PARAMOUNT BUILDERS CHENNAI LTD Vs. KAMAL BABBAR

JUDGEMENT

(1.) THE first plaintiff is a Public Limited Company. The second plaintiff is the Chairman and Director of the Company. The second defendant was the owner of the property at No. 166, Thambu Chetty Street, Chennai-1. The plaintiff and the first defendant agreed between themselves jointly to purchase the said property. The first plaintiff and the first defendant on one side and the second defendant on the other side entered into an agreement of sale dated 13th September, 1995, under which the second defendant agreed to sell the said property to the first plaintiff and the first defendant, on the terms and conditions mentioned in the said agreement. The agreed sale price was Rs. 2,95,00,000/=. A sum of Rs. 1 crore was paid as advance, out of which, Rs. 62,00,000/= was paid by the first plaintiff and Rs. 38,00,000/= was paid by the first defendant. For the sum of Rs. 38,00,000/= paid by the first defendant under the said agreement of sale, the first defendant had issued a demand draft for Rs. 3 lakhs and a cheque for Rs. 35,00,000/=. After execution of the agreement of sale, the first defendant was not in a position to honour his cheque for Rs. 35 lakhs given in favour of the second defendant and the said cheque was returned back to the first defendant. When the plaintiff wanted to cancel the deal and get back his advance, the first defendant stated that it will not be possible to get back the advance from the second defendant and somehow persuaded the plaintiffs to pay an additional advance of Rs. 33. 65 lakhs. Therefore, the first plaintiff had to give another sum of Rs. 33,65,000/= by way of a demand draft in favour of the second defendant. The first defendant gave a demand draft dated 22. 9. 1995 for Rs. 1,35,000/=. Thus, the first plaintiff paid Rs. 95,65,000/= and the first defendant paid Rs. 4,35,000/=. The contribution of the first defendant as advance in terms of percentage was Rs. 4. 35 per cent and the contribution of the first plaintiff in the advance was Rs. 95. 65 per cent. The agreement dated 16. 2. 1996 was signed between the first plaintiff and the first defendant. The first defendant told the plaintiffs that unless the agreement is signed, he will not cooperate and coordinate for getting the property and even the advance amounts already paid by the first plaintiff will be lost. There being no other alternative, the plaintiff signed in the agreement. As per the agreement the first plaintiff will purchase the ground and first floor of the existing structure in the said property and the first defendant would purchase the second and third floors and that both off them shall purchase proportionate undivided shares in the land to hold their respective portions. It was further agreed that the common areas/amenities and the open terrace areas shall belong to both the parties or their nominees in equal share on obtaining due permission to build thereon. At the time when the agreement was signed between them, the entire balance consideration under the agreement of sale was paid to the second defendant except a sum of Rs. 20 lakhs. In the agreement dated 16. 2. 1996, it was agreed between the first defendant and the plaintiffs that the said balance consideration of Rs. 20 lahks shall be paid by the first defendant to the second defendant within one month from the date of agreement. The first defendant however, did not make payment of the said sum of Rs. 20 lakhs to the second defendant. It was also agreed that the first plaintiff and the first defendant shall pay all taxes. It was also agreed that all expenses towards the maintenance of the said building like painting, upkeep of common areas, upkeep of security staff etc. , shall be borne in the ratio of 50:50 respectively.

(2.) OUT of the payment of Rs. 2. 75 crores, the plaintiffs have paid a total sum of Rs. 2,10,65,000/= and the payments made by the fist defendant is Rs. 65,35,000/=. In terms of percentage 76. 6 per cent was paid by the plaintiffs and 23. 4 per cent was paid by the first defendant. Since the second defendant failed to execute and register the sale deeds in time, the plaintiffs and the first defendant filed C. S. No. 823 of 1996 before this court against the second defendant. A decree dated 22. 1. 1997 was passed by this court directing the second defendant to execute the sale deed in favour of the plaintiffs and the first defendant herein for a total consideration of Rs. 2. 95 crores and entitling them for one half of the undivided share in the land and the construction area of the ground and first floors. This court also directed that the balance sale consideration of Rs. 20 lakhs shall be adjusted towards interest for the sale consideration of Rs. 2. 75 crores utlised by the second defendant for not conveying the property till then. Since the second did not execute and register the sale deeds as per the decree in the said suit, the first plaintiff and the first defendant filed E. P. No. 9 of 1997 before this court and after due service of notice, this court directed the Assistant Registrar-I, Original Side of this court to execute the sale deed for and on behalf of the second defendant. Accordingly, he executed the sale deed on 30th July 1997 conveying the entire ground floor and first floor and proportionate undivided shares of the land in the said property.

(3.) BEFORE filing of the suit, there were discussions between the first plaintiff and the first defendant on the one hand and the second defendant on the other hand pertaining to the second defendant having received a huge consideration of Rs. 2. 75 crores and retaining the same without executing the sale deeds and the necessity of the second defendant for compensating till the sale deeds are executed. The second defendant also gave a letter on 3. 5. 1996 to the first plaintiff agreeing to pay compensation for the amount advance at the rate of Rs. 4. 80 lakhs per month beginning from April 1996 and further agreed that out of that, a sum of Rs. 2. 50 lakhs would be disbursed on monthly basis and the balance of Rs. 2. 30 lakhs per month would be accrued and settled at the time of transfer of the property. The letter further stated that "this has been discussed and agreed to with Mr. Kamal Babbar". The compensation agreed to be paid by the second defendant was in effect at the rate of 21 per cent per annum on the sum of Rs. 2. 75 Crores paid. That is how it works out to Rs. 4. 80 lakhs per month. In pursuance of the aforesaid agreement wherein the second defendant herein promised to pay compensation, the second defendant herein gave to the first defendant in May 1996 two cheques for Rs. 1. 25 lakhs each, one favouring the first plaintiff and the other favouring the first defendant. On receipt of the said cheque, the first plaintiff wrote a strong letter to the Head Office of the second defendant herein protesting against the same and further called upon the second defendant herein to remit the balance compensation in proportion to the amount paid by the first plaintiff.