*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ IA.No.9074/2005 & CS(OS)864/1994
% Date of decision: 20.11.2008.
LIC HOUSING FINANCE LTD ....... Plaintiff
Through: Mr Santosh Paul and Mr Arvind
Gupta, Advocates.
Versus
M/S PEARL DEVELOPERS (P) LTD ....Defendants 1&2/applicants
& ANOTHER
Through: Mr A.K. Singla, Sr Advocate with Mr
Pankaj Gupta, Advocate for the defendants 1&2/
applicants.
And
IA.No.9073/2005 in CS(OS)369/1994
M/S PEARL DEVELOPERS (P) LTD ...Plaintiff/Applicant
Through: Mr A.K. Singla, Sr Advocate with Mr
Pankaj Gupta, Advocate for the applicant.
Versus
LIC HOUSING FINANCE LTD ....Defendant
Through: Mr Santosh Paul and Mr Arvind Gupta,
Advocates.
And
RA 28/2005 IN CS(OS) 113/1995
M/S PEARL DEVELOPERS (P) LTD ...Plaintiff/Applicant
Through: Mr A.K. Singla, Sr Advocate with Mr
Pankaj Gupta, Advocate.
Versus
LIC HOUSING FINANCE LTD ....Respondent
IA9074.05inCS(OS)864.94,IA9073/05inCS(OS)369/94&RA28/05inCS113/95 Page 1 of 12
Through: Through: Mr Santosh Paul and Mr
Arvind Gupta, Advocates.
And
Ex.P. 36/2008
LIC HOUSING FINANCE LTD ....... Decree Holder
Through: Mr Ranjan Kumar, Advocate.
Versus
M/S PEARL DEVELOPERS (P) LTD ....Judgment Debtors
& ORS
Through: Mr A.K. Singla, Sr Advocate with Mr
Pankaj Gupta, Advocate for judgment debtors 1-4.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. Whether reporters of Local papers may
be allowed to see the judgment? YES
2. To be referred to the reporter or not? YES
3. Whether the judgment should be reported YES
in the Digest?
RAJIV SAHAI ENDLAW, J.
1. The three applications aforesaid have been filed in the
three suits aforesaid, all for review of the judgment dated 29th
September, 2005 disposing of the three suits.
2. Before setting out the grounds on which the review is
sought, it is relevant to set out the scope of the three suits, as
noticed in the judgment dated 29th September, 2005 itself. M/s Pearl
Developers Private Limited (hereinafter called PDPL) had applied to
LIC Housing Finance Limited (hereinafter called LIC) for a loan of Rs
100 lacs as construction finance. LIC agreed to offer a loan of Rs 75
lacs and which was agreed to by PDPL. The loan was secured by
mortgage by deposit of title deeds of PDPL’s share in the proposed
construction as well as of another property belonging to the
IA9074.05inCS(OS)864.94,IA9073/05inCS(OS)369/94&RA28/05inCS113/95 Page 2 of 12
defendants 3 and 4 in CS(OS)864/1994. The defendants 2 and 3 in
the said suit also furnished their personal guarantees for repayment
of the loan. LIC advanced an amount of Rs 25 lacs to PDPL on 20 th
July, 1992. On 27th November, 1992 LIC paid Rs. 24 lacs to PDPL as
second instalment of loan. LIC alleged default by PDPL in payment
of interest and repayment of loan and on 20th January, 1994 sent a
legal notice claiming Rs 57 lacs to be due from PDPL. PDPL,
however, instead of paying the dues of LIC, filed CS(OS) 369/1994
in this court for declaration that the covenant of payment of interest
at the rates as appearing in the agreement signed with LIC was
illegal, invalid, void and unenforceable and for direction to LIC to
prepare PDPL’s loan account in accordance with LIC’s offers,
representations and schemes then prevalent and for mandatory
injunction for directing LIC to release the balance amount of the
sanctioned loan and for a further declaration that PDPL was entitled
to waiver / relief as to interest on the loan amount. LIC filed CS(OS)
864/1994 under Order 34 Rule 4 of the CPC seeking decree for
recovery of Rs 59,11,638/- with interest and costs and for sale of the
mortgaged property etc. PDPL and the defendants 2 to 4 in
CS(OS)864/1994 contested the said suit, inter alia, on the ground
that LIC ought to have disbursed the entire loan of Rs 75 lacs
immediately after sanction and non-disbursement of this loan had
caused tremendous loss to PDPL and the defendants 2 to 4 (supra);
that unnecessary deductions were made from the first two
instalments of the loan disbursed; that PDPL had suffered
tremendous loss because of inaction or arbitrary action on the part
of LIC and in which regard CS(OS)369/1994 had already been filed.
