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Delhi High Court
Praveen Jain And Anr. vs Lakshmi Narain Gupta on 28 August, 2000
Equivalent citations: 2000 (55) DRJ 117
Author: V Sen
Bench: V Sen


JUDGMENT

Vikramajit Sen, J.

1. Shri Praveen Jain and his mother Smt. Madhuri Jain are Plaintiffs in S. No. 1485/1997. Shri Ashok Jain brother of Shri Praveen Jain and son of Smt. Madhuri Jain is the Plaintiff in S. No. 1486/1997. The former suit relates to the first floor and the letter to the second floor of B-7, Extension/116-A, Safdarjung Enclave, New Delhi. The averments in both the Plaints, as well as the defense thereto, are identical in substance and material particular. For these reasons the interlocutory applications filed in both the suits can conveniently and appropriately be disposed of by this common order. An original of this Order shall, therefore, be placed in S. No. 1486/1996.

2. The Plaintiffs have filed the present suit for stated to have been paid to the Defendant under the Agreement to sell dated 25-9-1996 and only Rs. 20,00,000/- had been paid by Mr. Ashok Jain to the Defendant on the execution of the Agreement dated 5-8-1996. The Defendant has thereafter denied that the balance sale consideration of the First Floor is Rs. 21,00,000/- and has reiterated that the total consideration for the sale of the First and Second Floor was Rs. 1,11,00,000/- (Rs. One Crore eleven lakhs only) in terms of the Agreement to Sell dated 5-8-1996. It is asserted that the First Floor is almost one and half times of the built up areas of the Second Floor and that their price cannot, therefore, be equal. The value of the suit has been challenged. Rs. 55,00,000/- (Rs. Fifty Five lakhs only) as stated in para 5 of the Plaint in Suit No. 1485/1997. The property is stated to be freehold. It is averred by the Plaintiff that “the Defendant insisted from the above amount a sum of Rs. 30,00,000/- (Rs. Thirty lakhs only) be paid in cash and the rest Rs. 25,00,000/- (Rs. Twenty five lakhs only) was to be paid by cheque or draft.” It is further averred that the Second Floor was purchased by Mr. Ashok Jain, brother of the first Plaintiff for a sum of Rs. 55,00,000/- (Rs. Fifty Five lakhs only), (it will be recalled that Mr. Ashok Jain has filed a similar suit for Specific Performance, bearing S. No. 1486/1997). It is then averred that in the month of August, 1996 an advance of Rs. 4,00,000/- (Rs. Four lakhs only) be cheque and Rs. 9,00,0000(Rs. Nine lakhs only) in cash was paid. Shri Ashok Jain has averred that in the second week of September, 1996, he paid a sum of Rs. 30,00,000/-(Rs. Thirty lakhs only) in cash as demanded by the Defendant for the Second Floor. It is then alleged that the Plaintiff paid a sum of Rs. 21,00,000/- (Rs. Twenty one lakhs only) in cash and wanted the Sale Deed to be registered as the earliest. The Agreement to Sell dated 25-9-1996 is stated to have been entered into, for a total consideration of Rs. 25,00,000/-(Rs. Twenty five lakhs only) and part consideration of Rs. 4,00,000/- (Rs. Four lakhs only) was received by the Defendant from the Plaintiffs. The Agreement to Sell mentions that the actual physical possession of the suit property was handed over to the Plaintiffs, and within seven days of obtaining necessary Clearance certificate/Commission the Plaintiffs were to pay the rest of the money, and on the failure to do so they would be liable to pay interest at the rate of 24% per annum. It is further alleged that the Defendant told the Plaintiffs that he would take away all the things he had on the First Floor within a few days after which the Plaintiffs could shift their articles but since the Second Floor was empty he would hand over the keys immediately. Accordingly, the Defendant handed over the possession with regard to the Second Floor to the brother Mr. Ashok Jain, (the Plaintiff in S. No. 1486/1997). The Defendant intimated the Plaintiffs that within a couple of weeks the First Floor could also be taken possession of. It is thereafter stated that in October 1996 the plaintiffs contacted the Defendant in Bombay and on their request the Defendant asked them to take the keys of the First Floor from Shri Ashok Jain. The Plaintiffs, accordingly, took actual possession of the suit property to get their work done and have remained in uninterrupted possession of the same. After one previous reminder, in June 1997 the Plaintiffs again met the Defendant and were surprised to learn that no steps have been taken for getting the requisite Income Tax Clearance Certificate. Thereafter, in last week of June, 1997 the Defendant threatened Plaint ill No. 2 with dispossession, because of which a temporary injunction was obtained by them on 4-7-1997. By Registered notice dated 3-7-1997 the Plaintiffs called upon the Defendant to accept the rest, of the sale consideration and register the Sale Deed and when this was not done the present suit was filed. The balance sale, consideration of Rs. 21,00,000/- (Rs. Twenty one lakhs only) was ready to be paid. The suit has been valued at Rs. 25,00,000/-.

