DIWAN RAHUL NANDA Vs. NITISH G KOTAK

JUDGEMENT

(1.) IN the draft Notice of Motion, leave under Rules 147/148 of the High Court, O. S. Rules is granted to take out the Notice of Motion in terms of the draft Notice of Motion handed in. With consent of the parties, motion made returnable forthwith. Defendants waive service. Office is directed to register the Notice of Motion. The plaintiff is given time to register the Notice of Motion by 8th December, 1997. To be heard forthwith along with the Notice of Motion No. 3239 of 1995. This order will dispose of both the Notice of Motion.

(2.) THE Notice of Motion No. 3239 of 1995 was taken out for appointment of the Receiver of the suit property and for injunction. The Notice of Motion came up for hearing on 22nd November, 1995. Ad interim injunction was granted. A perusal of the order shows that it was agreed between the parties that a sum of Rs. 19 lacs were paid by the plaintiff to the defendants on the basis of the agreement dated 26th October, 1995. In view of the above, the Counsel for the defendants made a statement at the bar after taking instructions that the defendants are willing to deposit a sum of Rs. 19 lacs in the Court within three months. It was, therefore, directed that after the said sum is deposited, the defendants shall be at liberty to apply for vacating of the order of injunction or for modification of the order. The Prothonotary and Senior Master was directed to invest the sum of Rs. 19 lacs in the Fixed Deposit with a Nationalised Bank for such a period as he deems fit. It was also directed that at the final hearing of the motion, the Court shall decide inter alia as to whether the said amount shall be continued to be remain invested or should be paid over to the defendants or should be returned back to the plaintiff. All contentions were kept open. The order also notices that in view of the statement made by the Counsel for the defendants, the Notice of Motion was not examined on merits of the rival contentions. The order was passed without prejudice to the rights and contentions of the parties at the final hearing of the motion. Thereafter it appears that the defendants did not make the payment as stipulated in the order dated 22nd November, 1995. Thereafter the Notice of Motion came up for hearing on 23rd September, 1996. In this order it is noticed that three months time had expired in February, 1996 and the defendants have not deposited a single rupee out of Rs. 19 lacs which they assured the Court to deposit within three months from the date of the order, which assurance was accepted by the Court. Thus, the plaintiff has brought the matter before the Court for further orders. Mr. Mehta, the Counsel appearing for the defendants stated that the defendants would deposit the amount on or before 31st October, 1996. The conduct of the defendants was adversely commented upon by this Court. It was observed that the conduct of the defendants can by no means be said to be praise-worthy. However, the defendants were permitted to deposit the sum of Rs. 19 lacs by 31st October, 1996, but at the same time the Court Receiver, High Court, was appointed as Receiver of the suit property in terms of prayer Clause (a), except the bracketed portion. It was, however, made clear that in the event the amount is deposited, then the aforesaid order shall automatically stand vacated. It appears again the defendants failed to comply with the aforesaid order and the matter came up for hearing on 4th November, 1996. At that stage, Mr. S. K. Jain appeared for the plaintiff and Mr. J. J. Thakkar appeared for the defendants. The defendants had taken out the draft Notice of Motion. Leave was granted to take out the Notice of Motion. Both the Counsel were heard. However, the Notice of Motion was summarily rejected in view of the earlier two orders passed by this Court.

