Luv Kumar Kaul v. Tosh Apartment P.Ltd. & Ors

judgment therein."

It was further observed that :- "Exposition of doctrine indicates that the need for it arises from the very nature of the jurisdiction of courts and their control over the subject matter of litigation so that parties litigating before it may not remove any part of the subject matter outside the power of the court to deal with it and thus make the proceedings infructuous."

¶30In yet another case decided by the Supreme Court entitled Rajinder Singh & Ors. v. Santa Singh & Ors., AIR 1973 SC 2537, it was held :- "The doctrine of lis pendense was intended to strike at attempt by parties to a litigation to circumvent the jurisdiction of a court, in which a dispute on right or interests in immovable property is pending, by private dealings, which may remove the subject matter of the litigation from the ambit of the court"s power to decide a pending dispute or frustrate its decree. Alienees acquiring any immovable property during a litigation over it are held to be bound by an application of doctrine, by the decree passed in the suit, even though they may not have been impleaded in it. The whole object of the doctrine of lis pendense is to subject parties to the litigation as well as others, who seek to acquire rights in immovable property which are the subject matter of a litigation, to the power and jurisdiction of the court so as to prevent the object of pending action from being defeated."

¶31This Court in Joginder Singh Bedi v. Sardar Singh & Ors., 26 (1984) DLT 162 Del (DB) and Sanjay Gupta v. Kalawati & Ors., (1992) 53 DRJ 653 followed the aforesaid principle.

¶32The conduct of Mr. Luv Kumar Kaul is also not above board and, therefore, his so-called interest has to be ignored while confirming the orders of appointment of Receiver passed by the learned Single Judge. It appears that he has taken advantage of the weaknesses of defendant No.1 who, during his lifetime, acted in contradictory manner at the instance of one person or the other. Mr. Kaul came into possession of the suit property as a caretaker when, according to him, the so-called remuneration fixed for him for getting the premises vacated from the Embassy of Sudan were not paid. As per Mr. Kaul, whopping consideration of Rs.4 crores was agreed for this purpose that too way back in the year 1992. Various kinds of pleadings filed by the defendant No.1 admitting the claims of Mr. Kaul throw suspicion about the voluntary nature of those pleadings/admissions. More importantly, it needs to be highlighted that with the passage of time claims of Mr. Kaul kept on increasing in geometrical progression. What started with a claim of Rs.4 crores in the year 1992 (which was in any case very huge even at that time) has touched a startling figure of Rs.200 crores (approx.) today. All types of possible rights are asserted over the property by him. He claims to be a tenant and also in possession of the property as a mortgagee. However, apart from self-serving admissions in the pleadings, which he got from defendant No.1, there is no valid document in his favour on the basis of which, prima facie, he can assert any right, title or interest in the suit property. Fifteen years have passed since the suit

was filed. Proceedings are delayed on one account or other and because of various developments which took place in the intervening period, as narrated above, the suit has not been decided so far. In case the suit is ultimately decreed in favour of the plaintiff/Tosh Apartments, it may even become difficult to reap the fruits thereof in case the property is tossed between Mr. Kaul, Vidur Impex & Traders and others or Bhagwati Developers for that matter. That is yet another justification for maintaining the order of appointment of the Receiver.

¶33In this behalf, we agree with the submission of Mr. Singhvi, learned senior counsel for the plaintiff, that in a suit for specific performance, the court has ample power and jurisdiction to appoint a receiver. In Kerr on Receivers 16th Edition (on page 58), it has been laid down that if a fair prima facie case for the specific performance of a contract is made to appear, the court may interfere upon motion and appoint receiver. In Foot Note No. 37, reference has been made to case law including C Kennedy v. Lee (1870) 3 MER 441, M. Cloud v. Phelp, (1838) 2 JUR 962. The appointment may be made in such circumstances before the order for a sale is made absolute. (Re: Stephard, (1892) 31 1R 95).