PDPL filed CS(OS)113/1995 for recovery of Rs. 45 lacs on account
of damages and mesne profits.
IA9074.05inCS(OS)864.94,IA9073/05inCS(OS)369/94&RA28/05inCS113/95 Page 3 of 12
3. All the three suits were decided vide common judgment
dated 29th September, 2005 (supra) and whereby a decree in terms
of Order 34 Rule 4 was passed in favour of LIC. The defendants 1 to
4 in CS(OS)864/1994 were also injuncted from parting with
possession of the mortgaged property.
4. The grounds of review in each of the three applications are
identical. Firstly, it is stated that the judgment notices and answers
the issues framed in CS(OS)864/1994 only and does not deal with or
answers of the issues framed in the other two suits. On the basis of
Smt Satya Devi v Rati Ram 85(2000) DLT 17 (DB), M/s Fomento
Resorts and Hotels Ltd v Gustavo Ranato Da Cruz Pinto AIR
1985 SC 736, Om Prakash v State of Himanchal Pradesh AIR
2001 Himanchal Pradesh 18, M/s Thungabhadra Industries Ltd v
The Govt of Andhra Pradesh AIR 1964 SC 1372, Naresh Ch. Deb
Barma v Sri Gopal Chandra Banerjee AIR 1994 Gauhati 37 and
Moran Mar Basselios Catholicos v Most Rev Mar Poulose
Athanasius AIR 1954 SC 526, it is argued that it is incumbent upon
the court to pronounce judgment on all the issues and non-answering
/ non-adjudication of the issues in CS(OS)369/1994 and CS(OS)
113/1995 is an error apparent on the face of the record and the
judgment therefore is liable to be reviewed.
5. Secondly, it is urged that during the hearing on 5th July, 2005,
a question, which fell for adjudication, was formulated and which
also remained to be answered/adjudicated in the judgment. It was
argued that though the said question is not recorded in the
proceedings of 5th July, 2005 but the formulation of the said question
IA9074.05inCS(OS)864.94,IA9073/05inCS(OS)369/94&RA28/05inCS113/95 Page 4 of 12
stands admitted in the reply of LIC to the review applications and the
adjudication of the said question is relevant for the judgment in the
three suits.
6. Thirdly, review is sought on the ground that the presence of
the counsels for the parties is not correctly recorded in the
judgment. The counsels appearing for LIC are shown as the counsel
appearing for PDPL and vise-a-versa.
7. Order 14 Rule 2 of the CPC provides that notwithstanding that
a case may be disposed of on a preliminary issue, the court shall
pronounce judgment on all issues. In view of the said mandatory
provision of law and the judgments aforesaid cited by the senior
counsel for the PDPL, there can be no dispute with the proposition
that a judgment which fails to pronounce on each and every issue
framed would suffer from material irregularity and would be no
judgment. The Apex Court in Moran Mar Basselios Catholicos
(supra) has also held where the judgment did not deal with and
determine an important issue in the case, it would be an error
apparent on the face of the record within the meaning of Order 47
Rule 1 of the CPC. Thus, the contention of the senior counsel for the
PDPL as a pure proposition of law has to be accepted.
8. However, the aforesaid provisions of Order 14 Rule 2 have to
be read harmoniously with Order 20 Rule 5 which while reiterating
the provisions of Order 14 Rule 2 further provides as under:
“5. Court to state its decision on each issue –
In suits in which issues have been framed, the court
shall state its findings or decision, with the reasons
therefor, upon each separate issue, unless the
finding upon any one or more of the issue is
sufficient for the decision of the suit.”
IA9074.05inCS(OS)864.94,IA9073/05inCS(OS)369/94&RA28/05inCS113/95 Page 5 of 12
9. Thus, though non-adjudication/non consideration of any issue
would be a ground for review but not, if finding upon anyone or more
of the issues is sufficient for the decision of the suit. I find that the
Apex Court also reiterated the same principle in Narne Rama
Murthy v Ravula Somasundaram & Ors 2005 (6) SCC 614 as
under:
“7. We also see no substance in the submission of Mr
Ramachandran that there is no finding on issue No.1.
In our view, once the finding was reached on issue
No.5 the answer to issue No.1 followed. Even
otherwise, both these issues have been dealt with
together and the reasoning given by the trial court for
answering these two issues in favour of the
respondents applies to both these issues.
8. In view of the above, we see no infirmity in the
impugned judgment. We see no reason to interfere.
The special leave petitions stand dismissed with no
order as to costs.”
