only be at that point that it could be said that the consideration from both the sides was available and the contract would mature to a point where both the parties could execute deeds of conveyance simultaneously. I am of the view that there is nothing vague or wide or uncertain in the agreement. The issue is accordingly decided. Issues No. 21, 22 & 24
(50) All these issues are inter-connected and can be disposed of together. The scope of inquiry under these issues is whether the agreement is contingent, incomplete or inchoate or whether it is in violation of the injunction in suit No. 405172. Sectional of the Indian Contract Act defines a contingent contract which is one to do or not to do something, if some event, collateral to such contract, does or does not happen. In this respect, it may be noted that the contract between the parties contains reciprocal promises and the promises made by the co-owners and other interested persons is turn achieving the main objects of construction and sharing of flats/spaces which cannot be deemed to be collucteral to the contract. My attention in particular has been drawn to Clause X of the agreement. According to this caluse, the agreement was entered into subject to settlement of all cases mentioned in Schedule A and other case? having a bearing, direct or indirect on the suit property and registration of the family settlement between the co-owners. I am of the view that none of the aforesaid matters can be said to be a purpose which is collateral to the contract. The illustration to Section 31 of the Indian Contract Act exemplifies the purpose which can be called to be collateral to a contract. It is as follows, 'A contracts to pay B Rs. 10,000.00 if B's house is burnt. This is a contingent contract.' From this illustration, it is clear that the burning of the house of B had absolutely no bearing upon the contract under which A agreed to pay Rs. 10,000.00 to B, But in the present case all the aforesaid purposes were, in fact, part of the reciprocal promises made by the defendants to achieve the main purpose of the agreement between the parties which was to construct a multistoreyed commercial building upon the suit property for the purpose of sharing the same in certain proportion. thereforee, on account of the aforesaid promises made between the parties in Clause X. the contract does not become contingent. My attention is then drawn to an order passed by N. N. Goswamy, J. regarding claure X. It is an admitted case that in 1972 plaintiff had filed another suit No. 405172 against the co-owners of the suit property for recovery of damages on account of breach of previous agreement between them. Ex. D16 is a copy of an order passed by this Court in is No. 1550/72 under Order 39 Rules I and 2 read with Section 151 of the Code, moved on behalf of the plaintiff against defendants I and 2 who are defendants I and 4. in the present suit. It may be clarified that defendant No. I died during the pendency of this suit and so his legal representatives have been brought on record. The plaintiff in that application prayed for issuing a temporary injunction restraining the two defendants from alienating/transferring the suit property till decision of the suit. The court found that in view of the respective stands taken by the parties, it was desirable to order the maintenance of status regarding the suit property. However it was observed, 'In case defendants I and 2 are able to secure a good offer for sale of the property in dispute they have liberty to apply to the court for necessary permission to sell or other- wise deal with the property when it will be considered on what terms the permission may or may not be granted to defendants I and 2'. During the operation of the impugned order one of the defendants moved a civil contempt petition No. 4 of 1978. The contempt was actually moved because it was alleged that the suit agreement in the present case amounted to contempt of the court and, thereforee, the plaintiff should be punished. There is no doubt that it is observed in that order that unless there was an agreement of settlement of all cases having a bearing, direct or indirect on the suit property and the building standing thereon, the said agreement cannot have any effect. Before fully adverting to the aforesaid portion of the order, I consider it appropriate to reproduce the entire order dated 17-4-79 passed on the contempt application which is as follows:
''THISis entirely a frivolous application and is nothing but an abuse of the process of the court. The allegations made in the application are that the defendants had entered into an agreement dated 6th day of July, 1977 by which the equitable mortgage has been created and the said agreement is in violation of an injunction order dated 2-12-74 issued by Yogeshwar Dayal. J. (as his Lordship then was). The operative portion of the order dated 2-12-1974 is as follow : It is fit and proper that defendants I and 2 are restrained from alienating or transfering the property in dispute till the disposal of the suit and I order accordingly. In case defendant Nos. 1 and 2 are able to secure a good offer for sale of the property in dispute they have liberty to apply to the court for necessary permission to sell or otherwise deal with the property when it will be considered on what terms the permission may or may not be granted to defendants No. 1 and 2. Clause 10 of the agreement entered into between the parties clearly states that the agreement is subject to settlement of all other cases having a bearing, direct or in-direct on 27 Kasturba Gandhi Marg and the building standing thereon. This makes it clear that unless there is an agreement to that effect, the said agreement cannot have any effect and is of no consequence and as such the same cannot be considered alienating or transferring the property. In this view of the matter, the application is dismissed with costs. Counsel fee Rs. 150.00 for each set of counsel for the parties.'
