{"id":43802,"date":"1998-08-03T00:00:00","date_gmt":"1998-08-02T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ajmera-housing-corporation-vs-amrit-m-patel-dead-through-on-3-august-1998"},"modified":"2019-02-17T01:28:45","modified_gmt":"2019-02-16T19:58:45","slug":"ajmera-housing-corporation-vs-amrit-m-patel-dead-through-on-3-august-1998","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ajmera-housing-corporation-vs-amrit-m-patel-dead-through-on-3-august-1998","title":{"rendered":"Ajmera Housing Corporation vs Amrit M.Patel (Dead) Through … on 3 August, 1998"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Ajmera Housing Corporation vs Amrit M.Patel (Dead) Through … on 3 August, 1998<\/div>\n
Author: M J Rao.<\/div>\n
Bench: S.B. Majmudar, M. Jagannadha Rao.<\/div>\n
           PETITIONER:\nAJMERA HOUSING CORPORATION\n\n\tVs.\n\nRESPONDENT:\nAMRIT M.PATEL (DEAD) THROUGH L.RS. & OTHERS\n\nDATE OF JUDGMENT:\t03\/08\/1998\n\nBENCH:\nS.B. MAJMUDAR, M. JAGANNADHA RAO.\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
\t\t      J U D G M E N T
\nM. JAGANNADHA RAO. J.\n<\/p>\n
     Leave granted.\n<\/p>\n
     This is  an appeal\t against the judgment of the Gujarat
\nHigh Court  dated 2.3.1998  dismissing\tC.R.A.\tNo.  1342\/96
\nfiled under  section 115  of the code of Civil Procedure. By
\nthat judgment,\tthe order of the trial Court dated 1.8.1996,
\ndismissing an application filed by the appellant under Order
\n1 Rule\t10, section  146 and  Order 22\tRule 10\t C.P.C.\t for
\nimpleadment as a plaintiff in the suit was confirmed.\n<\/p>\n
     For the  purpose of  appreciating the  questions raised
\nbefore us, it is necessary to state the following facts:\n<\/p>\n
     The appellant  is a  third party to the Suit No.1761 of
\n1988  which   was  pending  before  the\t City  Civil  Judge,
\nAhmedabad. The\tsuit was  filed by  a builder,\tone Amrit M.
\nPatel, who was the predecessor-in-interest of respondents 1A
\nto 1C,\tagainst three defendants, viz (1) Arujn Bhai Jayanti
\nLal Parikh  (2) Nirmalaren  Arjunbhai Parikh  and (3) Irajit
\nArjunlal   Bhai\t   Parikh    (predecessors-in-interest\t  of
\nRespondents 2A\tto 4).\tThe relief  claimed was for specific
\nperformance of\tan agreement  dated 4.2.1982 executed by the
\nthree defendants  –  owners  of\t the  property\t(hereinafter
\ncalled the  ‘owners’) in  favour of the said Amrit Mohan Lal
\nPatel (plaintiff)  (hereinafter called\tthe ‘Builder’).\t The
\nsaid builder  was the sole proprietor of a firm called ‘Star
\nBuilders’.  The\t  plaintiff  entered   into  the  above-said
\nagreement with the defendants for the purpose of development
\nof  the\t defendants’  property\tby  construction  of  flats.
\nUltimately, after  the land was developed and the flats were
\nconstructed, the  owners and the builder were to join in the
\nSale deeds to be executed in favour of the purchasers of the
\nflats. Under  the agreement,  it was  also agreed  that\t the
\ndefendants-owners would get Rs.400\/- sq.ft. of built up area
\nas mentioned  in clause\t 15 of\tthe agreement.\tFurther, the
\nbuilder was to pay Rs. 3 lakhs on or before the execution of
\nthe agreement,\tRs. 21\tlakhs within  3 months\tfrom date of
\nagreement and  22 lakhs\t from the  date of payment of Rs. 21
\nlakhs. The  builder paid  Rs.  3  lakhs\t as  aforesaid\tand,
\naccording to  defendants, he committed default in payment of
\nRs. 21\tlakhs as  well as  of the  further amount  of Rs. 22
\nlakhs. simultaneously  with  the  above-said  agreement\t the
\nthree  owners  executed\t an  irrevocable  General  Power  of
\nAttorney dated 4.2.1982 in favour of the builder.\n<\/p>\n
     Six years\tlater, the plaintiff-builder entered into an
\nagreement dated 26.2.1988 with the appellant, Ajmera housing
\nCorporation (hereinafter  called the developer’) under which
\nthe appellant  was  to\tundertake  the\tdevelopment  of\t the
\nproperty.  On  the  same  day,\tthe  plaintiff\texecuted  an
\nirrevocable Power  of Attorney\tin favour  of the appellant.