3. Before proceeding to consider the averments in the Written Statement, I am constrained to mention that the drafting of the plaints, at least in the narration of events alleged to have taken place, is not in sequence. It is either not drafted with due care, or with a view to cause confusion. To illustrate, the Plaintiffs have mentioned different sale considerations, and have first stated the execution of Agreements to Sell in September 1996, and thereafter have abruptly mentioned a previous agreement and payments made against it.

4. In his written statement the Defendant has contended that the Agreement dated 25-9-1996 was created for the specific purpose of providing it to the Income Tax Authorities at the request of Mr. Ashok Jain. It is asserted that there has been a suppression of material fact inasmuch as an Agreement dated 5th August, 1996 was executed between the defendant and Mr. Ashok Jain. It is alleged that page 5 of the Agreement dated 25-9-1996 has been changed and the initials of the Defendant thereon have been forged. On this page, paragraph 2 regarding the actual vacant physical possession of the First Floor was cancelled and scored off by the Defendant as no actual vacant physical possession was given to the Plaintiffs. Similar changes had been made on pages 6,7 and 8. It is further asserted that the Plaintiffs in Suit No. 1485/97 and the defendant have never met and that there was an agreement between the Defendant and Mr. Ashok Jain only. It is stated that the Plaintiffs were never in possession of the First Floor and therefore it is contended that an incorrect Site Plan had been filed in the Lower Court. If the Plaintiffs were actually in possession of the property in suit, the incorrect Site Plan would not have been filed. Or in the alternative, the filing of an incorrect site Plan shows that the Plaintiffs were never in possession. It is pleaded that the Plaintiffs have trespassed into the First Floor, which was always in the possession of the Defendant. It is further averred in the Written Statement that Mr. Ashok Jain had represented to the Defendant that since a sum of Rs. 20,00,000/- had been paid under the Agreement dated 5-8-1996 in respect of the Second Floor, and since he needed this place for himself and his children, possession be given to him temporarily, and if he failed to execute the Sale Deed he would hand back the possession of the Second Floor to the Defendant. Acting on his representation and promises, the Defendant in good faith executed a Possession Receipt dated 25-9-1996 in respect of the Second Floor. Thereafter, despite the Defendant’s numerous reminders, Shri Ashok Jain failed to pay the balance sale consideration in terms of the Agreement dated 5-8-1996 and failed to execute the Sale Deed in respect of the First and Second Floor of the property. In the course of his visit to New Delhi in the first week of June, 1997 the Defendant personally discussed the matter with Mr. Ashok Jain and requested him to completed the transaction, Mr. Ashok Kumar Jain not only failed to complete the transaction but also threatened the Defendant. In these circumstances a Legal Notice dated 28-6-1997 was issued. The Defendant further states that on 9-7-1997 he received a call from his brother, the owner in possession of the Ground Floor, that Mr. Ashok Kumar Jain is trying to take illegal and unlawful and forcible possession of the First Floor by making an unlawful and illegal entry into the premises. The Defendant reached Delhi on 10th July, 1997 and found the main Godrej Lock had been tempered with, and the family members of the Plaintiff had unlawfully entered into the First Floor premises. A Police Complaint was filed by the defendant immediately. It is next averred in the Written Statement that the statement to the effect that an advance payment of Rs. 4,00,000/- by cheque and Rs. 9,00,000/- in cash are false because it is the Plaintiff’s case that the Agreement to Sell was made on 25-9-1996. It is denied that the Defendant ever demanded that the rest of the sale consideration be given to him in cash or that a sum of Rs. 30,00,000/- was paid to him by the brother of Mr. Ashok Jain namely Mr. Praveen Jain, Plaintiff No. 1 in S. No. 1485/1997. Receipt of the payment of a sum of Rs. 21,00,000/- in cash is denied and it