(51) A perusal of the order clearly shows that the contempt application was considered frivolous and the suit agreement was not considered amounting to the alienation or transfer of the suit property. It was rightly so held because it was merely an agreement between the parties. It is well known principle of law that an agreement in itself does not create any interest in the property although the obligation contained in the agreement is enforceable against the party who tries to back out of it. The contempt application itself was considered frivolous and dismissed and I wonder how such an argument has been advanced on behalf of the defendants that the agreement in suit is in violation of the order on the injunction application. The injunction was against sale or transfer and not against a contract of sale/exchange to be performed in future. I am, thereforee, of the view that neither the agreement is in violation of the injunction order in suit No. 405172 nor the agreement is contingent, incomplete or inchoate. Since the agreement is not found to be contingent, issue No. 22 loses all significance and becomes redundant. All the three issues are answered accordingly. Issue NO. 20
(52) Under this issue we have to see whether the suit agreement violates any provision of Section 5 of the Delhi Rent Control Act. Section 5(1) says that no person shall claim or receive any rent in excess of the standard rent, notwithstanding any agreement to the contrary. Section 5(2) debars the receipt of any premium or Pugree or claim in consideration of grant, renewal or continuance of tenancy or sub-tenancy. Section 5(3) debars a tenant or any other person acting on his behalf to claim or receive any payment in consideration of the relinquishment, transfer or assignment of his tenancy or sub-tenancy of any premises. However, Section 5(4)(h) permits a tenant to transfer possession of the tenanted premises if the landlord agrees to let to the tenant the whole or part of the premises when completed for the use of that person or any member of his family. The Section actually prohibits the claiming of any un-lawful charges in respect of the tenanted premises either by the landlord or by the tenant if the agreement between them does not fall within Section 5(4)(b). In the present case parties 9 to Ii in. the agreement who were originally defendants 9 to 11 agreed to surrender their rights in favor of the plaintiff in consideration of their getting quite a substantial portion of the constructed premises from the plaintiff. It may be also noted that it were these parties along with the co-owners who had actually approached the plaintiff to agree to the construction of the multi-storeyed building on certain terms and conditions. thereforee, strictly speaking the disability, if any, contained in Section 5 of Delhi Rent Control Act will not be applicable to the plaintiff because it is not the landlord of the premises and moreover, it has agreed to give a substantial portion of the constructed multi-storeyed building to the tenants. However, assuming for the sake of argument against the plaintiff in this respect, it can be said that there is some weakness in this respect in the case of the plaintiff. But Mahajans cannot be allowed to take advantage of that weakness because as held in the case of Gouri Dutt Maharaj v. Sukur Mohammed and others 1948 PC 147, the doctrine of lis pendenas applies irrespective of the strength of weakness of the case of a party. thereforee, at this stage when there is no tenant in the suit premises whole of which, except the small portion in possession of the plaintiff itself, is in occupation of Mahajans, Section 5 Delhi Rent Control Act has no application. Issue is accordingly decided. Issue NO. 23
(53) Under this issue we are to see whether the agreement in question is void on account of Section 269Uc of the Income Tax Act. This section is as follows:
NOTWITHSTANDINGanything contained in the Transfer of Property Act, 1882 (4 of 1882), or in any other law for the time being in force, no transfer of any immovable properly of such value exceeding five lakh rupees as may be prescribed, shall be effected except after an agreement for transfer is entered into between the person who intends transferring the immovable property (hereinafter referred to as the transferor) and the person to whom it is proposed to be transferred (hereinafter referred to as the Transferee) in accordance with the provisions of sub-section (2) at least 3 months before the intended date of transfer. (2) The agreement referred to in sub-section (1) shall be reduced to writing in the form of a statement by each of the parties to such transfer or by any of the parties to such transfer acting on behalf of himself and on behalf of the other parties. (3) Every statement referred to in sub-section (2) shall,- (i) be in the prescribed form; (ii) set forth such particulars as may be prescribed; and (iii) be verified in the prescribed manner, and shall be furnished to the appropriate authority in such manner and within such time as may be prescribed, by each of the parties to such transaction or by any of the parties to such transaction acting on behalf of himself and on behalf of the other-parties.'
(54) First of all it may be noted that this section was brought on the statute book vide Notification No. So 480(E) dated 7-8-86 and made applicable to Delhi with effect from 1-10-86. Thus it was not in force on the date of the suit agreement i.e. 6-7-1977.