\nThe points  that arise\tin the revision mainly turn upon the
\ninterpretation\tof  the\t clauses  in  this  agreement  dated
\n26.2.1988  by  the  builder  in\t favour\t of  the  appellant-
\ndeveloper.\n<\/p>\n
     On the  ground that the defendants-owners did not allow
\nthe plaintiff-builder  to develop  the property, the builder
\nfiled the  present suit on 8.4.1988 impleading the owners as
\ndefendants No.1\t to 3  and claiming  various  reliefs,\ti.e.
\nspecific  performance\tof  the\t agreement  dated  4.2.1982,
\ncertain injunctions in regard to the property and possession
\nof that\t part of the property which was in the possession of
\nthe owners.  An alternative prayer was also made for damages
\nin a  sum of  Rs.81 lakhs  against the\towners. Pending\t the
\nsuit, one  of the  owners Arjun Bhai Jayanti Lal Parikh died
\nand his legal representatives were brought on record.\n<\/p>\n
     After the\tfiling of the suit, the plaintiff – builder,
\nSri Amrit  Mohan Patel\tdied  on  18.4.1995  and  his  legal
\nrepresentatives were  also brought  on\trecord.\t During\t the
\npendency of  the suit,\ta deposit of Rs.21 lakhs was made by
\nthe plaintiff-builder into Court. There is a dispute between
\nthe plaintiff’s\t legal representatives\tand the\t appellant –
\ndeveloper in  regard to\t the said amount of Rs.21 lakhs. The
\nlegal representatives  of the plaintiff-builder contend that
\nthe said  amount of Rs.21 lakhs belongs to their father late
\nAmrit Mohan  Lal Patel\tand that  he had  deposited the said
\namount in  the Court  from his\tfunds. But the contention of
\nthe appellant-developer\t is that it was he who gave the said
\namount to  the builder\tfor such deposit. The said amount of
\nRs. 21\tlakhs was  invested by\tthe trial  Court in  a fixed
\ndeposit.\n<\/p>\n
     The present  proceedings arise in the following manner:
\nDuring the  pendency of\t the suit, the legal representatives
\nof the\tplaintiff filed\t Interlocutory application  (Ex.125)
\nseeking to  withdraw the  suit under Order 23 Rule 1 CPC and
\nin  that  application  they  naturally\timpleaded  only\t the
\nowners-defendants as  respondents. It  appears that the said
\nrespondents had no objection for the withdrawal of the suit.
