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M/S RACHITECH ENGINEERING PVT.LTD., FARI versus M/S KUNDAN STEELS PVT.LIMITED, FARIDABAD

High Court of Punjab and Haryana, Chandigarh

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M/S Rachitech Engineering Pvt.Ltd., Fari v. M/S Kundan Steels Pvt.Limited, Faridabad - CR-3302-2006 [2006] RD-P&H 5903 (24 August 2006)

IN THE HIGH COURT OF PUNJAB AND HARYANA

AT CHANDIGARH.

C.R. No.3302 of 2006

Date of decision: 23.8.2006

M/S Rachitech Engineering Pvt.Ltd., Faridabad.

............... Appellant

Versus

M/S Kundan Steels Pvt.Limited, Faridabad.

................ Respondent.

CORAM : Hon'ble Mr.Justice Mahesh Grover
....

Present: Shri P.K.Mutneja, Advocate for the petitioner.

Shri Lokesh Sinhal, Advocate for the respondent.

....

Mahesh Grover,J.

The petitioner has impugned order dated 24.5.2006 by which its application for adjourning the appeal directed against order dated 30.7.2005 passed by Rent Controller, Faridabad, sine die, was declined by the Appellate Authority, Faridabad.

Briefly stated the facts of the case are that the petitioner alleged that it was in possession of industrial plot no.172, Sector 25, Faridabad and was carrying on its business activities from there. The case of the petitioner was that it was put in possession of the suit property pursuant to an agreement to sell of the said plot executed between it and the respondent for a total sale consideration of Rs.20,80,000/-. A sum of Rs.80,000/- was said to have been paid vide cheque no.2948903 dated 19.12.1989 drawn on Canara Bank, Main Branch, Faridabad. Annexure P1 was the agreement to sell on the basis of which the possession was said to have been given to the petitioner which is borne out from Annexure P3. The plot in question was alleged to have been mortgaged with the Canara Bank and it was contended that the sale deed was to be executed after the mortgage had been redeemed from the bank by the respondent. Since the possession of the suit property had been delivered, a rent agreement was executed between the petitioner and the respondent primarily to address the insecurities of the latter as it was parting with the possession of the suit property. The rent agreement was executed on 1.2.1990 according to which the petitioner was to pay a sum of Rs.6000/- per month to the respondent. It was, later on, enhanced to Rs.7500/- per month in 1993. The Haryana Urban Development Authority (for short, `the H.U.D.A.') authorities resumed the plot in question and according to the petitioner, it paid a sum of Rs.2,00,000/- to the H.U.D.A. to save the plot from resumption. Subsequently, the respondent did not redeem the mortgage with the bank and the liability of Rs.34,05,034.80 stood against the said plot and the property was slated for auction on 16.7.1998 pursuant to the order of the Debts Recovery Tribunal. The petitioner paid this amount and satisfied the claim of the bank. Thereafter, the petitioner filed a suit for specific performance seeking to enforce agreement dated 19.12.1989 and pleaded that it had been put in possession of the suit property pursuant to this agreement and, therefore, it was entitled to the enforcement of the same and was also entitled to protect its possession under the provisions of Section 53-A of the Transfer of Property Act (hereinafter referred to as `the Act').

The respondent, in the meanwhile, filed a petition under the provisions of Haryana Urban (Control of Rent and Eviction) Act,1973 (for short, the 1973 Act') seeking eviction of the petitioner from the suit property on the ground of non-payment of rent and personal necessity. The Rent Controller ordered the eviction of the petitioner on both the counts and an appeal was preferred by the petitioner against the order of the Rent Controller, which is still pending. During the course of these proceedings, the petitioner moved an application before the Appellate Authority with a prayer that the appeal be adjourned sine die till its rights are determined in the suit for specific performance which it has filed for enforcement of the agreement to sell dated 19.12.1989. The Appellate Authority, vide the impugned order, has refused to grant this prayer of the petitioner which has resulted in the present petition.