(55) Learned counsel for the defendants, however, submitted that Rule 48-L framed under the Income Tax Act prescribes that in case an agreement having consideration of more than Rs. 5 lacs is entered into prior to 1-10-86, the parlies then have lo submit their statements within 15 days of the commencement of this Section. I do not agree with this contention on behalf of the learned counsel for the defendants. First of all, the operation of Section 269Uc is not retrospective, Its sub-clause (2) says that such an agreement shall be reduced into writing which clearly means that the mandate of Section 269Uc shall apply to future agreements. thereforee, the rule making authority does not seem to have any jurisdiction to extend the operation of Section 269Uc to agreements which came into existence prior to 1-10-86. Moreover, the present agreement is not for transfer of property by sale, but one for transfer by way of exchange of a property which is still to come into existence. The multi-storeyed building is not an existing immovable property. I am, thereforee, of the view that any such alleged non-compliance has no advese effect upon the validity of the agreement between the parties. Issue NO. 15
(56) It is admitted on behalf of the defendants that it is case of none of the parties that the agreement in question is a lease agreement. This issue, thereforee, seems to have been inadvertently framed and does not call for any determination. Issue NO. Ii
(57) Under this issue the court is to see whether the impugned agreement dated 6-7-1977 has been signed by all the co- owners of 27 KGM. Learned counsel for the plaintiff in this respect has submitted that this issue does not arise because it is nobody's case that there is any other co-owner of this property other than those who have signed the agreement. Defendants 7,8,12 and 13, it is further argued, claimed themselves to be the co-owners. But there were subsequent events after the framing of the issues. The plaintiff had moved is No. 826189 for amendment of the plaint. The amendments sought were (1) claim of damages in the alternative. (2) The change of desciption of defendants 12&13 Madhubala and Sneh Lata, from daughters of late Dr. Raghunath to the wives of Dr. Narotam Puri and S. P. Sud, respectively. (3) That Sumitra Devi defendant No. 7 and Shakti Nath defendant No. 8 were not the widow and son respectively of Dr. Raghunath.
(58) Amendment to the extent of prayer of damages was allowed. Rest of the amendments were disallowed. The plaintiff filed FAO(OS)273189 against the order of the learned single Judge dis-allowing certain amendments. Before the Hon'ble Division Bench, defendants 7, S, 12 and 13 made a statement that they would be bound by a decree for specific performance. if passed in the present suit. Hon'ble Division Bench passed the following order on 12-12-89 :
INthis view of the matter, it will not be necessary for the court to go into the question as to whether the said respondents 7, 8, 12 and 13 (defendants 7, 8, 12 and 13 in the present suit) are the co-owners of the property in question and secondly whether they had executed themselves or through their agents or attorneys the aforesaid; agreement. In other words, the said agreement is accepted by the respondents 7, 8, 12 and 13 as being binding upon them.'
(59) Upon the strength of the affidavits filed by defendants 7, 8, 12 and 13 and the order passed by the Division Bench, it is argued that these defendants bad given a clear undertaking to be bound by any decree which may be passed upon the basis of impugned agreement between the plaintiff and defendants I to 11 because these defendants accepted the agreement in dispute.
(60) It may be noted that on behalf of defendants I to 4, this position has not at all been controverter. However, on behalf of defendants 12 and 13, it is argued that they were not parties to the suit agreement and no relief was claimed against them. thereforee, it is submitted that no relief can be granted to the plaintiff against defendants 12 and 13. I do not agree with this contention. It is clearly mentioned in the order in appeal, certified copy of which is Ex. P23 that counsel for respondents 7, 8, 12 and 13 stated that if a decree for specific performance was passed against defendants I to 6 then defendants 7, 8, 12 and 13 would also be bound by the decree and they would accept the said agreement dated 6-7-77. That is why the Hon'ble Division Bench observed that the aforesaid agreement was accepted on behalf of defendants 7, 8, 12 and 13 as binding upon them. In view of these developments, I am of the definite view that the alleged non-signing of the impugned agreement by these defendants has no adverse effect upon the merits of the controversy. Issue NO. 8
(61) Under this issue, the court is to see the effect of an order dated 5-1-83 passed by the learned District Judge, Delhi vis-a-vis the impugned agreement. Copy of this order is Ex. PW1/16. This order shows that late Dr. Anand Nath and his sister Indra Jyoti Sarup moved an application under Sections 67 and 71 of the Indian Lunacy Act with the prayer that either of them may be appointed guardian of the person of Dr. Miss Pushpa Raghunath lunatic and Manager of the Lunatic's estate. After evidence, the learned District Judge observed in para 5, 'From the aforesaid evidence produced by the petitioners which I have hardly any reason to disbelieve, I am satisfied that Dr. Miss Pushpa Raghunath has been suffering from chronic paranoid schizophrenia since long and is completely insane and cannot look after herself nor can she manage her properties. She has been living with petitioner No. I who has been looking after her and her property and thus petitioner