SATNAM CHAND KOHLI & ANR vs SATYAM CONSTRUCTION CO. & ORS

The present appeal involves a transaction in respect of property bearing Plot No. H situated in Layout Plan of Delhi, Bengali Hindu Cooperative

Group Housing Society Ltd. Known as Tagore Park, Delhi measuring 240 sq. yds (hereinafter the “suit propertyâ€). The Appellants/Plaintiffs

(hereinafter, “Plaintiffsâ€) were the owners of the suit property. The Respondent No.1/Defendant No.1 - Satyam Construction was a

partnership firm of the Respondent No.2/Defendant No.2 - Mr. Harbans Lal Kumar and Respondent No.3/Defendant No.3 - Mr. Ish Julka

(“hereinafter Defendantsâ€). A transaction of sale was entered into between the Plaintiffs and the Defendants. As per the said transaction which

was agreed to between the parties, the total sale consideration for the suit property was to be Rs.4 Lakhs. A sum of Rs.1.25 Lakhs was to be,

however, given to or kept back with the Defendants. The said amount of Rs.1.25 Lakhs was to be released in favour of the Plaintiffs upon mutation

of the plot in favour of the sub-lessees who had issued the GPA in favour of the Plaintiffs and supporting documents for submission of the building

plans.

The property was a lease hold property allotted by the DDA in favour of the Smt. Usha Chhabra and Smt. Urmil Kapoor who had in turn sold the

property to the Plaintiffs through a power of attorney. Since the building plans and other sanctions would be given only after mutation was done in

favour of the sub-lessess, this condition was imposed by the Defendants. Â

Along with this agreement dated 13th April, 1992, an agreement to sell, Will and GPA were executed between 13th April, 1992 and 16th April,

1992. Since the sale deed was not being executed, the Plaintiff appointed Mr. Raj Kumar Julka, the father of Defendant No.3 Mr. Ish Julka as PoA

holder.Â

It appears that the Plaintiffs gave whatever documents were in their possession, but the Defendants continued to contend that the mutation and the

documents required for the building plans were not given. Accordingly, the sum of Rs.1.25 Lakhs was not returned by the Defendants to the

Plaintiffs. The Plaintiffs then sought revocation of the Power of Attorney issued in favour of the Defendants. Despite repeated notices, the

Defendants did not return the amount of Rs.1.25 Lakhs and the Plaintiff then filed a suit being 274/1995 for declaration and permanent injunction.Â

Due to some technical defects, the said suit was withdrawn and the subject suit was filed seeking following reliefs.Â

“………………..

It is, therefore, most respectfully prayed that a decree for recession of contract/agreement dated 13.4.1992 may kindly be passed in favour of the

Plaintiffs and against the Defendants.â€​

It is relevant to note that in this suit, initially the Plaintiffs did not seek recovery of Rs.1.25 Lakhs. Following issues were framed on 29th January,

1999. Â

“1. Whether the suit of the plaintiff is not maintainable as framed?OPP

Whether there was any agreement between the parties dated 13/4/92 and plaintiff violated the terms thereof? OPD

Whether the suit is barred by time? OPD 4. What is the effect of power of attorney executed by the plaintiff in favour of the defendants and the

registered deed of revocation dated 16/9/94? OPP

Whether the plaintiff is entitled to injunction and decree of recession of contract prayed for? OPP

Relief.â€​

On 25th August, 2006, the Plaintiff moved an application under Order VI Rule 17 CPC seeking to add a prayer for recovery of Rs.1.25 Lakhs.Â

The same was dismissed on 7th September, 2006 on the ground that the said relief is barred by limitation.Â

Thereafter, the Plaintiff appeared as PW-1 and he submitted that he had carried out his obligations under the agreement. His basic contention in

his evidence was that the Defendants had gone ahead and raised a basement in the property after completion of the formalities by the Plaintiff. No

further formalities were left to be completed by the Plaintiff. In fact, the Defendants apart from the basement also raised further construction. In view

of this, the Power of Attorney, he had granted to the Defendants, was cancelled by him. He claimed that he had given all the documents as

required in the agreement dated 13th April, 1992 within 30 days, though he did not have any receipt to show the same. Â

Defendant No.2 - Mr. Harbans Lal Kumar appeared as DW-1 when he appeared on 8th October, 2003 he stated that he had already sold the suit

property but failed to disclose when he had sold the same. He confirmed that the property was sold after construction and the site plan was also got

sanctioned before construction.  He stated that mutation was not done and, therefore, he had approached the Court to get mutation of the

property before selling the same. He did not recall the name of the person in whose favour the mutation was to be done. He confirmed that the

property was sold on the basis of the Power of Attorney and agreement to sell. He stated that a part of the property was sold prior to the filing of

the written statement and remaining property was sold after the suit was filed.  DW-2 â€" Mr. Ish Julka, another partner of Satyam Construction

