LAXMAN BALA SURVE Vs. PESH BUILDERS

JUDGEMENT

(1.) THIS suit has been filed by the plaintiffs for setting aside the decree passed by this Court on 5th May, 1986 in High Court Suit No. 1213 of 1986. In the alternative it is prayed that this Court be pleased to declare that the decree passed is invalid and not binding on the plaintiffs. Present Notice of Motion has been taken out with a prayer that pending the hearing and final disposal of the suit, the execution of the Consent Decree passed in Suit No. 1213 of 1986 be stayed. In the alternative it is prayed that the defendants be restrained by an order and injunction from creating third party interest and /or disturbing possession of the plaintiff of the suit property viz. Survey No. 277/4 (part), City Survey No. B-953 and Survey No. 277/6 (part), City Survey No. B-964, Chappel Road, New Band Stand, at village Bandra, Tal. Andheri, Bombay-400 050.

(2.) THE plaintiffs are the owners of the suit property. By an agreement dated 22nd September, 1984, the plaintiffs agreed to sell the suit property to the defendants on the terms and conditions mentioned therein. Under the agreement, the money consideration agreed upon between the parties was a sum of Rs. 3,75,000/ -. It was also agreed between the parties that the defendants would deliver 5 residential units aggregating to 1800 sq. ft. made up of 2 units of 600 sq. ft. each and 3 units of 200 sq. ft. each in the building proposed to be constructed by the defendants on the said property. The defendants agreed to purchase the property subject to the existing tenants and according to the plaintiffs were supposed to negotiate with the tenants/occupiers and arrive at a settlement with them at the defendants costs, charges and expenses. Under Clause 15 it was agreed that the defendants would construct transit sheds and thereafter demolish the existing structures. The tenants and the occupiers were to be accommodated in the transit shed. However, for nearly 4 months the defendants did not take any action and started delaying the project. Nothing was done by the defendants from 1986 till the year 1995. No negotiations were held with the existing tenants to enable the defendants to develop the land. Inspite of having committed all these lapses the defendants filed Suit No. 1213 of 1986 on 2nd May, 1986 in this Court alleging therein that the plaintiffs have not taken steps which were required to be taken under the Agreement. According to the plaintiffs, the allegations made in the plaint were false. Under Clause 24 of the agreement, the obligations were on the defendants to negotiate with the tenants. Since the defendants had not taken any steps in furtherance of the agreement, the plaintiffs were not in a position to obtain permission under the Urban Land (Ceiling and Regulations ) Act, 1976. A consent decree came to be passed in Suit No. 1213 of 1986. The consent decree is dated 15th July, 1986. The aforesaid decree is sought to be set aside on the ground of fraud and misrepresentation. It is stated that in the consent terms the defendants were to pay Rs. 1 lakh on or before the execution of the consent terms and to further deposit a sum of Rs. 2,37,500/- in the Court on or before 31st July, 1986. These consent terms are stated to be in addition and in clarification of the original terms incorporated in the agreement for sale dated 22nd September, 1984. The defendants had also represented that the plaintiff will be allowed to withdraw the sum of Rs. 2,37,500/- on fulfilling condition Nos. 8 and 9 of the consent terms. Under the consent terms, according to the plaintiff, the defendants had agreed to construct transit sheds wherein the existing tenants and occupants in the said plot would be shifted. It was also agreed that plaintiff No. 9 would hand over the possession of the wooden stall of the defendants after issue of I. O. D from the Municipal Corporation of Greater Bombay in respect of development of the suit property. The defendants undertook to deliver the plaintiffs 5 residential units aggregating to 1800 sq. ft. as agreed upon earlier within 18 months from the date of the issue of the commencement certificate for the entire building. It is admitted that the entire consideration money has been paid or deposited in this Court by the defendants. It is, however, stated that all other further obligations which were cast upon the defendants have not been performed. The defendants have failed to construct transit sheds. Since the defendants failed to carry out their part of the obligations the plaintiffs were constrained to terminate the agreement on 5th July, 1992. It is, however, admitted that the plaintiffs had received the I. O. D. on 30th July, 1988. The defendants had also sought possession on the basis of the said I. O. D. It is, however, stated that since the defendants failed to comply with their obligations, the plaintiffs were not able to comply with conditions mentioned in Clauses 8,9, and 10 and could not withdraw the amounts deposited by the defendants. It is further stated that although the consent terms were exchanged on 5th May, 1986, yet for six years the defendants again failed to take any action. It is further stated that the structures on the said land are in dilapidated condition. Earlier the tenants were prepared to vacate the premises in their occupation. Now, however, they are not prepared to vacate. In view of the above it is stated that the plaintiffs are entitled to get the decree set aside.