Shri P.K.Mutneja, learned counsel for the petitioner contended that an agreement to sell had been executed on 19.12.1989 and on the basis of this agreement, the petitioner was put in possession which is borne out from Annexure P3, a letter written to the respondent on 14.11.1990. He further contended that the petitioner had been put in possession of the suit property pursuant to this agreement to sell on 15.1.1990 and thereafter, it retrieved the suit property from the clutches of resumption by paying the amount due to the H.U.D.A.and subsequently, it also satisfied the decree in favour of the bank by paying an amount of more than Rs.34,00,000/-. Shri Mutneja submitted that in view of the above, the agreement to sell had been performed in part and the petitioner had been put in possession of the suit property. He also submitted that the petitioner had paid more than the amount of sale consideration. Learned counsel contended that in the proceedings before the Rent Controller, the petitioner had denied the relationship of the landlord and tenant since the agreement to sell had been executed and had been duly acted upon and, therefore, it was entitled to the protection of Section 53-A of the Act. Shri Mutneja argued that the proceedings under the 1973 Act were misconceived and, therefore, the appeal itself should have been adjourned sine die so as to await the outcome of the suit for specific performance which is likely to determine the status of the petitioner as it had paid the amount more than the sale consideration by satisfying the bank decree and also because it had been put in possession pursuant to the agreement to sell. In support of his arguments, learned counsel placed reliance on the judgments reported as (2000) 9 S.C.C. 339 R.Kanthimathi and another Versus Beatrice Xavier (Mrs.); (2001) 4 S.C.C.

655 Manoj Kumar Versus Bihari Lal (dead) by Lrs. ; (2002) 3 S.C.C. 676 Shrimant Shamrao Suryavanshi and another Versus Pralhad Bhairoba Suryavanshi (dead_ by Lrs. and others; 2005(3) S.C.C. 442 Ashish Kmar Das and another Versus Rekha Mukherjee; and (2005) 12 S.C.C. 164 - Huvappa Irappa Ballari Versus Basava and another.

Shri Lokesh Sinhal, learned counsel for the respondent repelled the arguments of the learned counsel for the petitioner and contended that the agreement to sell was never acted upon and the petitioner was never put in possession of the suit property pursuant to that agreement. He contended that the rent agreement was executed on 1.2.1990 and the petitioner was put in possession of the suit property. Shri Sinhal urged that the petitioner himself had admitted the relationship of landlord and tenant before the H.U.D.A. authorities when it chose to pay Rs.2,00,000/- and this fact was acknowledged in the communication which is on record as Annexure P4. He contended that the petitioner had paid the amount to the bank of its own and that the respondent had filed an appeal against the order of the trial Court by which the petitioner was permitted to pay the decretal amount to the bank and the Appellate Court had answered the prayer of the respondent in its favour and the petitioner had gone up in revision wherein this Court held that the rights of the parties to recover the amount would not be affected and it was only the decree in favour of the bank which was being satisfied by the petitioner. Learned counsel urged that the respondent had never permitted the petitioner to make the payment to the bank and in case, it has done so under the orders of this Court, then it cannot be said that the amount was paid in pursuance to the performance of the agreement to sell. He argued that the Rent Controller had already ordered the eviction of the petitioner and, therefore, before the Appellate Authority, the petitioner could not raise a plea that the proceedings be adjourned sine die to await the decision of the Civil Court which was seized of the matter pertaining to the enforcement of the agreement to sell.

I have thoughtfully considered the contentions of the learned counsel for the parties and perused the record.

In my opinion, the contention of the petitioner that it had been put in possession of the suit property pursuant to the agreement to sell and that it had already paid an amount more than the sale consideration, and, therefore, its possession ought to be protected under Section 53-A of the Act does not deserve to be accepted. The petitioner has placed on record Annexure P3 to show that it had been put in possession on 15.1.1990 and great stress has been laid on this document to substantiate its claim that its possession was pursuant to the agreement to sell. A cursory look at this document reveals that it was a mere offer and was only an expression to establish the bona fides of the respondent, who had said as follows:- "I am directed to write to you with reference to the agreement to sell dated 19th

December,1989, to convey our decision that pending completion of the necessary formalities, we in order to show our bona fides are ready and willing to deliver to you the actual physical possession of the premises at Plot No.172, Sector 25, Faridabad, with immediate effect.

2. Please arrange to formally take over the possession on the express understanding that you will make available sufficient funds at very short notice so as to enable us to settle the matter with out Bankers."