No. 1 who is the eldest brother of Dr. Miss Pushpa Raghunath appears to be fittest and most suitable person for being appointed guardian of the person of Dr. Miss Pushpa Raghunath as also the Manager of her property and I order accordingly.' It is, thereforee, apparent from the tenure of the above order that the aforesaid lunatic who is defendant No. 3 in the present suit had been living with Dr. Anand Nath who had been looking after her as also her property. He was declared to be the most suitable person to be appointed as guardian. it was Dr. Anand Nath only who had executed the impugned agreement as a guardian of Dr. Miss Pushpa Nath. He had also undertaken to obtain orders of a competent court in this respect. It is immaterial that Dr. Anand Nath sought the permission only when he wanted to transfer the property of the lunatic along with his own share to Mahajans. But that further clearly shows that Dr. Anand Nath had intentionally delayed the obtaining of such an order towards the fulfillment of the objects of the impugned agreement. By the doctrine of lis pendens that order obtained by Dr. Anand Nath will positively ensure for the benefit of the plaintiff in this suit. Vide order of the learned District Judge dated 17-9-87 (Ex. D2) Dr. Anand Nath was granted permission to sell 1/9th share of the lunatic in the suit property. For the same reason if the co-owners i.e. the defendants have transferred the share of the lunatic to Mahajans during the pendency of the present suit, the same must also ensure for the benefit of the plaintiff because admittedly Mahajans have stepped into the shoes of all the co-owners and thus represent all of them (Page 833 of written statement). thereforee, the effect of the order dated 5-1-83 passed by the District Judge, Delhi, vis-a-vis the agreement in dispute is that the same having been passed in favor of Mahajans luring the pendency of this suit, its benefit will be available to the plaintiff. Issue is accordingly decided. Issue NOS. 6 & 10
(62) Under these issues we are to see whether the impugned agreement, insofar as it purports to be signed on behalf of defendants 3 and 6 is valid and effective in view of the unsoundness of mind of defendant No. 3 and minority of defendant No. 6 on the date of signing of agreement or that it is contrary to Section 11 Hmg Act. It has been found under issue No. 8 that vide order dated 5-1-83 Ex. Public Witness U16, the learned District Judge had appointed Dr. Anand Nath as the guardian of the person and Manager of the property of the Lunatic and further that Dr. Anand Nath was granted permission vide order Ex. D2 to execute a sale deed in respect of the 1/9th share of the Lunatic. Now coming to the question whether Tej Nath could actually be considered as the de facto guardian of Tarun Kumar minor. It is not disputed by either of the parties that the mother and father of the minor had died long back and Tej Nath being maternal uncle of the minor was taking care of him. Clause Xiii of the impugned agreement Ex. Public Witness 1/1 recites that he had undertaken to obtain authorisation from a competent court for transfer of the share of the minor. Guardian has been defined in Section 4(b) of the Hindu Minority and Guardianship Act, 1956 (HMG Act for short). It says that 'Guardian' means a person having the care of the person of a minor or of his property or of both of his person and property. The guardian also includes a natural guardian, a guardian appointed by the will of the minor's father or mother, a guardian appointed or declared by court, and a person empowered to act as such by or under any enactment relating to any Court of Wards. This definition does not restrict the meaning of the word guardian to a person either appointed as a guardian or declared as such by a court. It seems to have been used in a wider sense. It is an inclusive definition. It also means a person who takes care of the person and property of a minor. Such a person would be a de facto guardan of a minor, It is thereforee, not possible to say that the word guardian would apply only either to a natural guardian or the one appointed by the court. Both the parents of Tarun Kumar minor in this case were dead. Tej Nath was his maternal uncle. In the circumstances of this case where even the other co-owners of the property agreed to transfer their shares in 27 Kgm in consideration of receiving a certain proportionate area built up by the plaintiff, it is not possible to say that Tej Nath de facto guardian acted in any manner against the interest of the minor. It may further be noted that this very Tej Nath. defendant acted as a guardian of the minor in the agreement of the co-owners with Mahajans on 19-5-80. Its copy is Ex. Pi 6. In this agreement also all other heirs of Dr. Raghunath were parties. It was in pursuance of this agreement that the property has finally been purchased by Mahajans vide sale deed dated 30-10-87. Prior to the final sale deed, supplementary agreement dated 4-6-80, copy of which is Ex. PI7, was also executed by the co-owners with Mahajans. In that also Tej Nath acted as guardian of the minor. Same is the position in the second supplementary agreement dated 20-8-84, copy of which is Ex. P18. But by this time it appears that Tarun Kumar became a major and, thereforee, he signed Ex. Pi 8 for himself. Tanin Kumar never denied that Tej Nath was not his de facto guardian. In the third supplementary agreement dated 24-9-86 Ex. P19, the same Tej Nath is described as an attorney of Tarun Kumar. From the above facts, it is, thereforee, clear that at all relevant times Tej Nath either acted as guardian of Tarun Kumar or was recognised as attorney by him after the minor became a major.