is reiterated that the only sum paid was along with the payment dated 5-8-1996, against receipt. It is pleaded in Suit No. 1485/97 that “as the amount of Rs. 20,00,000/- was paid by Mr. Ashok Jain along with the Agreement dated 5-8-1996, and as he wanted the possession of the Second Floor and promised that balance will be paid within thirty days as agreed, the Possession Receipt was given to him at Bombay on 25-9-1996. “It is reiterated that the Defendant has never met Shri Praveen-Jain or Mrs. Madhuri Jain (brother and mother respectively of Mr. Ashok Jain, who is the Plaintiff in S. No. 1486/1996). It is submitted that the Defendant on compassionate and humanitarian grounds was tricked by Mr. Ashok Jain to obtain the possession receipt for the Second Floor and the Defendant gave the possession receipt of the Second Floor in good faith as the value of the Second Floor at the relevant time was around Rs. 31,00,000/- and Shri Ashok Jain had paid a sum of Rs. 20,00,000/- and promised to pay balance as agreed by Agreement dated 5-8-1996. However, as substantial payment was to be received in relation to the First Floor and the Second Floor, the defendant flatly refused to issue any possession receipt for the First Floor. It is therefore, claimed, that possession of only Second Floor was given and hot of the First Floor as is now made out by the Plaintiff. In respect of the alleged Agreement dated 25-9-1996, the Defendant had pleaded that this Agreement was signed by him in Bombay at 11-0 Clock in the night when only Mr. Ashok Jain was present. The consideration of Rs. 4,00,000/- shown in this Agreement dated 25-9-1996 is in fact, consideration paid by Mr. Ashok Jain on 5-8-1996 vide drafts of the same date. It is asserted that “it was the Defendant who has been asking Mr. Ashok Jain for registering the Sale Deed and pay the balance amount of Rs. 91,00,000/- (Ninety One lakhs only) which is the balance consideration as he has actually paid Rs. 20,00,000/- in terms of the Agreement dated 5-8-1996. “It is further averred that the Plaintiff filed suit before the Civil Judge, Tis Hazari, Delhi in the course of which injunction orders dated 4th July, 1997 came to be passed. These suits were subsequently withdrawn. The averments in those plaints are completely contrary to the present which has been filed after taking into account the issues raised by the Defendant in his Written Statement in those proceedings. No money is stated to have been paid to the Defendant under the Agreement to Sell dated 25-9-1996 and only Rs. 20,00,000/- had been paid by Mr. Ashok Jain to the defendant on the execution of the Agreement dated 5-8-1996. The Defendant has thereafter denied that the balance sale consideration of the First Floor is Rs. 21,00,000/- and has reiterated that the total consideration for the sale of the First and Second Floor was Rs. 1,11,00,000/-(Rs. One Crore eleven lakhs only) in terms of the Agreement to Sell dated 5-8-1996. It is asserted that the First Floor is almost one and half times of the built up areas of the Second Floor and that their price cannot, therefore, be equal. The value of the suit has been challenged.

5. It is in these circumstances narrated above that the Court has to decided whether the version of the events, as narrated by the Plaintiffs to be believed or not. At this stage of the proceedings, indubitably, only a prima facie view is to be taken, predicated on the pleadings in these suits as well as the previous ones filed in the District Courts, and after giving due weightage to the documents on record. The significance of the
variance in the pleadings of the Plaintiffs cannot be overstated. In the first salvo of litigation, before the Civil Judge, Tis Hazari, in the Plaint filed in July, 1997, the Plain tiff has not been mentioned, even fleetingly, of the execution of the first document, namely, the Agreement to Sell between Shri Ashok Jain and the Defendant for both the First and Second Floor of the suit property. Reference is made only to an Agreement dated 16-9-1996, which is not relied upon in these proceedings. After narrating the manner and extent of the title of the Defendant (which is not in dispute in either of the suits) this is what pleaded in respect of the alleged transaction between the parties in those proceedings.