10. The pleas aforesaid of PDPL for review have thus to be
considered in the light of the law as aforesaid. A reading of the
judgment sought to be reviewed does not show as if this court while
pronouncing the judgment was oblivious of the two suits other than
CS(OS)864/1994. It is recorded in para 10 of the judgment that
defence of PDPL in CS(OS)864/1994 was, in fact, the main
relief claimed by PDPL in CS(OS)369/1994. In para 11 of the
judgment, the submission of PDPL to the effect that CS(OS)864/1994
be dismissed and CS(OS)369/1994 and CS(OS)113/1995 be decreed
is noticed. In para 12 of the judgment, it is recorded that on 4 th
December, 1995 the three suits were ordered to be consolidated
“and issues in all the three suits were commonly framed.” The
applications for review do not allege the said statement in para 12 of
the judgment to be erroneous and not in accordance with record.
Once it is the admitted position that “issues in all the three suits
were commonly framed”, the non-mentioning of the issues framed in
IA9074.05inCS(OS)864.94,IA9073/05inCS(OS)369/94&RA28/05inCS113/95 Page 6 of 12
CS(OS) 369/1994 and CS(OS) 113/1995 in the judgment or non
dealing with the same expressly, cannot be an error apparent on the
face of the record and no ground for review.
11. This court again in para 13 of the judgment noted “however,
the basic and pertinent question which would help in
answering the issues arising in all the three cases is whether
the ………”. This court in the judgment has held the question arising
for decision in all the suits to be as to whether LIC was obliged to
disburse the entire loan of Rs 75 lacs in a lump sum and whether full
disbursement of the loan was a condition precedent for creating a
liability upon PDPL and others to repay the loan with interest only
after two years of rest period was over from the date of such
disbursement. The said question was answered in favour of the LIC
and against PDPL. Again in para 25 of the judgment, this court
observed that the “principle in issue in all the three suits, as the
suits had been consolidated and common issues were framed
in them” was answered by the findings returned in the earlier
paragraphs. This court in para 37 of the judgment negated the
contention of the PDPL that the loan was repayable only after the
lapse of a period of two years and found the same to be in complete
contradiction to the written contract between the parties. In para 40
of the judgment this court found that the LIC had not committed any
breach of the terms of the agreement between the parties and the
breach was on the part of PDPL and the defendants 2 to 4 in
CS(OS)864/1994.
12. Undoubtedly, on 4th December, 1995 itself when issues were
framed in CS(OS)864/1994 observing that issues in all the three suits
were common and they can be tried together, issues were separately
IA9074.05inCS(OS)864.94,IA9073/05inCS(OS)369/94&RA28/05inCS113/95 Page 7 of 12
framed in CS(OS)369/1994 and CS(OS)113/1995. However, the
proceedings recorded in CS(OS) 369/1994 and CS(OS)113/1995
thereafter show that the files of the said two suits were being taken
up as connected to CS(OS)864/1994. The witnesses were also
examined once only and not separately in the three suits. It is not
under challenge that the arguments were heard together.
13. The Senior counsel for PDPL has urged that issues 3 to 5 and 7
to 10 framed in CS(OS)369/1994 and issues 3, 5 and 7 to 10 framed
in CS(OS)113/1995 have not been answered. He admits that the
other issues framed in the said two suits stand answered in the light
of the findings in CS(OS)864/1994. For convenience the issues
urged to be remaining unanswered in the aforesaid two suits are set
out herein below:
CS(OS)369/94
“3. Whether the agreement dated 18th March, 1992 is void
for the reasons stated in the plaint? If so, to what
effect?
4. Whether the loan has not been released by the
defendant in accordance with the contract agreed
upon between the parties and of the scheme? If so, to
what effect?
5. Whether the defendant was obliged to release the loan
in accordance with the scheme for Reconstruction
Finance to Building & Development. If so, to what
effect?
7. Whether the plaintiff has played a fraud by filing the
suit as alleged in para no.1 of preliminary objection?
8. Whether the suit is barred by the provisions of Specific
Relief Act?
9. Whether the suit has not been properly valued for
purpose of court fee and jurisdiction?
10. To what relief, if any, is the plaintiff entitled?”
IA9074.05inCS(OS)864.94,IA9073/05inCS(OS)369/94&RA28/05inCS113/95 Page 8 of 12
CS(OS) 113/2005
“3. Whether the agreement dated 18th March, 1992 is void
for the reasons stated in the plaint? If so, to what effect?
5. Whether the defendant was obliged to release the loan in
accordance with the scheme for Reconstruction Finance
to Building& Development. If so, to what effect?
7. Whether the plaintiff has played a fraud by filing the suit
as alleged in para No.1 of preliminary objection?
8. Whether the suit is barred under Order 2 Rule 2?
9. Whether the plaintiff has suffered any damage on
account of any act of the defendant? If so, to what
effect?