(63) The objection on behalf of the defendants is, that the impugned agreement dated 6-7-1977 is contrary to Section 11 of the Indian Contract Act (IC Act for short) and Sections 6 and 11 of the Hmg Act insofar as it purpoports to be signed on behalf of the minor and the lunatic and, thereforee, the same is void. I am unable to persuade myself to agree to these submissions. So far as Section 11, Ic Act is concerned, it says, 'Every person in competent to contract who is of the age of majority according to the law to which, the is subject, and who is of sound mind and is not dis-qualified from contracting by any law to which he is subject.' The language of the Section debars only a minor from directly entering into any contract with any person. It does not create a bar for a guardian to act on behalf of a minor. This prohibition is contained only in Section 11 of the Hmg Act. It says, 'After the commencement of this Act, no person shall be entitled to dispose of, or deal with, the property of a Hindu minor merely on the ground of his or her being the de facto guardian of the minor.' Section 12 immediately following the above section, however, prohibits the appointment of aguardian in respect of an undivided interest ill joint family of a minor's property. These scope effect of Section 12 came for consideration in the case of Krishnakant Maganlal : AIR1961Guj68. The High Court held in para 7 at page 71, 'Section 12 which deals with guardians appointed or declared by Court specifically provides that no guardian shall be appointed for a minor in respect of his undivided interest in joint family property. It will' thus be seen that all the three types of guardians dealt with by the Act, viz., natural guardians, testamentary guardians and guardians appointed or declared by Court are either guardians in respect of the minor's person or guardians in respect of the minor's property other than his undivided interest in joint family property.' I am in respectful agreement with the observations of the Gujarat High Court regarding the interpretation of Section 12 which prohibits the appointment of a guardian in respect of an un-divided interest of a minor in a joint family property. In the present case, the property in dispute i.e. 27 Kgm was directly under the management of not only one adult member but all the adult members. Section 6 Hmg Act also specifically excludes the administration of un-divided interest in joint family property of aminor and it declares natural guardians of a Hindu minor in respect of his person and property only, specifically excluding his un-divided interest in the joint family property. thereforee, it is legitimate to presume that this Act does not extend to the administration of an undivided interest of a minor in a joint family property which can continue to be administered by a defacto guardian. Confronted with this situation, an attempt was also made on behalf of the defendants to urge that the plaintiff did not plead any case that Tarun Kumar was member of a joint Hindu family or that be bad undivided interest in joint property. It may be noted that this issue has been struck only upon the basis of the pleadings of the defendants land, thereforee, it cannot be said that such an argument is not open to the plaintiff. Moreover, all the co-owners have inherited the suit property on. the death of their father) grandfather and so it is obvious that it is a joint family property wherein the minor defendant has an undivided interest.
(64) On behalf of defendants, my attention has been drawn to the case of Rajalakshmi and others v.Minor Ramachandran and another Air 1967 Mad 117, and Daneyi Gurumurty v. Raghu Podhan and another : AIR1967Ori68. Both these authorities are not helpful to the case of the defendants because they are only in respect of the, interpretation of Section 11 Hmg Act and Section 12 of the Act did not fall for interpretation in either of these authorities because the property involved in these cases was not the undivided interest of the minor in the joint family property. thereforee, it cannot be said that the impugned agreement is contrary to Section 11 Hmg Act because Section 11 does not at all deal with the undivided interest of a minor in a joint family property. Both these issues are answered accordingly. Issue NO. 7
(65) Under this issue the court is to see whether defendants I and 4 have performed their undertaking in the impugned agreement to procure authorisation from a competent court and if not what is its effect. Authorisations were required to be performed by defendants I and 4 because Tarun Kumar was a minor and Dr. (Miss) Pushpa Nath was of unsound mind. These undertakings were to be performed because the co-owners i.e.defendants Ii to 8 had agreed in clause xviii to transfer and assign to the plaintiff all such rights in the suit property which would give unrestricted and absolute right to the plaintiff to take its possession. This clause further shows that at the time of this agreement, party No. 4 i.e. Tej Nath defendant produced a power of attorney on behalf of Partap Nath defendant and also undertook to procure an order of the competent court authorising him to act as a lawful guardian of the minor. Party No. i.e. Dr. Anand Nath defendant (since dead) undertoot to produce an order of the competent court authorising him to lawfully act on behalf of the lunatic. In this respect, it may be noted that probably the parties were under a mis-apprehension that some authority was required by Tej Nath to act on behalf of the minor. As we have seen above. Section 12 Hmg Act clearly says that no