“That the Defendant entered into an agreement to sell with the Plaintiff on 16-9-1996 and agreed to transfer 1st Floor and mezzanine on the Canopy between 1st floor and 2nd floor alongwith 25% undivided individual and impartial ownership right in the free-hold land underneath, measuring 269.10 sq. mts. bearing plot No. B-7, Extension 116-A situated at Safdarjang Enclave, New Delhi for a total sale consideration of Rs. 25 lakhs (Rs. 25,00,000/- and at that time) plaintiffs paid a sum of Rs. 4,00,000/-(Rupees four lakhs) by means of demand drafts to the defendant and the defendant handed over the vacant and peaceful possession to the Plaintiffs on receipt of balance amount of Rs. 21,00,000/- (Rupees twenty one lakhs only).

6. That the defendant has to apply for Income lax Clearance certificate under Section 230-A of the I.T.Acl, 1961 but so far to the knowledge of the plaintiffs, the defendant has not applied for income-tax clearance certificate to the concerned authorities.

7. That the plaintiff had been with-holding to balance payment since there and are always ready and willing and are still ready and willing to perform their part of the contract but the defendant is lingering the matter on one pretext or the other.

8. That recently the defendant have come to Delhi and stayed with his brother on the ground door for few days. In the last week of June’ 97 the defendant threatened to dispossess the plaintiff from the 1st floor and mezzanine on the canopy between the 1st and 2nd floor property bearing No. B-7/116-A, Extension, Safdarjung Enclave, New Delhi.

9. In his Written Statement filed in the Court of Shri M.R. Sethi, Civil Judge, Delhi, the Defendant has categorically denied execution of any agreement on 16-9-1996. He has pleaded the existence of an Agreement dated 5-8-1996 with Shri Ashok Jain as also the circumstances in which the alleged Agreement dated 25-9-1996 came about. As already noticed, this litigation has been withdrawn by the Plaintiffs. Significantly,
there is no mention at all of any Agreement dated 16-9-1996 in any of the pleading in the High Court.

10. It has become common-place for parties to enter into Agreements to Sell for a particular consideration. Thereafter on the payment of further sums in cash, fresh Agreements to Sell for a lesser consideration are executed, after taking into account the cash component received. The intention of the parties is to circumvent the provisions of the Income-Tax Act, which have been inserted with the specific intent of combating the scourge of ‘black money’ which is endemic in our economy. Where such parties fall out, it is not open to or expected of a Court to countenance these transaction. Mindful of this pernicious practice I have looked at the existence of the First Agreement to Sell dated 5-8-1996 with Shri Ashok Jain, in respect of First and Second Floors, and the next set of Agreements to Sell in favour of Shri Ashok Jain in respect of Second Floor and Shri Praveen Jain and their mother, in respect of First Floor without giving any judicial imprimatur to the practice. It is also the obligation of the Court to ensure that fiscal measures are not emasculated or circumvented by parties acting in pari delicto, or otherwise. The fact that the plaintiffs have failed to mention the first Agreement to Sell in the plaints first filed in the District Court, and have glossed over and mentioned it in the plaints before this Court, is of great significance. It was a heavy burden on them to satisfactorily explain all the circumstances which occasioned or necessitated the execution of these two sets of Agreements to Sell, at different period of time and place. If they have chosen to follow a illegal path, they must suffer all the attendant consequence.