Co. Ltd. stated that the Plaintiffs did not get the mutation done and hence the plans could not be passed but thereafter they somehow managed to get

the building plans sanctioned both in the name of Ms. Urmil Kapoor and Ms. Usha Chhabra. Thus, sanctioning of building plans was due to their own

effort and the Plaintiffs did not perform their part of agreement. He confirmed that the person in whose favour of Power of Attorney had been

issued was Mr. Raj Kumar Julka, his father. While confirming the execution of GPA, he stated as under:

“………………I know Mr. Raj Kumar Julka who is my father. It is correct that Mr. Satnam Chand Kohli had executed a general power of

attorney in favour of Sh. Raj Kumar Julka. It is correct that after executing GPA in favour of Sh. Raj Kr. Julka, my father, the plaintiff left no

concern with the property. It is wrong to suggest that Raj Kr. Julka was a person who could appear before DDA and other authorities for mutation of

the property. Voltd. Satnam Chand had got an agreement with us to get the property mutated……………….â€​

A perusal of the evidence on record and the pleadings shows that initially a transaction of sale in favour of the Defendants was accompanied with

the agreement dated 13th April, 1992 by which a sum of Rs.1.25 Lakhs was deposited with the Defendants as security for delivery of the documents

of mutation and for submission of sanctioned building plans. As per the evidence of PW-1 he delivered the documents which were required to be

delivered. This fact of delivery of all the documents is also established by the subsequent events i.e. that construction was actually carried out in the

property and that it was partly sold even before the written statement was filed. Â

The date of filing of the present suit is 14th October, 1996. Within a span of four years i.e. from 13th April, 1992 to 14th October, 1996, the

Defendants had obtained mutation, obtained sanction of building plans and constructed the property. They had even gone a step further i.e. they had

even sold the property. Â

Moreover, after the agreement dated 13th April, 1992 was entered into, a GPA was executed by the Plaintiffs in favour of the Defendant No.3â€s

father on 16th April, 1992. The clauses in the GPA permitted the Attorneyholder to carry out the following acts:Â

• To manage and control the property in all respects;

• To represent the owner before each and every concerned authority;

• To give said property on rent, to receive the rent, to execute, sign and present the rent deed/lease deed before the Sub-Registrar and get the same

registered;

• To get the property/premises vacated on behalf of the owner;

• To get plan prepared by any architect, to file the same for sanction of the authorities;

• To obtain permits and quotes of building materials;

• To raise construction, engage the contractor, get building completed, installation of water and electricity connections, and to obtain complete

certificate;

• To deposit house tax, water and electricity charges and other dues and demands of any department;

• To appear and act in M.C.D./ D.E.S.U./ D.D.A./ Society etc and other authorities, and give statement, affidavit, application etc on behalf of the

owner;

• To execute sign and present the suppl. deed/ rectification deed before the proper registering authority and get it registered;

• Apply for Income Tax Clearance Certificate;

• To sell the property in whole or in parts, enter into agreement to receive the advance, issue receipts, apply for sale permission before the

concerned authorities, etc;

• To appear before all or any concerned authority to get the property converted to free hold;

• To execute sign and present the sale deed/s before the Registrar/Sub-Registrar, or any other competent registering authority;

• To receive the consideration amount for such sale and issue receipts;

• To execute sign and present all suits, plaints, complaints, written statement, affidavits, application, in proper courts of law and proceed in all such

proceedings filed in the ownerâ€​s name;

• To compromise, compound, or withdraw any such proceedings, appoint arbitrators, engage lawyers, deposit and withdraw money, execute

decrees, receive or recover the decretal amount;

• To appoint further attorney;

The factum of execution of GPA is clearly admitted by DW-2, in the cross examination extracted above. He admits that after the execution of the

GPA in favour of his father, the Plaintiff was left with no concern in the property. He deposed that “It is correct that after executing GPA in

favour of Sh. Raj Kumar Jhulka, my father, the plaintiff left no concern with the propertyâ€. When this is the position, there was impossibility on

behalf of the Plaintiffs to get the mutation done as they had already delivered all the documents and had also appointed Defendant No.3â€s father as

GPA holder. The Plaintiffs could not have approached any authority to get the mutation done once they had sold the property.Â

On the other hand, the Defendants have enjoyed the benefits of the entire transaction i.e. they sold the property without even the so-called

documents which still remained to be given by the Plaintiffs. This shows that there were no documents which were to be given by the Plaintiffs and

the evidence of the Plaintiff on record is more credible and believable. The Defendants have unlawfully retained the amount of Rs.1.25 Lakhs.Â