appointment of a guardian is required In respect of an undivided interest of a minor in joint family property. All these things were required to be done because possession of the suit property was to be given by the co-owners to the plaintiff so that a multi-storeyed building could be constructed and after its construction, documents of transfer of right, title and interest could be executed between the parties. Under issue No. 5, it has already been found and also admitted by the Mahajans in their written statement that they have stepped into the shoes of all the defendants. In view of this fact, defendants I and 4 do not require to fulfill any such obligation now and their obligation has in fact been taken over by Mahajans and they art obliged to deliver the possession to the plaintiff. In view of this fact, this issue has practically become redundant. Issue NO. 12
(66) Under this issue, we are to see whether defendant No. 11 was authorised to sign the impugned agreement on behalf of defedants 7 and 8 and if not, are they estopped by their conduct from challenging his authority to sign the agreement on their behalf. The order of the Hon'ble Division Bench, certified copy of which is Ex. P21 shows that the defendants counsel Made a statement that defendants 7 and 8 will also hand over vacant possession of the premises in question if. they were held to be In possession thereof and a decree for specific performance was passed. They were only given opportunity to challenge the vali duty of the agreement. The Division Bench also passed an order on 12-12-89, certified' copy of which is Ex. P23 wherein the counsel for defendants 7, 8, 12 and 13 stated that if a decree for specific performance was passed against defendants I to 6, then the aforesaid defendants would also be bound by that decree and they would accept the impugned agreement, thereforee, it appears that any finding on this issue has become irrelevant. Issue NO. 14
(67) This issue was deleted vide order of the court dated 15-9-89 in is No. 6670189 and, thereforee, does not call for any decision. Issue N0.29(a)
(68) Under this issue we are to see whether the plaintiff has always been ready and willing to perform its part of the contract. This issue was framed on is No. 7643/89 being moved by Mahajans. In para xviii of the written statement, Mahajans took up a plea that the plaintiff was not ready and willing to perform its part of the contract till the time of the institution of the suit, by acting in pursuance of the impugned agreement for the construction of the multi-storeyed building such as preparation and execution of plans and hence the agreement was hit by Section 16(c) of the Specific Relief Act. In this respect, it may be acted that such an objection has not been taken by any of the co-owners. Section 16(c) says that specific performance of a contract cannot be enforced in favor of a person who tails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than the terms the performance of which has been prevented or waived by the defendants. So far as the plaintiff is concerned, the essential term of the contract qua it was that after construction of the multi-storeyed building, the plaintiff will transfer the ownership of 35 per cent of the built up space to the heirs of Dr. Raghunath and defendants 9 to 11 (since given up). For achieving that purpose the defendants agreed to transfer the whole of the suit property in favor of the plaintiff by sale deed which was to be executed after the construction of the multi-storeyed building. It is quite natural that the plaintiff could construct the multi-storeyed building only after the defendants had delivered possession of the suit property to the plaintiff. Unless possession was delivered, the plaintiff was not in a position to construct the building. The preparation and submission of plans and also obtaining permission and sanction for the construction of the multi-storeyed building are actually such steps which could be contemplated only after possession had been delivered by the defendants to the plaintiff. Otherwise the plaintiff has averred in the plaint that it has always been ready and willing to perform its part of the contract and that it was willing to construct and promote the multi-storeyed building according to the agreement. Sushil Ansal as Public Witness 1 at page 591 has stated that they appointed architects for preparing plans/drawings for the development of the site 'rs a follow up of the suit agreement and that they had all the resources to execute the project. The plaintiff has also proved copy of a letter Ex. Public Witness I 13 dated 21-9-77, by which it called upon the defendants to settle their inter se proceedings/disputes and obtain vacant possession. They also agreed with the suggestion of the defendants that a period of 3 months fixed in the agreement for obtaining possession from the tenants/unlawful occupants was insufficient. In view of the fact that there is strong resistance on behalf of the defendants even after expiry of almost 14 years of the agreement, it will, thereforee, not be correct to say that plaintiff has not been ready and willing to construct a multi-storeyed building. I am, thereforee, of the view that the plaintiff has always been ready and willing to perform its part of the agreement. Issue NO. 9
(69) This issue has become redundant in view of the findings on Issue No. 6 that the impugned agreement has been validly signed on behalf of defendants 3 and 6, a lunatic and minor respectively. Issue NO. 30
