Legend Estates Private Limited vs Kirpal Singh

C.R.P.No.924 of 2021 is filed by Legend Estates Private Limited-petitioner herein aggrieved by the order dated 7.04.2021 in I.A.No.843 of 2020 in A.S.No.108 of 2020 on the file of the learned X Additional Chief Judge, City Civil Court, Hyderabad, whereby the application filed under Section 151 CPC seeking to suspend the judgment and decree dated 28.09.2020 in A.S.No.296 of 2015 on the file of the V Senior Civil Judge, City Civil Court, Hyderabad, till the disposal of the appeal is dismissed.

C.R.P.No.925 of 2021 is also filed by Legend Estates Private Limited-petitioner herein aggrieved by the order dated 7.04.2021 in I.A.No.840 of 2020 in A.S.No.107 of 2020 on the file of the learned X Additional Chief Judge, City Civil Court, Hyderabad, whereby the application filed under Order 39 Rules 1 and 2 CPC seeking to grant injunction against the respondents from alienating the schedule property or creating third party rights in respect of the suit schedule property pending disposal of the appeal is dismissed.

The order in I.A.No.843 of 2020 in O.S.No.108 of 2020 which is impugned in C.R.P.No.924 of 2021, is as follows:

‘The petition and counter averments makes it clear that some evidence recorded by the Court below needs to be examined. Hence, at this stage where record from the trial Court is not received and evidence not examined and where the rights of the parties have been conclusively decided by the Court below, I am of the opinion that basing on the affidavit filed by the petitioner-appellant it is not possible for the Court to arrive at right conclusion for granting injunction. We have to wait for some more time in order to come to right conclusion which would be possible only at the time of deciding main A.S. Therefore I am of the view that the petitioner-appellant failed to establish prima facie case, balance of convenience and also failed to establish that irreparable loss would be caused to the petitioner if injunction is not granted. In the light of what has been discussed, I am not inclined to allow the petition.’

O.S.No.296 of 2016 is filed by the respondents-plaintiffs herein against M/s.Legend Estates Private Limited-petitioner in these revisions to declare the Development Agreement-cum-Power of Attorney vide Document No.1903 of 2012 dated 28.02.2012 executed by the plaintiffs in favour of defendant as null and void and also they claimed damages.

The petitioner-defendant herein filed counter-claim in the suit seeking mandatory injunction directing the plaintiffs to vacate and handover possession of the suit schedule property for development as per the sanction accorded by the Greater Hyderabad Municipal Corporation. The trial Court after considering the oral and documentary evidence adduced by both the parties decreed the suit partly by declaring the aforestated development agreement as null and void and dismissed the counter-claim filed by the petitioner herein. Aggrieved by the same, an appeal was preferred and during the pendency of the appeal an interlocutory application was filed to suspend the said judgment and decree.

The petitioner herein would contend that it entered into a Development Agreement-cum-General Power of Attorney on 28.02.2012 and it should obtain all required permissions and clearances from the respective Government Authorities for construction of the project and respondents shall handover vacant possession after commencement of construction works. The petitioner obtained Building Permit Order from the Greater Hyderabad Municipal Corporation on 20.06.2014. Respondents shall deliver vacant possession within one month from the date on which all permissions and sanctions were obtained by it. Upon handing over possession, the petitioner herein shall pay rent for two flats of three-bedroom area or Rs.60,000/- per month as an alternate accommodation from the date of possession till completion of the construction and possession was handed over to respondents. As per Clause 11 of the agreement, the petitioner should complete the construction and hand over the same within eighteen months from the date of getting all the required sanctions or within eighteen months from the date of handing over of possession. The petitioner would contend that it filed I.A.No.843 of 2020 in A.S.No.108 of 2020 for suspension of the judgment and decree, whereas it also challenged the counter-claim in A.S.No.107 of 2020 and filed I.A.No.840 of 2020 and sought for an injunction restraining the respondents from alienating or creating any third party rights over the subject property during the pendency of the appeals.