\nIn the\tsaid suit,  the\t appellant  –  developer  filed\t the
\npresent application  (Ex.136) under Order 1 Rule 10, section
\n146 and\t Order 22 Rule 10 C.P.C. for being impleaded and for
\n“substituting” himself\tas  a  plaintiff  in  the  place  of
\ndeceased builder late Amrit Mohan Lal Patel, notwithstanding
\nthat the  legal representatives\t of the\t original  plaintiff
\nwere already  brought on  record and  they  had\t desired  to
\nwithdraw the  suit. The appellant claimed in his application
\nthat he\t was an “assignee” of the interest of the plaintiff-
\nbuilder in  view of  the agreement dated 26.2.88 executed by
\nthe plaintiff  in his  favour and  he, therefore,  wanted to
\ncontinue the  said suit\t for  specific\tperformance  of\t the
\nagreement dated 4.2.1982 against the owners.\n<\/p>\n
     The earned\t trial Judge  by his  order  dated  1.8.1996
\npermitted   withdrawal\t  of   the   suit   by\t the   legal
\nrepresentatives of  the plaintiff-builder  and rejected\t the
\napplication of the appellant-developer for being substituted
\nas a  plaintiff in  the\t suit.\tHe  initially  rejected\t the
\ncontention of  the defedants’  counsel, Sri  Vakil that\t the
\nplaintiff-builder could not have assigned his rights without
\nthe consent  of the  owners and\t also the further contention
\nfor the\t owners that  the agreement  dated 4.2.82  was based
\nupon the  special skill of Sri Amrit Mohal Lal Patel and was
\nof a  personal nature  and therefore  not assignable. Having
\nrejected the  above contention\tof  the\t owners,  the  trial
\nJudge, however,\t felt that  the language  of  the  agreement
\ndated 26.2.88  by the  builder in  favour of  the  developer
\nshowed that  under  the\t latter\t agreement  the\t development
\nrights were  merely “entrusted”\t to  the  developer  by\t the
\nbuilder and  that there\t was no\t “assignment” of  the rights
\nwhich the builder got under the first agreement of 4.2.82 in
\nfavour of  the\tdeveloper.  According  to  him,\t the  second
\nagreement dated\t 26.2.1988 was\tan independent\tagreement by
\nthe builder  in favour\tof the\tdeveloper. The learned Judge
\nrejected the  contention of  Sri Shelat\t on  behalf  of\t the
\nappellant-developer that section 146 of Order 22 Rules 9, 10
\nwere attracted\tto the\tfacts of  the case According to him,
\n‘entrustment’ of  development work  by the  builder  to\t the
\ndeveloper could\t not be\t equated with  ‘assignment’  of\t his
\nrights under  the earlier  contract. The  learned Judge also
\nheld that  in any  event, as it was not a case of assignment
\nof “all\t the rights” of the builder, the developer could not
\nbe treated as a assignee and, therefore, the appellant could
\nnot be\ttreated as  a legal  representative of\tthe deceased
\nplaintiff. The subsequent transaction dated 26.2.88 was only
\na ‘part’ of the transaction covered by the earlier agreement
\ndated 4.2.82. Further, the plaintiff could not be said to be
\na necessary  party to  the suit\t inasmuch as he did not have
\nany direct interest in the property. The developer was not a
\nparty to  the agreement\t dated 4.2.82 sought to be anforced.
\nThe Court  relied upon\tAnil Kumar Singh vs. Shivnath Mishra<\/a>
\n[1995 (3)  SCC 147]  where, in\tthe context  of Order 1 Rule
\n10(2) CPC and Order 22 Rule 10 it was held that a person who
\nclaimed to have subsequently acquired interest as a co-owner
\nwas neither  a necessary nor a proper party and could not be
\nimpleaded even\tas a  defendant. For  the above reasons, the
\napplication of\tthe plaintiff’s\t legal\trepresentatives\t for
\nwithdrawal of  the suit\t was allowed  and the application of
\nthe appellant  for being  substituted  as  a  plaintiff\t was
\ndismissed.\n<\/p>\n
     In the  revision filed  by the  appellant in  the\tHigh
\nCourt, it was held while dismissing the revision, that there
\nwas no\tclause in the agreement dated 26.2.88 which provided
\nor which  could be  construed as a transfer of rights by the
\nplaintiff in  favour of\t the appellant\twith respect  to the
\nsuit property.\tHence there  was no  “assignment”. The\tHigh
\nCourt,\thowever,  differed  from  the  trial  Court  on\t the
\nquestion as  to whether\t the plaintiff-builder\tcould assign
\nthe  benefits  or  liabilities\tunder  the  agreement  dated
\n4.2.1982 to  the  appellant,  without  the  consent  of\t the
\noriginal owners.  The court  held that\tsuch consent  of the
\nowners was  indeed necessary  for the  assignment. The court
\nheld that  the agreement  dated 26.2.88\t was an\t independent
\nagreement between  the builder\tand the\t developer.  It\t was
\ncontended in  the High\tCourt by the learned counsel for the
\nappellant that inasmuch as the appellant had deposited Rs.21
\nlakhs before  the trial\t Court (a contention disputed by the
\nplaintiff’s legal  representatives), the  said fact  coupled
\nwith the  execution of\tPower of  Attorney by the builder in
\nfavour\tof   the  developer   on  26.2.88   amounted  to  an
\n‘assignment’. This  contention was  also not accepted by the
\nHigh court.  The Court\theld that  neither Order 22 rule 10,
\nnor section  146 nor  Order 1  Rule 10 CPC applied. Order 22
\nRule 10\t did not  apply because\t there was no assignment and
\neven if there was one, it was not during the pendency of the
\nsuit but  before suit.\tAgain, Section\t146  did  not  apply
\nbecause there was no “assignment” and the purpose of section
\n146 was\t different. Order  1 Rule  10 did  not apply  as the
\nappellant was  a third\tparty to the agreement dated 4.2.82.