¶34In "Law On Receivers" by S.K. Bose, 3rd Edn. (page 593, para 624), it has been laid down that :- "In a suit for specific performance of agreement of sale a receiver can be appointed when the plaintiff has a good prima facie case and the circumstances justify it."

¶35In Halsbury"s Laws of England, Vol. 44(1), 4th Edn. (Re-Issue), in para 931 (at page 545), it has been laid down that :- "The Court has power to make an interlocutory order to enforce the performance of a contractual obligation. In a purchaser action, the defendant may be restrained in injunction from disposing of the property or creating rights over it inconsistent with the terms of the contract. The defendant may also be restrained by injunction from damaging the subject matter of the contract or taking it out of jurisdiction. The court has power to make an order of detention or preservation of any property which is the subject matter of the action or for the inspection of any such property in the possession of a party. If it is necessary for the preservation of the property, the court may appoint some person to act as a receiver pending the determination of the proceedings. If the subject matter of the sale is the property (such as farm land) which needs to be worked in order to prevent deterioration, the receiver may also be appointed to act as a manager."

¶36In Halsbury"s 4th Edn. (Re-Issue) Vol. 39(2) in para 330, it has been laid down as follows :- "In an action for specific performance or recession of a contract for the sale of land and especially for mining property, a receiver and if necessary a manager is frequently appointed to preserve the property until the right is decided."

¶37In American Jurisprudence (Vol.75) Corpus Juris Secundrum (in para 7), it is held as under :- "Generally receiver may, in proper case, be appointed in an action involving real property, such as an action for partition, specific performance."

¶38It is also necessary to mention here that the instant suit is of specific performance filed by the plaintiff on the basis of agreement dated

13.9.1988 executed in its favour by the defendant No.1. Mr. Luv Kr. Kaul is staking his claim qua that property on different grounds that cannot be the subject matter of these proceedings in which Tosh Apartments is the plaintiff. Mr. Kaul can assert his rights, if any, by

way of independent and substantive proceedings. We may also clarify that observations made in this order qua Mr. Kaul are totally tentative keeping in view only the nature of the suit filed by Tosh Apartments and these observations would not come in the way of Mr. Kaul in the independent proceeding, if he chooses to institute the same.

For this reason, even the amendment sought by Mr. Kaul appears to be unnecessary and not relevant, keeping in view the nature of suit filed by Tosh Apartments. In these proceedings, Mr. Kaul cannot assert his rights on the basis he wants to do.

¶39For this reason, as well as other reasons given by the learned Single Judge, we affirm the order of rejection of the amendment application as well. As a result, these appeals are dismissed.

¶40FAO (OS) No. 324/2008

This appeal is filed by Vidur Impex & Traders and five others against orders dated 26.5.2008 passed by the learned Single Judge whereby their application for impleadment in the suit has been dismissed by the learned Single Judge. These six appellants are the same persons who alleged that six agreements to sell dated

20.5.1997 in respect of the suit property were executed in their favour by the defendant No.1.

¶41It is not necessary to repeat the facts, which we have already taken note of, including the fact that thereafter these six appellants entered into an agreement to sell with Bhagwati Developers, on the basis of

which consent award was passed and execution filed by Bhagwati Developers in the Calcutta High Court. In the application filed by the appellants for impleadment in the year 2008 (IA No. 1861/2008), they averred that they became aware of the injunction orders passed in the suit only after orders were passed by the Calcutta High Court in the execution petition filed by Bhagwati Developers. Their application was contested by Tosh as well as LRs of the defendant No.1.

¶42The learned Single Judge has dismissed the application primarily on the ground that in a suit for specific performance filed by Tosh Apartments against the defendant No.1, predicated on agreement dated 13.9.1988, these appellants, being third party or stranger to the said contract/agreement, could not claim impleadment. It is also recorded that the purported sale transactions by the defendant No.1 in favour of these appellants was after the injunction order passed against defendant No.1 and Mr.Luv Kumar Kaul. It also noted that on 22.1.2001, the said defendants were restrained from delivering possession of the suit property to these very appellants (respondent Nos. 3 to 8 in the application in which orders were passed). The learned Single Judge took note of judgments of the Supreme Court, as per which under these circumstances these appellants could not be impleaded as defendants, which can be found from the following discussion :-

"18. The applicants are correct in their submission that in Kasturi"s case, the Supreme Court considered as to who would be necessary parties in a suit for specific performance.