There is no evidence, however, to show that whether the possession was actually handed over to the petitioner pursuant to the agreement to sell or even pursuant to this letter Annexure P3. In fact, the entire record that the petitioner has produced along with this petition shows to the contrary. Annexure P4 is the order of the Administrator, H.U.D.A.

before whom the petitioner had made an application seeking to revoke the resumption by making necessary payment. In this order dated 24.1.1995, the petitioner categorically stated that it had taken the plot on rent from its owner in March,1990 and the Administrator, H.U.D.A. thereafter went on to decide the matter by accepting the payment from the tenant, who was the petitioner. The relevant extract of order Annexure P4 is reproduced below:- "The present appeal has been filed by the appellant company as the respondent's office has not been accepting payment of dues in respect of plot No.172, Sector 25, Faridabad. In support of the appeal, the appellant has stated that the company, which is engaged in the manufacture of sugar/cement plant and material handling equipments, is employing 140 workers,that the plot was taken on rent from its owner in March,1990, that the owner of the plot had never brought to their notice regarding default in payment on account of enhancement; that they came to know about the dues only when the office of respondent asked them to vacate the premises, and that since they are paying the dues on behalf of the owner of the plot, the payment may be accepted.

The DDA appearing on behalf of the respondent contended that the appellant has no locus standi to file the appeal as he is merely a tenant of the plot and appeal can not be filed by a tenant. The appeal can be filed only by the owner of the plot, he added.

I have heard both the parties and gone through the records carefully. I am afraid that the plea of the respondent's counsel is not tenable as the plot in question has been rented out to M/S Rachitech Engineering Private Limited, the documents of which have been shown at the time of hearing of the appeal.

The dues of HUDA in this case of enhancement and it seems the owner of the realization of its dues and that may be the reason that the respondent had, after resuming the plot and locking the premises on 26.6.1995, verbally ordered on 27th June,1995 to open the lock. On a question, it was told that this was done as the tenant had promises to pay the amount along with interest. If this is the position, then I do not find any reason for not accepting the payment from the tenant who has been legally given the plot on rent. However, the tenancy is not recorded in the papers of the Estate Office.

In view of the above position, I hereby order that the payment maybe accepted from the tenant in question. The appellant is also directed to get the tenancy recorded in the papers of HUDA as per provisions of Industrial Policy of the State Government which was issued vide Endst.No.2(1) 44-II BII-89 dated 26.9.1991 and which was duly adopted in HUDA for implementation vide Endst. No. A-II-P-91/ 23271 dated 11.11.1991."

Once the petitioner itself admits its status as a tenant, then it cannot be conclusively said that it was in possession of the property in pursuance to the agreement to sell and, therefore, the judgments in Shrimant Shamrao Suryavanshi and another Versus Pralhad Bhairoba Suryavanshi (dead) by Lrs. and anothers (supra) and Huvappa Irappa Ballari Versus Basava and another (supra) do not enhance the cause of the petitioner as Section 53-A of the Act would not be attracted where there is no conclusive evidence to show that the agreement to sell had been performed in part and the possession of the prospective vendee was in pursuance thereof. To derive the benefit of Section 53-A, there are certain conditions which are required to be fulfilled if the transferee wants to defend or protect his possession. These are as follows:- "(1) There must be a contract to transfer for consideration of any immovable property.

(2) The contract must be in writing, signed by the transferor, or by someone on his behalf.

(3) The writing must be in such words from which the terms necessary to construe the transfer can be ascertained.

(4) The transferee must in part-performance of the contract take possession of the property, or of any part thereof.

(5) The transferee must have done some act in furtherance of the contract.

(6) The transferee must have performed or be willing to perform his part of the contract.