\nFor the above reasons, the revision was dismissed.\n<\/p>\n
     In this  appeal, the  learned senior  counsel  for\t the
\nappellant Sri  S.K. Dholakia  contended that  the  agreement
\ndated 26.2.88\tamounted  at least  to an  assignment of the
\n‘development’ rights  if not  of other rights of the builder
\nand that  was sufficient to bring the case under section 146
\nor Order 1 Rule 10 CPC. Learned counsel fairly conceded that
\nOrder 22  Rule 10  CPC did  not apply  because the agreement
\ndated 26.2.88  was not one entered into pending suit but was
\none entered  into before  suit. The clauses in the agreement
\ndated 26.2.88  and the\tpower of  attorney of  the same date
\nwere explained\tfor contending\tthat it\t was not  a case  of
\n‘entrustment’ but  a case  of ‘assignment’. It was contended
\nthat the  view of  the High Court that consent of the owners
\nwas  necessary\tbefore\tthe  builder  could  enter  into  an
\nagreement with\tthe appellant-developer\t was not correct. It
\nwas argued  that the trial court was right in this behalf in
\nholding that  such consent  was not  necessary and  in\talso
\nholding that  the contract  with the  plaintiff was  not one
\nbased  on  the\tspecial\t qualifications\t or  skills  of\t the
\nplaintiff-builder. So  far as this aspect as to the personal
\nnature of  the\t contract  was\tconcerned,  the\t High  Court
\nreferred to the same in its judgment but did not express any
\nopinion. Counsel  for appellant submitted that the appellant
\nneed  not  go  for  a  suit  but  could\t be  allowed  to  be
\nsubstituted as\ta plaintiff  to continue the present suit in
\nthe place of the original plaintiff. It was also argued that
\nthe deceased  plaintiff had  executed a\t separate  agreement
\ndated 29.8.1989\t in favour  of appellant  that he  would not
\n‘settle’  the\tmatter\twith   the  defendants\twithout\t the
\nappellant’s consent.\n<\/p>\n
     On the  other hand,  learned  senior  counsel  for\t the
\nowners-defendants Sri Ramesh P. Bhat argued that his clients
\nhave nothing  to do  with the appellant. The defendants have
\nno connection  whatsoever with\tthe  appellant\tbecause\t the
\nappellant was not a party to the agreement dated 4.2.82. Nor
\nwere  the   defendants\tparties\t  to  the   agreement  dated
\n26.2.1988. Further  the original plaintiff when he filed the
\nsuit on\t 8.4.88 did not think of impleading the appellant as
\na co-plaintiff\teven though  the plaintiff  had by that time
\nentered into  the agreement dated 26.2.88 with the appellant
\nbefore suit.  Nor did  the appellant think of joining in the
\nsuit which  was filed in 1988 if he had acquired some rights
\nby “assignment”\t before suit.  Even after  the death  of the
\nplaintiff in  1995, the\t appellant did not wake up but filed
\nthe  application   only\t after\t delay\tof   one  year.\t The
\ndefendants-owners could\t not be\t compelled to defend a suit-
\nwhich the plaintiffs did not want to pursue – merely because
\na third\t party claiming\t that he had acquired certain rights
\nagainst the  original plaintiff\t under\tan  agreement  dated
\n26.2.1988, wants  to continue the suit. The appellant has to
\nfirst establish\t his rights  against the  plaintiff’s  legal
\nrepresentatives and  then only\tcan he\thave locus standi to
\nproceed against\t the owners.  The defendants have no privity
\nof contract  with the  appellants. It  was  urged  that\t the
\nspecial qualifications\tand silks  of Sri  Amrit  Mohan\t Lal
\nPatel the  original Plaintiff.\tTherefore,  the\t said  amrit