During the course of arguments, it was submitted by the respondents that if the petitioner deposits entire costs of constructions in an escrow account and utilize the same for the purpose of making constructions, the respondents are willing to consent for allowing the appeals. As such, petitioner filed a Memo dated 01.03.2021 agreeing to deposit the estimated amount of Rs.2,13,16,500/- as cost of construction and also agreed to complete the construction as per the timelines and to pay an amount of Rs.60,000/- per month from the date of delivery of vacant possession, which shows the bona fides and commitment of the petitioner to complete the construction. But in a reply memo the respondents stated that the details for arriving at such figure of Rs.2,13,16,500/- are to be furnished and they shall execute a performance bond for the entire construction value and rental value. As the petitioner is ready to deposit the construction cost, demand of execution of performance bond does not arise. The undertaking filed before the Court is binding on both the parties. The trial Court without considering the same observed that record from the trial Court is to be received till then it cannot be adjudicated. The petitioner would further contend that if the interim orders were not granted at the interlocutory stage, grave prejudice and irreparable loss would be caused to it and it cannot be compensated later. The petitioner also obtained soil investigation report, feasibility certificate from HMWS&SB and incurred Rs.5,44,029/- towards payment of fee apart from that they also deposited Rs.5,00,000/- as non refundable deposit before execution of the development agreement and it further states that the permission was valid for six years as per G.O.Ms.No.7 dated 05.01.2016 and can be revalidated for another two years under Ex.B.1. During the course of cross-examination of P.W.1 by the counsel for the defendant, it is stated that if the defendant deposits three years rents in my account then they are ready but again when they deposited an amount of Rs.21,60,000/- by cheque bearing No.071770 dated 02.04.2018 and suggested to him during the cross-examination he stated that he is not ready to accept the said amount.

The contention of the petitioner is that the respondents herein have not vacated the premises and handed over it to proceed with the construction. Whereas the respondents stated that the petitioner has not provided an alternate accommodation. The petitioner stated that he provided two flats in Legend Mandir Apartments or else prepared to pay the rents @ Rs.60,000/- per month till the completion of the construction. Learned counsel for the petitioner also stated that supplementary development contract was entered for redevelopment on 11/12.11.2014 as per e-mail dated 10.11.2014, as the petitioner already obtained all the required permissions and prepared to complete the constructions within the time frame.

The trial Court without considering the above aspects held that petitioner failed to establish prima facie case and dismissed the application.

In C.R.P.No.925 of 2021 the plaintiffs in the suit entered into the development agreement with Legend Estates Private Limited-petitioner herein for construction in the suit schedule property. As there was an inordinate delay on its part, they intended to cancel the said agreement and approached the Court and the Court granted relief partly in their favour. The respondents herein are intended to execute development agreement in favour of other developer. As such I.A.No.840 of 2020 was filed by the petitioner herein before the appellate Court for suspension of the Judgment and also sought not to alienate or create any third party interest.

The order of the trial Court is patently irregular as it was held that it cannot arrive to the conclusion till deciding the main appeal. The developer came with a proposal with depositing of the construction costs and also agreed rental amount as per the demand of the plaintiffs and he also stated that he already obtained all the required permissions and ready to start with the construction if the respondents herein handover the vacant possession and also provided alternative accommodation to the respondents.

Therefore, I feel it reasonable to set aside the order of the trial Court and to suspend the order of the trial Court and also I feel it reasonable to grant injunction against the respondents herein from alienating the suit schedule property or creating third party rights during the pendency of the appeal.

Accordingly, both the revision petitions are allowed. The order dated 07.04.2021 in I.A.No.843 of 2020 in A.S.No.108 of 2020 and order dated 07.04.2021 in I.A.No.840 of 202 in A.S.No.107 of 2020 on the file of the learned X Additional Chief Judge, City Civil Court, Hyderabad, are set aside.

Miscellaneous Petitions, if any, pending in this revision shall stand closed in the light of this final order.