(3.) RELYING on the terms and conditions of the agreement in paragraphs 2, 3, 8, 15, 16, 21, 24, 25, 26, 29, 30 and 32, Mr. Kadam, learned Counsel appearing for the plaintiffs, submits that the obligations in the agreement were mutual. The purpose behind the agreement could only be executed if both the sides had complied with their obligations. Since no construction has been done, therefore, the plaintiffs have not received the 5 flats which the defendants had agreed to deliver to them. According to Mr. Kadam, they had complied with the various conditions contained in the agreement. Possession of the vacant piece of land has been delivered to the defendants as provided under Clause 3 of the agreement. The sale was to be completed within 12 months after securing I. O. D. and commencement certificate in terms of Clause 8 of the agreement. The defendants were entitled to demolish the existing structures and commence constructions under Clause 15. This, according to Mr. Kadam, has not been done. Clause 16 relates to delivery of possessions after the completion of the building. This obviously cannot be complied with until the building is completed. Both parties have relied on Clause 21 of the agreement. According to Mr. Kadam, by virtue of Clause 21 of the agreement, the plaintiffs had the right to require specific performance of the agreement in case of any wilful default. They, however, did not have the right to cancel or terminate the agreement in view of default in payment of money. They only had a right to recover the balance amount with interest at 12 per cent per annum from the date till payment. In view of the above it is stated by Mr. Kadam that the defendants had no right for asking for specific performance of the agreement. It is further submitted by Mr. Kadam on the basis of Clause 24 of the agreement that since defendants had taken the property subject to the rights of the existing tenants it was their obligation to negotiate with the tenants for delivery of vacant possession. This has not been done by the defendants till date. According to Mr. Kadam, even the I. O. D. and the commencement certificate were to be obtained by the defendants in view of Clause 26 of the agreement read with Clause 32. Inspite of this, it is submitted by Mr. Kadam that the plaintiffs had obtained I. O. D. on 30th July, 1988. The commencement certificate could not be obtained till date as the structures are still standing on the suit property which are in occupation of the tenants. In view of the above, it is submitted by Mr. Kadam that the consent terms have lost all relevance and, therefore, the decree passed on the basis of said consent terms deserves to be set aside. It is submitted that the consent terms and the decree are in addition to the agreement mentioned above. Since the decree based on consent terms also imposes obligations on both the parties which have not been performed by both the parties, the decree has to be set aside. It is submitted that it is in the control of the Court to see that the decree for specific performance is obeyed by complying with the conditions laid in the consent decree. For this proposition Mr. Kadam has relied upon two judgements of the Supreme Court which may be noticed. First judgement was a judgement in the case of (Chen Shen Ling v. Nand Kishore Jhajharia) A. I. R. 1972 S. C. 726. This judgement has been cited by Mr. Kadam in support of his proposition that since, the defendants themselves had not complied with the obligations which were contained in the consent decree there is no question of the Court permitting the execution of the said decree. Mr. Kadam relied particularly on the observations of the Supreme Court contained in paragraph 7 which are as under:--It is clear from what we have stated that the decree imposes mutual obligations on both the appellant and respondent in such a way that the performance by one is conditional on the performance by the other and accordingly no execution can be ordered unless the party seeking execution not only offers to perform his part but when objection was taken satisfy the executing Court that he was in a position to do so. " on the basis of this it is submitted by Mr. Kadam that the defendants have wholly failed to satisfy this Court that the defendants have not only offered to perform their part of the obligations or that he was in a position to do so. Relying on the narration of the facts above it is submitted that the tenants are still on the suit property. Therefore, the defendants are not in a position to perform their obligations under the consent decree. The next judgement relied upon by Mr. Kadam is in the case of (Hungerford Investment Trust Ltd. v. Haridas Mundhra and others) A. I. R. 1972 S. C. 1826. Mr. Kadam has relied on the observations of the Supreme Court in paragraphs 22 and 23 which are as under: "22. It is settled by a long course of decisions of the Indian High Courts that the Court which passes a decree for specific performance retains control over the decree even after the decree has been passed. In (Mahommadalli Sahib v. Abdul Khadir Saheb) 1930 (59) Mad. L. J. 351 it was held that the Court which passes a decree for specific performance has the power to extend the time fixed in the decree for the reason that Court retains control over the decree, that the contract between the parties is not extinguished by the passing of a decree for specific performance and that the contract subsists notwithstanding the passing of the decree. In (Pearisundari Dassee v. Hari Charan Mozumdar Chowdhury) (1888) I. L. R. 15 Cal. 211 the Calcutta High Court said that the Court retains control over the proceedings even after a decree for specific performance has been passed, that the decree passed in a suit for specific performance is not a final decree and that the suit must be deemed to be pending even after the decree. The same view was taken in (Someshwar Dayal v. Widow of Lalman Shah) A. I. R. 1958 All. 488. In (Anandilal Poddar v. Gunendra Kr. Roy) A. I. R. 1966 Cal. 107, Ray, J. , speaking for the Court, said that the Court retains control over the matter even after passing a decree for specific performance and that virtually, the decree is in the nature of a preliminary one. In (Tribeni Tewary v. Ramratan Nonia) A. I. R. 1959 Pat. 460 it was held that the Court retains seisin of the case notwithstanding the fact that a decree for specific performance has been passed and that the decree is really in the nature of a preliminary decree. Fry in his book (Fry on Specific Performance 6th Edn. p. 546 on Specific Performance) states the Law in England as follows:---" It may and not infrequently does happen that after judgement has been given for the specific performance of a contract, some further relief becomes necessary in consequence of one or other of the parties making default in the performance of something which ought under the judgment to be performed by him or on his part; as for instance, where a vendor refuses or is unable to execute a proper conveyance of the property, or a purchaser to pay the purchase money. . . . . . "there are two kinds of relief after judgment for specific performance of which either party to the contract may, in a proper case, avail himself: "