\nMohan Lal  Patel had  no right\tto entrust  his duties\tto a
\nthird party  for development purposes without the consent of
\nthe owners  and the owners were satisfied that the appellant
\nwas an\tequal to  the original\tplaintiff in  his skills  an
\ncapacity. The  owners have no idea of the capacity or skills
\nof  the\t  appellant.  The   rights  and\t duties\t which\twere
\nabsolutely  personal to late Amrit Mohan Lal Patel could not
\nhave been assigned to the appellant. It was true that in the
\npreamble to  the agreement  dated 4.2.82. the word ‘assigns’
\nwas used  while describing the original Builder as including
\n“his heirs,  executors, administrators\tand assigns  of\t the
\nOTHER PART”.  Learned counsel  argued that  if the rights or
\nduties of  the Builder were personal to the builder and were
\nnot assignable,\t then the  mere use  of the builder and were
\nnot assignable, then the mere use of the word ‘assigns’ cold
\nnot be\tof any\thelp to\t the appellant. The interest created
\nmust  be   an  assignable  interest.  The  owners  had\talso
\nconfidence in  the financial capacity of Sri Amrit Mohan Lal
\nPatel, the  builder and\t that was  also another\t reason\t for
\nholding that the contract dated 4.2.82 was one of a personal
\nnature. Thus  there was\t no assignment in fact or in law and
\nthere was  no consent  of the owners. The original plaintiff
\nhad defaulted.\tSo far\tas the\tlegal representatives of the
\nbuilder were  concerned, they were entitled to say that they
\nhad neither  the capacities  nor the  special skills  of the
\noriginal plaintiff.  Therefore, the legal representatives of
\nthe  original\tplaintiff  were,   for\tgood   reasons,\t not
\ninterested in  seeking the  specific  performance  of  their
\ndevelopment agreement  against the  owners. Thus  they\twere
\nentitled to  withdraw the suit and plead that this was not a
\ncontract they could perform.\n<\/p>\n
     The learned senior counsel, Sri Maganbhai Barat for the
\nplaintiff’s  legal   representatives   adopted\t the   above
\ncontentions of\tSri Ramesh  P. Bhat and contended that there
\nwere no merits in the appeal.\n<\/p>\n
     We have  set out  the  respective\tcontentions  of\t the
\nparties in  sufficient detail. We may state that the learned
\nsenior counsel\tfor the\t appellant has,\t and  in  our  view,
\nrightly not  relied upon  Order 22  Rule 10  CPC  as  it  is
\nnobody’s case  that there  is an assignment or devolution of
\ninterest during\t the pendency  of the  suit. So\t far as\t the
\nreasons given  by the  trial Court  and the  High Court\t for
\nrejecting the  case of\tthe appellant  under order 1 Rule 10
\nand section  146 c.p.c.\t are concerned,\t we do\tnot think it
\nproper to  go into  them  in  detail  inasmuch\tas,  in\t our
\nopinion, the  above issues  have to  be\t thrashed  ut  in  a
\nproperly constituted  suit.   We think\tit neither desirable
\nnot in\tthe interests  of parties,  to\tgo  into  the  above
\nquestions in  an  appeal  arising  ut  of  an  interlocutory
\napplication.  the  problem  is\tthat  if  we  interpret\t the
\nagreements, for the purpose of the application under Order 1
\nRule 10\t or section  146 c.p.c.,  our review  is  likely  to
\nprejudice any  decision on  the same  questions if  taken up
\neither in  this suit  or in  any separate  suit that  may be
\nfiled by  the appellant. The reason is this. any decision in
\nfavour of  the appellant to implead him as a plaintiff would
\nnecessarily  require  us  to  go  into\tthe  rights  of\t the
\nappellant-developer visa-vis  the original plaintiff-builder