(70) In view of the fact that the impugned agreement is specifically enforceable and under Explanationn (1) appended to Section 10 of the Specific Relief Act, the court shall presume, unless and until the contrary is proved, that the breach of a contract of transfer immovable property cannot be adequately relieved by compensation in money, this issue does not call for any determination. Issue NO. 25
(71) Under this issue, it is to be dctermined whether the agreement dated 22-3-1971 between the plaintiff and late Dr.Raghunath was a lease or a license deed. The issue does not seem to have been properly framed because it reads. 'Whether the agreement dated 22-3-1971 is an agreement or a license'. Both the parties have argued this issue on the premises of a lease or a license agreement. thereforee, this issue is modified as 'Whether the agreement dated 22-3-1971 is a lease or a licenec deed'
(72) It is contended on behalf of the plaintiff that this document is actually independent of the other documents executed by late Dr. Raghunath in favor of the plaintiff at that time. On the other hand, it is contended on behalf of the defendants that this document purporting to be a lease deed was either in fact a license deed or being part of a package deal with the execution of other documents, should be deemed to have fallen because of the revocation of the entire previous deal. It will be necessary to describe some of the relevant terms of this document which is Ex. D15. After narrating the particulars of the parties, it describes premises 27 Kgm as a plot of land measuring 5735 sq. yards with double-storeyed building built thereon, being the absolute and exclusive property of the Lesser date Dr. Raghunath. It then describes that he had absolute and un-fettered right to let out the said premises and that in consideration of the rent, covenants and stipulations hereinafter reserved and contained, and on the part of the lessee to be paid, observed and performed, the Lesser hereby demises to the lessee of the aforesaid premises together with full rights of ingress and engress thereto and there from for the lessee, its servants, employees, agents, visitors etc. and all the rights, privileges etc. vesting in the Lesser upon the lessee who will hold the same for a term of 20 years. It is wrongly stated in the plaint of the other suit instituted by Mahajans that according to this document the Lesser i.e. late Dr. Raghunath only had the right to terminate the lease even earlier. In fact, this right was also given to the Lessee. The document further recites that the lessee will pay Rs. 500 per month inclusive of present and future Municipal and other rates, charges and taxes etc. payable either by the owner or occupier or both and further that the lessee had been given actual and physical possession of one room with verandah in front, blocked passage of lobby and attached lawn on the rear side of the building. Since some tenants were in occupation of other portion of this premises, the lease deed stated in clause 4, 'The Lessee having taken the whole of the premises known as 27 Curzon Road, New Delhi (earlier name of Kasturba Gandhi Marg), the lessee shall be entitled to deal with other tenants in different parts or portions of the said premises and recover rent from them for the period commencing from the date thereof and if necessary also to take action or proceedings for evicting the said tenants whose names and particulars are given hereinbelow : (1) Shri Ram Lal Jaggi (2) Mrs. Indira Moni Sehgal (3) Dr. S. N. Kaul (4) Dewan Ramesh Chand (5) Gargi'.
(73) The document read individually, thereforee, clearly indicates that whatever portion of the premises in dispute was vacant was handed over to the plaintiff while it was permitted to deal with the tenants including recovery of rent from them and also evict them, if necessary, by taking resort to eviction proceedings. I am of the view that by conferring the later rights upon the plaintiff, Dr. Raghunath certainly vested constructive possession of the occupied portion of the premises upon the plaintiff. This conclusion is reinforced by the fact that the rent of Rs. 500.00 per month was fixed in respect of the entire building. thereforee, it is not possible to say that by means of this document only a sort of a license was created in favor of the plaintiff by late Dr. Raghunah. In the case of lease, there is a transfer of interest in the property, while in the case of a license there is only a privilege to enjoy the property. The intention of the parties is generally gathered from the terms and conditions of the deed. thereforee, divorced from other documents, this document clearly creates a lease in favor of the plaintiff and not a license.
(74) Even if we consider this document to be a part of a bigger deal, still the conclusion is in escapabble that the Lesser intended to create a lease in favor of the plaintiff by this document so as to bind himself that in no way he gets out of the deal of the construction of a cinema building and a multi-storeyed commercial building. The parties at that time executed four documents which are described in the main document, copy of which is Ex.D 12. These were the aforesaid lease deed, partnership agreement) an affidavit by late Dr. Raghunath and a power of attorney by him in favor of Chiranji Lal and Slishil Ansal, Chairman and Director respectively of the plaintiff at that time. Ex. D12 recites in clause 4 that a perpetual license was actually created in favor of the plaintiff of the suit premises and that too was qualified by the word Irrevocable so that the possession of the said plot shall become exclusively that of the plaintiff in perpetuity.