Although, there are some observations in the decision which seem to favour the applicants, at the same time, the Court after noticing previous judgments, particularly, Anil Kumar singh vs. Shivnath Mishra, (1995) 3 SCC 147, Vijay Pratap v. Sambhu Saran Sinha, (1996) 10 SCC 53 held that a third party or a stranger to a contract cannot be added to the proceeding so as to convert its character into a suit of different character. The Court further held that in a proceeding for specific performance adjudication of collateral matters should not be permitted, so as to change the nature of the proceeding into a complicated suit for title between the plaintiff and others, who were not parties to the contract for specific performance, but claimed to have acquired title subsequently. Therefore, this court is of the opinion that the Supreme Court in Kasturi"s case did not uphold a broad proposition that every subsequent purchaser of property, which in a matter of suit for specific performance of a contract, is a necessary party.

¶19The decisions in Bibi Zubaida Khatoon and Surjit Singh are in this context of some significance. Bibi Zubaida Khatoon was a case where during pendency of the suit for specific performance the vendor sold the property without seeking leave of the Court. The Court upheld the rejection of application (for impleadment of the transferee) by the trial court as affirmed by the High Court on the ground that a transferee pendente lite cannot, as of right, seek impleadment as a party in such suit unless the sale was preceded by leave of Court. Surjit Singh was a suit for partition where the Court had restrained all parties alienating or otherwise transferring a suit property. Contrary to that order, one of the parties sold his share. The assignee sought impleadment in the suit. The Court, although dealing with the issue under Order XXII Rule 10 CPC made observations which are quite apt in the present context :

"In defiance of the restraint order, the alienation/ assignment was made. If we were to let it go as such, it would defeat the ends of justice and the prevalent public policy. When the Court intends a particular state of affairs to exist while it is in seisin of a lis, that state of affairs is not only required to be maintained, but it is presumed to exist till the Court orders otherwise. The Court, in these circumstances has the duty, as also the right, to treat the alienation/assignment as having not taken place at all for its purposes. Once that is so, Pritam Singh and his assignees, respondents herein, cannot claim to be impleaded as parties on the basis of assignment. Therefore, the assignees-respondents could not have been impleaded by the trial court as parties to the suit, in disobedience of its orders. The principles of lis pendens as altogether on a different footing. We do not propose to examine their involvement presently. All what is emphasized is that the assignees in the present facts and

circumstances had not cause to be impleaded as parties to the suit."

¶20The cumulative sequence of events noticed above leads this Court to conclude that the vendor P.K. Khanna allegedly sold the properties in 1997. The applicants also claim as such. They were aware about the existence of this suit if not in 1999 at least from 2001 onwards, when they were made parties in an application and subject to an injunction. Their conduct in approaching, for impleadment, now seven years later, cannot be countenanced. That apart, as held in Kasturi"s case their impleadment would completely alter the nature of the suit which was instituted in 1993 for specific performance of a contract, of 1988."

¶43Mr. Dushyant Dave, learned senior counsel for the appellants, referred to the orders dated 22.1.2001 passed in IA No. 625/2001 whereby injunction orders were passed against the present appellants as well. Similarly, in IA No. 9576/2001, the learned Single Judge had issued direction against the appellants to deposit the title deeds. On this basis, he argued that it clearly showed that even as per the respondents, the appellants were necessary parties. He also cited the following judgments of the Supreme Court in support of his submission :-

(i) Khemchand Shankar Choudhari & Anr. v. Vishnu Hari Patil & Ors.

(1983) 1 SCC 18

(ii) Ramesh Hirachand Kundanmal v. Municipal Corpn. of Greater Bombay & Ors.