As per the agreement dated 13th April, 1992, once the documents are given “the second party is bound to return the amount afore mentioned at the

receipt of these documents without any delay or excuse.â€Â However, if the documents were not given, the deposits could have been forfeited.Â

There is no notice on record issued by the Defendants calling upon the Plaintiffs to furnish the documents as per this agreement. First notice on

record is a notice issued by the Plaintiffs dated 22nd September, 1994 calling upon the Defendants to “release payment of Rs.1,25,000/- including

interest @ 2% per month till date, within a period of 15 days from receipt of this notice.â€Â However, this notice was not replied to by the

Defendants. No notice was ever issued by the Defendants calling upon the Plaintiffs to furnish the documents or informing the Plaintiffs that the

amount stood forfeited. Upon the nonreturn of the money of the amount of Rs.1.25 Lakhs, the Plaintiff cancelled the Power of Attorney which was

issued in favour of the Defendants.

Contemporaneous evidence on record clearly establishes that while the Plaintiffs categorically stated in the notice dated 22nd September, 1994,

that upon the request of the Defendants that the Power of Attorney was executed in favour of the Defendants†nominee and, therefore, upon the

execution of the Power of Attorney, the amount was due and payable. The execution of the Power of Attorney was well within the knowledge of

the Defendants, who illegally held back the amount which was due to the Plaintiffs. Thus, the Plaintiffs were justified in claiming rescission of the

agreement to sell dated 13th September, 1992. The prayer, though not very happily worded in fact, seeks to cancel the transaction of sale which

took place between the parties. Â

Considering the subsequent developments i.e. sanctioning of building plans, the construction undertaken by the Defendants and the sale which has

been made by the Defendants, too much water has flowed under the bridge for the transaction to be rescinded. There is, however, no doubt that the

Defendants held back the Plaintiffâ€s money despite enjoying all the benefits of the property and even having sold it further, without disclosing the

same to the Court until the recordal of evidence. Â

Under such circumstances, the Court is not helpless in granting relief to the Plaintiffs, who have been wronged. It is the settled position in law

that any Court is fully empowered to grant lesser relief in favour of the Plaintiffs when higher relief is sought. This position has been upheld by the

Supreme Court in Bachhaj Nahar v. Nilima Mandal (2008) 17 SCC 491, where the Supreme Court observed as under:

“22. The observation of the High Court that when a plaintiff sets forth the facts and makes a prayer for a particular relief in the suit, he is merely

suggesting what the relief should be, and that it is for the court, as a matter of law, to decide upon the relief that should be granted, is not sound. Such

an observation may be appropriate with reference to a writ proceeding. It may even be appropriate in a civil suit which proposing to grant as relief, a

lesser or smaller version of what is claimed. But the said observation is misconceived if it is meant to hold that a civil court may grant relief it deems

fit, ignoring the prayer.â€​

Thus, under the provisions of the Indian Contract Act 1872, compensation under these circumstances, can be awarded. The Defendantsâ€

conduct lacks bonafides. On the one hand the Defendants, in fact, did not pay the full consideration for the property, i.e. out of the Rs.4 Lakhs paid,

they took back Rs.1.25 Lakhs as security deposit, and secondly they got the Power of Attorney executed in favour of the father of one of the

Defendants which vested the power in the GPA holder to get all plans of the property sanctioned from the authorities and to deal with the authorities

as may be required. They also obtained the requisite documents from the Plaintiffs and thereafter, got the building plans sanctioned, construction on

the property and sale of property. They did not need any further documents to enjoy the ownership of the suit property. They exercised their

rights as owners of the suit property beyond any cavil. Having enjoyed the property they had no right to hold back the amount of Rs.1.25 Lakhs.Â

The Defendants†case is also unbelievable i.e. that the Plaintiffs did not give the documents as no notice was issued by the Defendants calling

upon the Plaintiffs to supply the documents or to the effect that money is being forfeited. Even when the Plaintiffs got notice dated 22nd September,

1994 issued through their lawyers, the Defendants maintained stoic silence as they were obviously in the process of building and transacting with third

parties in respect of the suit property by then. The written statement was filed on 9th May, 1997. The first appearance of the Defendants was in

December, 1996. Despite this no disclosure was made by them that the suit property was sold until the recordal of the evidence of DW-1 & DW-

2. Thus, the Plaintiffs are entitled to monetary compensation for the long drawn litigation they have been made to fight and to undo the wrong done

to them. Â

Since the property has already been sold by the Defendants, in respect of the rescission/cancellation as sought by the Plaintiffs, the Plaintiffs are

awarded a sum of Rs.5 Lakhs as compensation which shall be paid along with interest @ 8% per annum from the date of filing of the suit till the date

of payment. The Defendants are directed to make the requisite payments within four weeks, failing which interest would be payable @ 12% per

annum.Â

Appeal is allowed in the above terms.