I.A. Nos. 2286/2010, 1460/2014, 5310/2014 in CS (OS) 353/2006, Ex. P. 232/2007 & Ex. Appl. (OS) 35/2010. Case: R.S. Chhabra Vs Gopal Krishan Kapoor. High Court of Delhi (India)
| Case Number | I.A. Nos. 2286/2010, 1460/2014, 5310/2014 in CS (OS) 353/2006, Ex. P. 232/2007 & Ex. Appl. (OS) 35/2010 |
| Counsel | For Appellant: Sandeep Sethi, Sr. Advocate, Chaman Lal Sachdeva, Preet Pal Singh and Priyam Mehta, Advocates and For Respondents: Pritesh Kapoor, Radhika Sharma and Bina Gupta, Advocates |
| Judges | Indermeet Kaur, J. |
| Issue | Code of Civil Procedure, 1908 (CPC) - Order XI Rule 12; Order XXIII Rule 3; Indian Contract Act, 1872 - Sections 18, 19; Specific Relief Act, 1963 - Section 28 |
| Judgement Date | May 06, 2015 |
| Court | High Court of Delhi (India) |
Judgment:
Indermeet Kaur, J.
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These are three applications filed by the judgment debtor.
I.A. No. 2286/2010 (under Order XXIII Rule 3 of the Code)
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This is an application filed by the judgment debtor under Order XXIII Rule 3 of the Civil Procedure Code, 1908 (hereinafter referred to as the 'Code'); reliance has been placed upon the proviso; submission being that the consent decree passed by the Court on 20.03.2006 in CS (OS) No. 353/2006 was obtained under a misrepresentation and fraud; submission of the plaintiff (R.S. Chhabra) in those pleadings that he was a valid assignee of Rajesh Kumar (defendant No. 6 in that suit) was a false and fraudulent averment; there was no valid assignment by defendant No. 6 in favour of the plaintiff. In the instant case, the deed of assignment dated 20.04.2005 was only an agreement which was yet to be followed up by another document and not being a complete deed of assignment and the whole case of the plaintiff being premised on this document and this being fully known to the plaintiff, he is guilty of misrepresentation within the meaning of Section 18 of the Indian Contract Act. The consent decree passed on 20.03.2006 premised on this assignment deed suffering from a misrepresentation is a voidable contract and the defendant accordingly seeks setting aside of this decree. His second submission on the agreement dated 20.04.2005 is based on the averments that a person holding a back to back agreement to sell with the original proposed buyer would not be entitled to sue on the first agreement in the absence of a valid and a complete assignment in his favour. There being no complete assignment in favour of the plaintiff, the present suit was not maintainable. On this ground also, the decree dated 20.03.2006 is liable to be set aside. This fact was learnt by the judgment debtors only when defendant No. 6 filed an application before the Division Bench seeking setting aside of the consent decree dated 20.03.2006. Submission being that the dispute between the parties had in fact travelled right up to the Supreme Court and the Apex Court vide its order dated 20.11.2009 had granted liberty to the present applicant/judgment debtor to move an appropriate application under Order XXIII Rule 3 of the Code pursuant to which this present application has been filed. Learned counsel for the applicant has placed reliance upon an extract from the text of "Chitty on Contracts" as also "Halsbury's Laws of England" to argue as to what is a 'misrepresentation'. Submission being that a statement of fact, past or present, which is unfounded and which is known to the plaintiff to be a wrong is a 'misrepresentation'. Reliance has also been placed upon the judgment of the Apex Court in (1968) 2 SCR 797 Ningawwa Vs. Byrappa Shiddappa Hireknrabar and Others to support this submission. Submission being that where a contract is based on fraud or misrepresentation, it is voidable.
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Reply has been filed opposing the application. It is pointed out that the decree dated 20.03.2006 has attained a finality and as per the version of the applicant/judgment debtor while dismissing the SLP on 20.11.2009, the Supreme Court had refrained from interfering with the orders of the Court below which included the consent decree dated 20.03.2006. Submission being that the application is even otherwise barred by law of limitation; under Article 137 of Schedule I of the Limitation Act, an application seeking setting aside of the decree which is based either on fraud or misrepresentation has to be filed within a period of three years which period has to be counted from the date of knowledge of this fraud or misrepresentation. Even as per the case of the applicant, he learnt about this fraud or misrepresentation when defendant No. 6 filed an application before the Division Bench on 18.05.2006. The present application filed in December, 2010 is barred by limitation. Attention has been drawn to the memorandum of understanding dated 28.02.2005 executed between the plaintiff and defendant No. 6 wherein Clause 7 gave a specific right of assignment to defendant No. 6. Averment being that on 20.04.2005, there was a valid assignment made by defendant No. 6 in favour of the plaintiff and this fact was also well within the knowledge of the plaintiff as this document dated 20.04.2005 had been filed by the plaintiff along with his suit. Even otherwise, in view of the judgment of the Apex Court reported as AIR 2004 SC 348 Shyam Singh Vs. Daryao Singh (dead) by Lrs. and Ors. even in the absence of any words or expressions in a document where there is prohibition of an assignment or transfer, the implied prohibition cannot be read into such a document. The document dated 20.04.2005 was a valid assignment. This application on all counts is liable to be dismissed.