11. Perusing the two sets of Agreement to Sell dated 25th September, 1996 purely with a view to see whether this document reflected the compact between the parties, I find that certain paragraphs and/or portions thereof, even in the alleged Agreement to Sell in favour of Shri Ashok Kumar Jain [in respect of which there is no controversy revolving around the Possession), contain cancellations/scoring-out. Cancellations/scoring out also exist in the alleged Agreement to Sell of the same date in favour of Shri Praveen Jain and their mother Smt. Madhuri Jain in the other Agreement to Sell pertaining to the First Floor. There is a serious dispute between the parties and it
is within the realm of possibility that in regard to the second Agreement to Sell, the Defendant had scored out portions of this document. When these two sets, of documents are perused in juxtaposition, prima facie I am of the view that cancellation of both documents had taken place in Bombay as has been stated by the Defendant. It is also relevant that the Stamp Paper has been purchased in New Delhi and, therefore,
the Plaintiffs’ stand that these documents were prepared on the Defendant’s initiative seems to be incorrect. The preponderance of possibility is that these documents were drafted/prepared by the Plaintiffs, and were taken to the Defendant in Bombay and he made corrections/deletions as pleaded by him. If is not in dispute that the so-called execution of the second set of Agreements to Sell is in Bombay and not in New Delhi.

Since the documents relied upon by the Plaintiffs, therefore, do not indicate that there was a completed or concluded contract arrived at between them on 25.9.96, no effect can be given to them.

12. Secondly, failure to plead the existence of the Agreement to Sell dated 5.8.1996, as also the two Agreements to Sell dated 25.9.1996, in the suits filed in the District Court is a material suppression which is sufficient, in my thinking, to disentitle the Plaintiffs from the grant of the temporary injunction prayed for by them. Further more, failure to plead and/or explain in this Court, the Agreement dated 16.9.1996 pleaded in the suit tiled in the District Court, is also sufficiently significant to justify the declining of the temporary injunction prayed for. The Plaintiffs have been shifting stands and stories far to frequently to enthuse respect and/or credibility.

13. Thirdly, it is the Plaintiffs’ case that sums of Rs. 21,08,000/- and Rs. 30,00,000/- had been paid to the Defendant, but no receipt was given/obtained. The Court cannot countenance such a plea and it can hardly be expected of any person to pay such large sums of money in case without obtaining any receipt.

14. Fourthly, the parties have submitted the existence of and correctness of the statement made in the Agreement to Sell dated 5.8.1996 that the sale consideration for the First and Second Floor was for a sum of Rs. 1,11,00,000/-. No explanation is forthcoming on the important question as to why the second Agreements to Sell equally apportioned the sale consideration of the First and Second Floors when the market value could only have been totally disparate. Remarkably, the Sale consideration is below Rupees Fifty lakhs. These Agreements, it appears to me, may have been contemplated in order to circumvent the obtainment of permission from the Competent Authority but I cannot give this possibility any jural consideration.. In any event, no pleadings exist.

15. Fifthly, in the legal notice issued by Shri U.K. Chaudhary, Advocate for the Defendant, his version of the events as they transpired, were spelled out in detail. It appears that a legal notice dated 3rd July, 1997 has also been issued by Shri Maneshwar Tyagi, Advocate. From a perusal of the receipt filed along with the notice, it is evident that this notice was despatched on 5.7.1997. Although, the Defendant’s legal notice contained numerous details, this notice has not been traversed although, although as mentioned above, it is evident from the Postmaster’s certificate that this notice was delivered on 2.7.1997. Both sets of Plaintiffs, who are very closely related to each other and claim to have contracted similar interests in the suit property and have made similar averments before this Court, had already been served with the Defendant’s notice before their legal notice was issued and the suits were filed in the District Courts. It is definitely to be expected that they should have explicitly and specifically controverted the Defendant’s stand. Very recently, in the case entitled L.C. Goyal v. Suraj Joshi, 1999 Rajdhani Law Reporter (SC) 258 it has been observed by the Apex Court that if the statements contained in a legal notice are not controverted or replied to, this would be “a relevant consideration”. Since the Plaintiffs had prayed for an injunction in the District Courts, they were duty bound to disclose all material facts to the Court. This would necessarily have included the factum of the receipt of the notice and the Plaintiffs answer to the case set out by the Defendant in this notice. Neither has been done. The effort on their part was obviously to overreach and mislead the Trial Court to believe that the first grievance in respect of the suit property had been ventilated by the Plaintiffs. I have little doubt that this factors must have weighed heavily in the mind of the Additional District Judge when dealing with the application for temporary injunction.