If the conditions enumerated above are complied with, the law of limitation does not come in the way of a defendant taking plea under Section 53-A of the Act to protect his possession of the suit property even though a suit for specific performance of a contract is barred by limitation." The contention of the petitioner that it had paid the amount to the bank which should be taken as substantial compliance of the agreement to sell is of no avail to it. The trial Court had passed the order dated 14.7.1998 in the suit for specific performance permitting the petitioner to deposit on or before 15.7.1998 the entire decretal amount including the costs and expenses which worked out approximately to be Rs.36 lacs. This order was challenged by the respondent before the Appellate Court, which, vide its order dated 11.10.1999, set aside the same. The revision petition filed by the petitioner was disposed of by this Court vide order dated 7.9.2002, the relevant extract of which is as follows:- "Of course, it is to be seen at the time of merits of the case whether the plaintiff has a right to seek the relief of possession of the suit land by way of specific performance of the agreement to sell dated 19.12.1989. If the suit of the plaintiff is dismissed, then defendant no.1 has nothing to loose. In that event, it will be seen whether the plaintiff is able to recover his amount from defendant No.1 or not. The learned Addl. District Judge was not right in observing that the petitioner Bank had to return the entire amount to the plaintiff and the petitioner Bank was at liberty to recover the amount in accordance with the procedure prescribed by law. The amount has been paid to the petitioner bank. The bank is not concerned as to who has paid the amount . The fact remains that its decree stands satisfied. If defendant No.1 is able to further alienate the suit property, then it will cause complicity and will lead to multiplicity of litigation. Otherwise also, it is well settled law that the first appellate court should be slow in disturbing the order of the trial court whereby the plaintiff was granted the relief of ad interim injunction. The order dated 14.7.1998 passed by the trial court is a well reasoned order and I concur with the reasoning given therein. The order passed by the learned Additional District Judge, dated 11.10.1999 cannot be sustained as it is based on misconception and the same is perverse. Consequently, both the revision petitions are accepted. The impugned order dated 11.10.999 passed by the learned Addl.District Judge is set aside while that of the Civil Judge (Sr.Div.) dated 14.7.1998 is restored." The petitioner was permitted to make the payment because of the reasons mentioned in the above reproduced order and not as a result of part performance of the agreement to sell. The right of the petitioner to recover its amount would still sustain in case the suit for specific performance is dismissed. It was not with the consent of the respondent that the amount was paid. Therefore, the petitioner cannot derive any advantage from this fact.

So far as the contention of the learned counsel for the petitioner that the relationship of the landlord and tenant did not exist between the respondent and the petitioner because the later had paid a substantial amount of sale consideration pursuant to the agreement to sell and the moment the sale consideration was paid, the relationship of landlord and tenant would come to an end deserves rejection for the reason, as noticed hereinabove, that the petitioner itself had admitted that it was the tenant on the suit property while filing an appeal before the H.U.D.A. In view of this, the law laid down in R.Kanthimathi and another Versus Beatrice Xavier (Mrs.) (supra) and Manoj Kumar VersusBihariLal (dead) by Lrs. (supra) is not applicable to the facts of the present case.

The mere agreement to sell would not create any right or title in favour of a prospective vendee. The onus to show that the agreement had been enforced by part performance would always lie on such a vendee. In the instant case, the petitioner has failed to establish the fact that payment of consideration was made pursuant to agreement to sell or that the possession of the suit property was delivered to it in pursuance thereof. Rather, the petitioner itself admitted the fact of its being a tenant over the suit property.

The judgment in Ashish Kumar Das and another Versus Rekha Mukherjee (supra) does not support the contention of the learned counsel for the petitioner that the proceedings before the Appellate Court ought to have been stayed. The facts of that case are totally at variance with the facts of the present case.

In any case, the petitioner chose to contest the proceedings before the Rent Controller and no attempt was made to get the proceedings stayed before him in view of the fact that a suit for specific performance had been preferred by it. Now, once an adverse order has come into existence, it is then that it has moved the application seeking to get the proceedings adjourned sine die. The petitioner could very well have moved a similar application before the Rent Controller. Having contested the litigation throughout and having suffered one adverse order, it does not lie in the mouth of the petitioner to come with a prayer that the proceedings before the Appellate Authority be stayed or adjourned sine die till the disposal of the civil suit. The petitioner is in possession of the suit property and it is obviously a ploy to delay the proceedings on one pretext or the other. The application can, at best, be termed to be an abuse of the process of law and the Appellate Authority was right in dismissing the same.

No other point has been argued.

Nothing observed hereinabove shall have any bearing on the merits of the suit and the rent appeal pending before the Courts below.

For the reasons stated above, there is no merit in the revision petition which is dismissed.

August 23,2006 ( Mahesh Grover )

"SCM" Judge


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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