10. To what amount, if any, is the plaintiff entitled.”
14. However, a bare perusal of the aforesaid issues would show
that the findings in the judgment are sufficient for the purposes of
the decision of the said issues also. It cannot be lost sight of that in
order dated 4th December, 1995, in CS(OS)864/1994 it is recorded
that issues in all the three suits are common. That being the
position, there is no error apparent on the face of the record in the
judgment answering the common issues as framed in
CS(OS)864/1994 only. Even otherwise the issues are found to be
overlapping and pleadings the same. Once a finding has been given
on the pleadings, PDPL cannot be heard to say that an issue framed
using a different language though having the same effect, ought to
have been answered separately. It may be noticed that the issues 7
to 9 in CS(OS)369/1994 which are alleged to have remained
unanswered were the defence of LIC to that suit. The effect of the
judgment is that CS(OS)369/1994 has been dismissed. Similarly, the
loan agreement was claimed by PDPL to be void while denying its
liability in CS(OS)864/1994 and thus issues 3 to 5 in
IA9074.05inCS(OS)864.94,IA9073/05inCS(OS)369/94&RA28/05inCS113/95 Page 9 of 12
CS(OS)369/1994 are squarely covered by the findings returned in
the judgment. Similarly, the issues 7 to 9 in CS(OS)113/1995 are the
defence of LIC to that suit and which defence has succeeded
inasmuch as the effect of the judgment is dismissal of
CS(OS)113/1995. The issues 3 and 5 therein have been expressly
answered in the judgment. The judgment having not found LIC to be
in breach, the question of PDPL being entitled to any amount under
Issue No.10 therein did not arise. I thus find the proviso to Rule 5 of
Order 20 to be squarely applicable to the present case and do not
find any error apparent on the face of the record on this ground.
15. As far as the second ground of review is sought, there is
nothing on the record to suggest that during the hearing the
question as alleged was formulated. Thus, there can be no error
apparent on the face of the record. Even otherwise during the
course of hearing several propositions are exchanged and there is no
requirement to deal with each one of them. Even otherwise, the
propositions allegedly framed, even if believed to have been framed,
also stand answered in the judgment. The judgment has found that
there was no obligation of LIC to release the entire agreed loan
amount of Rs 75 lacs in a lump sum and the monetary claim of LIC to
be in accordance with the agreement and thus there was no need for
the court to contemplate on the schedule of repayment applicable if
the agreement had been otherwise. The judgment is thus not
reviewable on the second ground urged also.
16. As far as the third ground of review urged is concerned,
strictly speaking the same is not a ground for review but falls within
the ambit of clerical error or accidental slip or omission within the
meaning of Section 152 of the CPC and the presence of the counsels
IA9074.05inCS(OS)864.94,IA9073/05inCS(OS)369/94&RA28/05inCS113/95 Page 10 of 12
for the parties in the judgment is ordered to be corrected in exercise
of powers under the said provisions.
17. The three applications therefore are found to be meritless and
are dismissed with consolidated costs of Rs 50,000/- recoverable by
the judgment debtor as part of the decretal amount.
18. As far as the execution is concerned, it was the contention of
the senior counsel for PDPL that without the final decree being
drawn up, there could be no execution. The judgment debtors 1 to 4
have filed EA.No.299/2008 in the said execution seeking stay thereof
owing to the pendency of the review and also on the ground that
they had not received any indication from the decree holder LIC on
their OTS proposal. Under Order 34 Rule 4, upon the plaintiff
succeeding in a suit for sale of mortgaged property, the preliminary
decree follows directing that in default of the defendant paying the
amount as mentioned therein the plaintiff shall be entitled to apply
for a final decree directing that the mortgaged property be sold and
the proceeds of the same be applied in payment of what has been
found due. The execution application of LIC is treated as an
application for sale, on default by the judgment debtors to pay the
amounts found due and a final decree for sale of the mortgaged
property is passed and the sale proceeds are ordered to be deposited
in the court and applied for payment of the amounts found due
including of the costs awarded while dismissing the applications for
review. It is deemed expedient to appoint an officer of LIC only for
the purposes of conducting the said sale. The LIC / decree holder to,
within four weeks, furnish to the court the name of its officer who
would conduct the sale of the property. In the circumstances
EA.No.299/2008 is dismissed.
IA9074.05inCS(OS)864.94,IA9073/05inCS(OS)369/94&RA28/05inCS113/95 Page 11 of 12
List before the Registrar General of this court for complying
with the further formalities /finalization of terms of sale/auction on –
18th December, 2008.
RAJIV SAHAI ENDLAW
(JUDGE)
November 20, 2008
M
IA9074.05inCS(OS)864.94,IA9073/05inCS(OS)369/94&RA28/05inCS113/95 Page 12 of 12