(1992) 2 SCC 524

(iii) Razia Begum v. Sahebzadi Anwar Begum & Ors.

AIR 1958 SC 886

¶44We are of the opinion that order of the learned Single Judge does not need any interference and in the circumstances of this case the trial court rightly refused the prayer of the appellants to implead

themselves as parties in the suit. Our conclusion is based on the following reasons :-

(a) Even as per the version of the appellants, they have further sold the property to Bhagwati Developers and, therefore, as of today, they have no direct or commercial interest left in the property.

(b) They never approached earlier for their impleadment and application was filed only in the year 2008, by which date they had, as per their own showing, lost interest in the suit property.

(c) Defendant No.1 purportedly sold the property in their favour even when there was an injunction order. In these circumstances, it cannot be said that they were the bona fide purchasers.

In Surjit & Ors. etc. etc. v. Harbans Singh & Others etc. etc., JT 1995 (6) SC 415, the Supreme Court, in similar circumstances observed as under :- "4. …..In sum, it did not make any appreciable difference whether the property per see had been alienated or a decree pertaining to that property. In a defiance of the restraint order, the alienation/assignment was made. If we were to let it go as such, it would defeat the ends of justice and the prevalent public policy. When the Court intends a particular state of affairs to exist while it is in seizing of a lis, that state of affairs is not only required to be maintained, but it is presumed to exist till the court orders otherwise. The court in these circumstances has the duty as also the right to treat the

alienation/assignment as having not taken place at all for its purposes …."

To the same effect is the judgment of this Court in Sanjay Gupta v. Smt. Kala Wati, 85 (2000) DLT 828, and following observations contained therein need a mention :-

"15. …..it is immaterial whether the alieneee pendent lite had or had no notice of the pending proceedings. Nor is it necessary that the alienee must be impleaded as a party to the suit. Such transferee has no prior equity nor any pre-existing right ….."

¶16The broad purpose of Section 52 is to maintain the status quo unaffected by the act of any party to the litigation pending its determination [Gauri Dutt Maharaj v. Sukur Mohammad, AIR 1948 PC 149 and Joginder Singh Bedi (supra)]. Section 52 placed a complete embargo on the transfer of immovable property right which is directly and specifically in question in a pending litigation and applies irrespective of the strength or weakness of the case on one side or other (Kedarnath v. Sheonarain, AIR 1970 SC 1717)"

¶45Insofar as orders passed by this Court in IA No. 625/2001 and IA No. 9576/2001 are concerned, those applications were moved when the plaintiff/Tosh Apartments came to know that in spite of the injunction orders, the defendant No.1 wanted to fritter away the property and created third party interest and since such a move on the part of the defendant No.1 was in favour of these appellants, in order to secure effective implementation of the injunction order passed earlier, these appellants were made respondents for limited purpose. That would not mean that in a suit for specific

performance of agreement to sell, in which these appellants are the strangers, they will have any right or so.

¶46We, therefore, do not find any merit in this appeal and dismiss the same with costs.