(75) Even the impugned agreement which was executed after the expiry of more than 5 years made a reference in Clause Ix to the lease deed dated .18-3-1971. It describes the possession of the plaintiff in respect of certain rooms and rear lawn in the building as per registered lease deed dated 18-3-1971 entered into between late Dr. Raghunath and the plaintiff. This agreement further states in clause 3 that the possession of the suit premises once taken by the plaintiff for the aforesaid purpose i.e. for construction of the multi-storeyed building and its sharing in the ratio of-65 per cent and 35 per cent, shall be on the basis that the plaintiff shall never be put out of possession and it shall deal with the same in any manner it shall consider fit and proper for the construction of the multi-storeyed building. This clause clearly gives an indication about the intention of the parties. Once the possession was taken over by the plaintiff, it was never to be dispossessed and it could deal with the property in any manner it considered fit. Such a right conferred on the plaintiff clearly negatives the theory of license because in the case of a license the paramount control of property always remains with the licensor. In this case complete control of the building was intended to be vested in the plaintiff. According to clause J(a) of the lease deed, Ex. D15, the time till which the tenancy was to remain in force is also mentioned. It is stated that the rent shall cease to be due on the construction of the building meaning thereby that (hereafter the plaintiff shall cease to be a tenant. The Lesser, thereforee, intentionally seems to have created the interest of tenancy and vested the same in the plaintiff so that he may not be able to repudiate the agreement in any manner whatsoever. This will clearly indicate an intention on the part of the Lesser that in all situations tenancy rights were to remain vested in the plaintiff, till construction of the building. If that be so, then it is immaterial whether the main agreement of the Cinema and building construction was achieved or not, and that is why the deed mentioned that the rent will cease only on the completion of the aforesaid construction. If that were not so, the lease rights under this deed would not have been mentioned in clause Ix of the impugned agreement. It further shows that it was meant to be treated quite apart from the package deal. It is, thereforee, held that Ex. D15 is a lease deed. Issue NO. 29 (Relief)
(76) Admittedly there has been a change of ownership of the suit property during the pendency of the suit. Mahajana have purchased the same from the main contesting defendants who are the heirs of late Dr. Raghunath. In the case of Pasupuleti Venkateswarlu v. The Motor & General Traders : 3SCR958 it was held, 'For making the right or remedy claimed by the party just and meaningful as also legally and factually in accord with the current realities, the court can, and in many cases must, take cautious cognizance of events and developments subsequent to the institution of the proceeding provided the rules of fairness to both sides are scrupulously obeyed.'
(77) The co-owners i.e. the contesting defendants admit that they have transferred all their rights in the suit property to Mahajans on receipt of Rs. 1 crore. The case of the Mahajans also is that they have stepped into the shoes of the co-owners by purchase. Mahajans have also proved on record various agreements, receipts and letters of delivery of possession showing that even the persons who were earlier imp leaded as defendants 9 to 11 and other occupants of the premises have sold their tenancy/possessory rights in the various portions of the suit property to Mahajans. These are collectively Ex. DW1/13. thereforee, I am of the view that now Mahajans only should be allowed to have 35 per cent share of the constructed multistoreyed building in substitution of the rights of the contesting defendants and all such persons.
(78) thereforee, the plaintiff is hereby granted a decree for specific performance of the agreement Ex. Public Witness 1/1 as also a decree for declaration that plaintiff is the lawful tenant of the property bearing No. 27, Kasturba Gandhi Marg, New Delhi against the defendants with costs of the suit. Defendant No. 32 shall hand over possession of the suit property to the plaintiff within two weeks from the date of the judgment. Defendant No. 32 shall also co-operate with the plaintiff by signing necessary documents and also give irrevocable power of attorney and do all other needful acts so that the plaintiff may obtain necessary permission and sanctions for the achievement of the main objects of the agreement within two weeks. The plaintiff shall, within 3 years of the date of receiving possession and/or within 3 years from the date of sanction of plans and grant of necessary permission/sanctions, whichever is later, construct a multistoried building en the suit property as provided in the agreement and allot 35 per cent of the built up space to defendant No. 32 within one month. On such allotment, defendant No. 32, in whom the title in the suit property now vests under the sale deed dated 30-10-1987, shall within one month from the date of allotment execute and get registered a deed of transfer of ownership of the suit property in favor of the plaintiff. The other defendants shall also join in the execution of the sale deed. The plaintiff shall deliver possession of the 35 per cent of the built up space to defendant No. 32 within two weeks of the execution and registration of the transfer deed.