16. Sixthly, I also accept the arguments of Learned Counsel for the Defendant that, had the Plaintiffs in Suit No. 1485/97 been in possession of the first floor when the first litigation was initiated, an incorrect site plan would not have been filed. The explanation that the plan was prepared in a hurry is far from satisfactory and is not plausible. If the Plaintiffs were actually in possession of the property in suit, an incorrect Site
plan would not have been filed. In the alternative, the filing of an incorrect Site Plan strongly indicates that the Plaintiffs were not in possession of the First Floor as has been stated by them in the two plaints. Prima facie, there is a strong likelihood that an injunction was received, and under its cover, the Plaintiffs trespassed into the first floor. A similar significance is the fact that it was the Defendant who made the first
police complaint. It can be reasonably expected that any person who is apprehensive of being forcibly dispossessed from properly within his legitimate possession would, have as the first step and reaction, lodged a complaint with the police and sought its protection.

17. The eighth reason which I have found relevant is that whilst no controversy existed regarding possession of the Second Floor with Mr. Ashok Jain, Plaintiff in S. No. 1486/1997, a Local Commissioner was asked for, whereas there was no similar prayer for appointment of a Local Commissioner in respect of the first floor. The possession of this floor was an extremely critical and contentions issue and it can be reasonably expected that a similar prayer or order would have been obtained by the Plaintiffs. I do not think that it is fanciful speculation that this was not so done because the Plaintiffs were not in possession of the First Floor at that stage.

18. Furthermore, in none of the pleadings of the Plaintiffs is there a categorical statement with the necessary precision and exactitude that must be expected in disputes of this nature, clarifying stating that exact date on which the Plaintiffs came into possession of the First Floor. The police, who have investigated the complaint, have highlighted this issue and have also opined that they did not find any renovation in the premises which would have taken nine months to complete. In fact, a perusal of the counter-affidavit filed by the police in Criminal Writ Petition No. 599/1997 shows that their findings were in favour of the Defendant.

19. Finally, a possession Letter was executed in respect of the Second Floor. It is wholly incredible that possession of the First Floor, pursuant to the alleged exchange of a very large sum of money in cash, was handed over without a similar possession letter. There is a bold and totally incredible statement that the Defendant told the Praveen Jain to collect the keys of the First Floor from Mr. Ashok Jain. How, why and when Mr. Ashok Jain was handed over these keys is conveniently left to everyone’s speculation.

20. Whatever may be the true facts surrounding the execution of the Agreement dated 5.8.1996 and the intention to execute the alleged Agreements dated 25.9.1996, there is no justification for the Plaintiffs having tress-passed into the first floor. Equitable relief cannot be granted to a party whose conduct is reproachable and who has taken law into his own hands. Prima facie, it appears that the Plaintiffs have, in collusion and in conspiracy, collusion and concert with each other, devised the strategy to take possession of the First Floor. Since they have adopted a similar stand, all of them have approached the Court with unclean hands. Therefore, whilst Shri Ashok Kumar Jain Plaintiff in S. No. 1486/97 may have come into possession of the second floor legitimately, he has also disentitled himself from the protection of the Court. After all, the only agreement to Sell between the parties which is not in dispute is that dated 5.8.1996, and this was between Mr. Ashok Jain and the Defendant. The Plaintiffs in Suit No. 1485/97 were not in the picture. The planning and execution of the tresspass, all throughout, in his. In this analysis, for a score of reasons the interim orders passed heretofore are vacated and the LA. No. 6180/97 in S. No. 1485/97 and LA, No. 6184/97 in S. No. 1486/97 are dismissed. Both the sets of Plaintiffs/applicants shall pay costs of Rs. 15,000/- each to the Defendant.

I.A. No. 8903/97 in S. No. 1485/1997

21. This application has been filed by the Defendant under Order XXXIX Rule 4 of the Code of Civil Procedure. I have already dismissed the applications in both suits filed by the Plaintiff for ad interim injunction under Order XXXIX Rules 1 and 2 with costs of Rs. 15,000/- each. This application automatically stands allowed by the dismissal of Plaintiffs applications. This is disposed of accordingly.

S. No. 1485/1997 and 1486/1997

22. Renotify the matter for further consideration on 20th October, 2000.


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