I.A. No. 1460/2014 (under Section 28 of the Specific Relief Act)
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This is an application filed by defendants No. 1 to 4 under Section 28 of the Specific Relief Act (hereinafter referred to as the 'said Act'). Submission being that the Court even after passing a decree in a suit for specific performance is not functus officio; the decree being only a preliminary decree; the Court is still in seized of the matter. Where the timeline laid down by the Court had not been adhered to by the decree holder as is so in the present case and the decree holder having failed to deposit the balance amount in terms of the direction contained in the order of the executing Court dated 31.08.2009 and it being clear that the decree holder in fact did not have the money to deposit the balance sum of Rs. 4.20 crores, it is a clear case where equitable consideration should not lie in favour of such a decree holder and the decree dated 20.03.2006 is liable to be set aside. For this proposition he has placed reliance upon 69 (1997) DLT 996 Parvesh Kumar Gulati Vs. Darshan Singh Gulati. Reliance has also been placed upon (1999) 4 SCC 702 VS. Palanichamy Chettiar Firm Vs. C. Alagappan and Another and (2009) 8 SCC 766 Bhupinder Kumar Vs. Angrej Singh.
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Reply has been filed opposing the application. It is pointed out that there was no timeline laid down by the Court which was contained in the order dated 20.03.2006. The executing Court in its order dated 31.08.2009 had laid down certain directions about the terms of payment and the obligation on the part of the decree holder to make payment would have arisen only 15 days after the date of execution of the conveyance deed which was to be executed in favour of the judgment debtor. The conveyance deed has not yet been executed in favour of the judgment debtor. This is all because of the fault of the judgment debtor and this is clear from the report of the Local Commissioner (J.K. Aggarwal) who had been appointed by the executing Court vide its order dated 31.08.2009. Attention has been drawn to the three interim reports filed by the Local Commissioner. Submission being that it does not now lie in the mouth of the judgment debtor to press his prayer in terms of Section 28 as the whole fault lies with the judgment debtor. Reliance has been placed upon AIR 1970 SC 546 Nathulal Vs. Phoolchand and 2005(5) ALL MR (SC) 15 P. D'Souza Vs. Shondrilo Naidu to support an argument that where it is clear from the documents on record that there were obligations on the part of the defendant to perform his part of the agreement and when he had not done so, the question of plaintiffs readiness and willing to perform his part of the contract would not arise. Reliance has also been placed upon (1972) 3 SCC 684 Hungerford Investment Trust Limited (In Voluntary Liquidation) Vs. Haridas Mundhra and Others to put forward an argument that this Court has a limited power to grant relief under the provisions of Section 28 of the said Act. It is not an unlimited power; it is only where the vendor alleges that the vendee has failed to perform his part of the obligation, is the vendor entitled to get relief which prayer is clearly not available to the applicant in the instant case.
I.A. No. 5310/2014 (under Order 11 Rule 12 of the Code)
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This third application has been filed by the judgment debtor under Order 11 Rule 12 of the Code. Submission being that the bank statement for the period w.e.f. June, 2009 till date along with income tax returns (for the year 2006-2007) of the decree holder/plaintiff should be called upon by the Court to establish the submission made by the judgment debtor/applicant that the decree holder in fact had no money to comply with the directions contained in the order dated 20.03.2006; the decree holder not having any funds was the reason why he did not pay the balance sum of Rs. 4.20 crore; he is not entitled to any equitable consideration; the decree dated 20.03.2006 is accordingly liable to be set aside.
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Reply has been filed opposing the aforestated application. Submission is that the application has been filed with a malafide intention and only to delay the proceedings in the Court; the obligation was upon the judgment debtor/applicant who had to comply with the directions contained in the order dated 31.08.2009 (passed by the executing Court) and the obligation on the part of the decree holder to pay the balance amount would have arisen only after the execution of the conveyance deed in favour of the defendant which was not executed in their favour all because of the fault of the judgment debtor. The application even otherwise could only have been filed in a pending suit and admittedly in the instant case, the suit proceedings already stand disposed of in terms of a consent decree dated 20.03.2006.
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Arguments have been heard on all the aforenoted applications. The following factual matrix emerges:
(i) CS (OS) No. 353/2006 was filed by the plaintiff (R.S. Chhabra) against six defendants of whom defendants No. 1 to 5 were the persons with whom defendant No. 6 had entered into an agreement to sell dated 28.02.2005 qua a property bearing No...
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