(3.) AGGRIEVED against the said order, the defendants filed Appeal No. 1291 of 1996. The aforesaid appeal came up for hearing on 4th December, 1996. The appellants agreed to deposit the amount by 20th December, 1996. Therefore, the Receiver was directed not to take possession till then. The matter was adjourned to 20th December, 1996. The appeal came up for hearing on 23rd December, 1996. Even before the Appellate Court, the appellants have conceded the fact that the appellants had made a statement before the learned Single Judge, when the motion of the plaintiff came up for hearing initially, that the appellants would be depositing Rs. 19 lacs in the Court. Lengthy arguments were addressed by the Counsel for both the sides. The Counsel for the appellants stated that there is a serious dispute about the consideration agreed between the parties in respect of the suit flat. According to him the property is worth Rs. 1,94,00,000/- as per the Valuers report and therefore, under no circumstances, the appellants could have agreed to sell the property to the respondents at the price of Rs. 74,00,000/- only. This argument was, however, rejected because the two documents which were referred by the appellants as receipts have been executed by the appellants wherein they have admitted the receipt of the consideration of Rs. 19 lacs. It was also held that if these two documents are carefully read, they reveal that the appellants entered into an agreement without caring to fix the price for their flat. Therefore, if the appellants have chosen to enter into such an agreement and received Rs. 19 lacs without fixing the total consideration, they must suffer the consequences, viz. the consequences of dispute being properly raised by the respondents regarding the price. The second argument of the Counsel for the appellant that the consideration was at Rs. 1,94,00,000/- was also rejected. It was held that the property may be worth crores of rupees, but the owner may agree to sell it at a lesser price depending on the circumstances, the emergency and the needs of the owner. It was also observed that once a party gives an undertaking to the Court, then it cannot be permitted to go behind the undertaking and therefore, it must fulfil its undertaking given to the Court. It was also observed that in this case not only the undertaking was given, but the defendants had also sought extension in time of making the deposit. The Court also observed that the conduct of the appellants is such which raises an inference that they gave an undertaking in the Court in order to avoid the order that would have been passed against them and as such now they cannot be permitted to take a different stand. Thus, it was held that they cannot be permitted to submit that their undertaking should be dis-regarded and the Court should not pass any order against them. On that day, the Division Bench was prepared to give further time for the deposit, but the appellants expressed their inability to make the payment. Thus, it was held that "the conduct of the appellants throughout does not deserve any interference in the impugned order of the learned Single Judge and consequently, the appeal is dismissed at admission stage. The learned Counsel for the appellants applies for staying the operation of this order and for directing the Receiver not to dispossess the appellants since the appeal is dismissed summarily. Both these prayers are rejected. " Thereafter the defendants made payment of Rs. 12 lacs and took out a precipe for further time for payment of the remaining Rs. 7 lacs. By order dated 13th January, 1997, the defendants were permitted to deposit the remaining amount by 20th January, 1997. Aggrieved against the order dated 23rd December, 1996 the defendants filed Review Petition No. 2 of 1997 which was decided on 22nd January, 1997. After noticing the aforesaid facts, the review petition was allowed on condition that the defendants would deposit on or before 21st February, 1997 with the Prothonotary and Senior Master a sum of Rs. 71,000/- towards the interest on Rs. 19 lacs for the delayed deposit for a period of three months. The defendants/appellants were directed to pay costs in the sum of Rs. 10,000/- directly to the Counsel for the plaintiff. In view of the above, the impugned order dated 23rd December, 1996 was set aside. It was also directed that the Court Receiver would remain in symbolic possession of the property in dispute. He would not direct the appellants to pay any royalty or security. Thereafter the Appeal No. 1219 of 1996 came to be finally decided on 26th February, 1997. It was agreed by the Counsel for the parties that in view of the order passed in Review petition, the impugned order of the learned Single Judge dated 23rd September, 1996 is liable to be set aside. Accordingly, the said order was set aside. It was also directed that the parties are at liberty to move the Single Judge, for any further and/or other orders, if so advised. The situation as emerges is that a sum of Rs. 19 lacs together with interest has been deposited by the defendants with the Prothonotary and Senior Master, which is invested in accordance with the orders of the Court. The Receiver which was appointed in view of the infringement of the orders of the Single Judge dated 23rd September, 1996, has been discharged. But the ad interim injunction continues for not creating third party rights. The plaintiff has taken out draft Notice of Motion for permission to withdraw the suit with costs. It is also prayed that the Prothonotary and Senior Master be directed to pay the amount deposited in the Court along with interest by the defendants to the plaintiff. The prayer made by the plaintiff is vehemently opposed by the defendants. The suit has been filed for specific performance of an oral agreement for sale of the suit property by the defendants to the plaintiff. In the alternative, a prayer is made for damages in the sum of Rs. 1 crore and for the refund to the plaintiff of the amount of Rs. 20,08,616. 67 inclusive of interest on Rs. 19 lacs received by the defendants from the plaintiff under the said contract. In the plaint, it is stated that the defendants No. 1 and 3 had approached the plaintiff some time in June, 1995 with an offer to sell the suit property for a consideration of Rs. 74 lacs. The plaintiff is said to have paid in cash a sum of Rs. 1 lac on 3rd July, 1995. On 4th July, 1995, a further sum of Rs. 9 lacs was paid by cheque. On 5th August, 1995 a further sum of Rs. 10 lacs was paid by the plaintiff to the defendants. Receipts Ex. B and C, which are attached to the plaint, have been executed by the defendant No. 3, acknowledging the receipt of Rs. 19 lacs. Thereafter the plaintiff approached the defendants to complete the sale in October, 1995, so that the transaction should be complete before 30th November, 1995. On 26th October, 1995, the first defendant sent a Fax Message to the plaintiff. In this Fax Message, it is stated that the defendants were to receive a sum of Rs. 51 lacs on or before 31st August, 1995 and the balance amount was to be paid on or before 15th November, 1995. It was also stated that a number of meetings were held between the parties and the plaintiff had assured that the payment would be made. The Fax Message also records that in October, 1995, the plaintiff had conveyed to the defendants through the brokers that they are not in a position to complete the transaction due to financial constraints. In view of the above it was stated that "the deal stands cancelled as you desire and we have to forfeit the deposit given by you as agreed in view of non completion of the transaction by you. " The allegations made in this Fax Message were denied by the plaintiff through his advocate. We also claimed specific performance of the contract.