\nand  vis-a-vs\tthe  defendants,  owners  –  under  the\t two
\nagreements. This  may prejudice\t the case  of the owners and
\nthe legal  representatives of the builder in this very suit,
\nsimilarly, any decision against the appellant will prejudice
\nthe appellant’s case if he files an independent suit. In the
\nabove-said peculiar  circumstances of the case we are of the
\nview that  this is  not a fit case to go into the merits and
\nno interference\t is called  for under  Article\t136  of\t the
\nConstitution of\t India. The  plaintiff, if he is so advises,
\nmay pursue  his\t remedies  by  way  of\ta  fresh  suit.\t The
\nobservations or\t findings of  the trial court or of the High
\nCourt in  the impugned\tjudgments as  to the  rights of\t the
\nplaintiff under\t the agreements\t dated 26.2.88 – whether the
\nobservations or\t findings  are\tin  favour  or\tagainst\t the
\nplaintiff –  are kept  open for adjudication in such a suit.
\nWe are\tnot to\tbe under  stood as having said anything upon
\nthe maintainability  or non-maintainability of any such suit
\nor about  the rights  of any  of  the  parties\twho  may  be
\nimpleaded therein.\n<\/p>\n
     We have  stated earlier  that Rs.21  lakhs deposited by
\nthe original  plaintiff in  this  suit\tare  kept  in  fixed
\ndeposit. As  stated earlier  there is  a dispute between the
\nparties in regard to this amount. The appellant says that he
\nprovided these\tmonies to  the deceased\t plaintiff  but\t the
\nlegal representatives of the deceased plaintiff contend that
\nthese monies were not provided by the appellant but were the
\nmonies belonging  to the deceased plaintiff himself. As this
\nis a  dispute which  cannot be resolved in these proceedings
\nwithout taking\tevidence, we  are of the view that the trial
\nCourt should  be directed  to keep the said amount of Rs. 21
\nlakhs and  interest thereon  in its  control for a period of
\neight weeks  from today\t so as\tto enable  the appellant  to
\nseek appropriate relief in a duly constituted suit. We order
\naccordingly. If\t no orders  are obtained  by  the  appellant
\nwithin the above said period in his favour, it shall be open
\nto the\ttrial  Court  to  dispose  of  any  application\t for
\nwithdrawal of  the said\t monies which  may be  filed by\t the
\nplaintiff’s legal  representatives, in\taccordance with law.
\nWe are\tnot to\tbe understood as deciding anything in favour
\nor against  the appellant  or other  parties to\t the suit in
\nregard to  the said  amount and\t interest thereon,  lying in
\ndeposit in the trial Court.\n<\/p>\n
     Subject to\t the above, this appeal is dismissed. in the
\ncircumstances, there will be no order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Ajmera Housing Corporation vs Amrit M.Patel (Dead) Through … on 3 August, 1998 Author: M J Rao. Bench: S.B. Majmudar, M. Jagannadha Rao. PETITIONER: AJMERA HOUSING CORPORATION Vs. RESPONDENT: AMRIT M.PATEL (DEAD) THROUGH L.RS. & OTHERS DATE OF JUDGMENT: 03\/08\/1998 BENCH: S.B. MAJMUDAR, M. JAGANNADHA RAO. ACT: HEADNOTE: JUDGMENT: J U […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-43802","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nAjmera Housing Corporation vs Amrit M.Patel (Dead) Through ... on 3 August, 1998 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ajmera-housing-corporation-vs-amrit-m-patel-dead-through-on-3-august-1998\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ajmera Housing Corporation vs Amrit M.Patel (Dead) Through ... on 3 August, 1998 - 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