(A.K. SIKRI) JUDGE

(MANMOHAN SINGH) JUDGE

February 20, 2009 nsk

Unreportable * IN THE HIGH COURT OF DELHI AT NEW DELHI + FAO (OS) No. 400 of 2007 FAO (OS) No. 514 of 2007 and FAO (OS) No. 324 of 2008 % Reserved on : November 18, 2008 Pronounced on : February 20, 2009 1. FAO (OS) No. 400/2007 Luv Kumar Kaul . . . Appellant through : Mr. P.S. Patwalia, Sr. Advocate with Mr. Amit Kumar, Mr. Ritesh Ratnam and Mr. Sumesh C. Jha, Advocates. VERSUS Tosh Apartments Pvt. Ltd. & Ors. . . . Respondents through : Dr. A.M. Singhvi and Mr. Sanjay Jain, Sr. Advocates with Mr. Mahendra Rana and Mr. M.S. Vinayak, Advocates for the respondent No.1/Tosh. Mr. Yakesh Anand with Mr. Sanjeev Anand, Mr. Kajal Chandra and Mr. Murari Kumar, Advocates for respondent No.2. Mr. Arjun Pant, Advocate for the respondent No.3. 2. FAO (OS) No. 514/2007 M/s. Bhagwati Developers Pvt. Ltd. . . . Appellant through : Mr. C. Mukund with Mr. Shashank Sharma, Advocates. VERSUS Tosh Apartments Pvt. Ltd. & Ors. . . . Respondents through : Dr. A.M. Singhvi and Mr. Sanjay Jain, Sr. Advocates with Mr. Mahendra Rana and Mr. M.S. Vinayak, Advocates for the respondent No.1/Tosh. Mr. Yakesh Anand with Mr. Sanjeev Anand, Mr. Kajal Chandra and Mr. Murari Kumar, Advocates for respondent No.2. Mr. Arjun Pant, Advocate for the respondent No.3. Mr. P.S. Patwalia, Sr. Advocate with Mr. Amit Kumar, Mr. Ritesh Ratnam and Mr. Sumesh C. Jha, Advocates for respondent No.4. 3. FAO (OS) No. 324/2008 Vidur Impex & Traders Pvt. Ltd. . . . Appellant through : Mr. Dushyant Dave with Mr. Sandeep Sethi, Sr. Advocates Mr. Ashok Jain and Mr. Amit Kasera, Advocates VERSUS Tosh Apartments Pvt. Ltd. & Ors. . . . Respondents through : Dr. A.M. Singhvi and Mr. Sanjay Jain, Sr. Advocates with Mr. Mahendra Rana and Mr. M.S. Vinayak, Advocates for the respondent No.1/Tosh. Mr. Yakesh Anand with Mr. Sanjeev Anand, Mr. Kajal Chandra and Mr. Murari Kumar, Advocates for respondent No.2. Mr. Arjun Pant, Advocate for the respondent No.3. Mr. P.S. Patwalia, Sr. Advocate with Mr. Amit Kumar, Mr. Ritesh Ratnam and Mr. Sumesh C. Jha, Advocates for respondent No.4. Mr. C. Mukund with Mr. Shashank Sharma, Advocates for the respondent No.5. CORAM :- THE HON"BLE MR. JUSTICE A.K. SIKRI THE HON"BLE MR. JUSTICE MANMOHAN SINGH 1. Whether Reporters of Local newspapers may be allowed to see the Judgment? 2. To be referred to the Reporter or not? 3. Whether the Judgment should be reported in the Digest? A.K. SIKRI, J. 1. Against the order dated 3.9.2007 passed by the learned Single Judge, these appeals have been preferred by different parties, though their grievance is not the same. It is for this reason that these appeals were heard together, which we are deciding by this common judgment. 2. Before we mention the applications in which the impugned order is passed, it would be necessary to give the narration of the pleadings in the main suit and the manner it has progressed in the last 15 years, as the suit was filed way back in the year 1993. 3. M/s. Tosh Apartments Pvt. Ltd. (respondent No.1 in these appeals) is the plaintiff in the original Suit No. 425/1993. It has filed this suit for specific performance, damages and injunction. Specific performance of Agreement to Sell dated 13.9.1988 between the plaintiff and Shri Pradeep Khanna (defendant No.1 in the suit and since deceased) is sought. Other two persons arrayed as defendants in the said suit are Shri Arun Kumar Bhatia as the defendant No.2 and Shri Luv Kumar Kaul as the defendant No.3. For the sake of clarify and to avoid any confusion, we are maintaining the same nomenclature as appear in the suit by describing the aforesaid parties as plaintiffs, defendant No.1, defendant No.2 and defendant No.3 respectively. We may, however, point out that the LRs of Shri Pradeep Khanna have been brought on record and the expression defendant No.1 would include reference to them as well. 4. As per the averments made in the plaint, vide aforesaid agreement dated 13.9.1988, property bearing No. 21, Aurangzeb Road, New Delhi, constructed on a plot