VEERPRABHU PROJECTS PVT. LTD. & ORS. vs JAYANT JAIN & ORS.
$~1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 11.09.2024
+ CS(COMM) 1118/2018
VEERPRABHU PROJECTS PVT. LTD. & ORS.
…..Plaintiffs
Through: Mr.Sanjeev Sahay, Ms.Shagun Saproo and Mr.Karandeep Singh, Advs.
versus
JAYANT JAIN & ORS. …..Defendants
Through: Mr.K.K. Sharma, Sr. Adv. with Mr.Vikas Sethi, Mr.Roshan Santhalia and Mr.Ram Pravesh Rai, Advs. for D-1& D-2
CORAM:
HON’BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (ORAL)
I.A. 12574/2018
1. This is an application seeking condonation of delay in re-filing of the suit.
2. The application is allowed.
I.A. 12681/2019
3. This is an application seeking condonation of delay in filing of the reply to the application under Order XXXIX Rules 1 & 2 of the Code of Civil Procedure, 1908 (in short, CPC).
4. The reply is taken on record. The application is, accordingly, disposed of.
I.A. 12573/2018
5. As the learned counsel for the plaintiffs does not press this application, the same is dismissed.
I.A. 12571/2018 & I.A. 5675/2019
6. As the learned counsel for the plaintiffs does not press these applications at this stage, the same are dismissed.
I.A. 808/2020
7. As the learned senior counsel for the defendant nos.1 and 2 does not press this application, the same has been rendered infructuous and is disposed of.
I.A. 7199/2019
8. This application has been filed by the defendant nos.1 and 2 under Order VII Rule 11 of the CPC praying for rejection of the plaint inter alia on the following three grounds:
a) That the suit has been improperly valued for the purposes of Court fee, and proper Court fee has not been affixed;
b) That the relief claimed in the present suit has also been claimed by the plaintiffs in an Execution Petition, being Execution Case No.873/2015, titled as Suresh Kumar Jain & Ors. v. Madanlal Jain & Ors, filed by the plaintiffs and pending adjudication before the High Court of Calcutta; and,
c) That the plaintiffs had earlier filed a suit, being CS No. 860/2017, before the Court of the learned District Judge, Patiala House Courts, praying simply for a decree of an injunction. Therefore, the present suit, which prays for not only the cancellation of the Sale Deed but also possession of the suit property, is barred under Order II Rule 2 of the CPC.
9. The learned senior counsel for the defendant nos.1 and 2, in elaboration of the above contentions, submits that the plaint itself discloses that the Sale Deed of which cancellation is being prayed for, is for a sale consideration of Rs.10.50 crores. He submits that, therefore, the valuation of the suit at Rs.2,00,00,001/- by the plaintiffs is completely arbitrary and the plaintiffs have not affixed proper court fee.
10. He further submits that in the execution petition filed by the plaintiffs before the High Court of Calcutta, the plaintiffs have inter alia prayed for the learned Executing Court to direct the defendants to hand over the possession of the property in question, that is, 9, Hanuman Road, Connaught Place, New Delhi, to the plaintiffs. Having prayed that relief in the execution petition, the plaintiffs cannot multiply litigations by filing the present suit.
11. He submits that, in fact, even the earlier suit filed by the plaintiffs, that is, CS No. 860/2017 before the learned District Judge at Patiala House Courts, was rejected under Order VII Rule 11 of the CPC, by an Order dated 27.10.2018 passed by the learned Civil Judge, holding that since the matter is pending before the High Court of Calcutta, the District Court does not have the jurisdiction to decide the title of the plaintiffs or the defendants over the suit property and cannot grant any relief as pleaded by the plaintiffs therein.
12. The learned senior counsel for the defendants/applicants further submits that the plaintiffs had filed the earlier suit, being CS No. 860/2017, only praying for a decree of injunction restraining the defendants from entering the suit property. He submits that, in the present plaint, the plaintiffs have admitted that the fact of the defendants being in possession of the suit property came to the knowledge of the custodian appointed in the arbitration proceedings, at least in November, 2015. In spite of the same, the plaintiffs never prayed for a decree of possession nor challenged the Sale Deed in the earlier suit. He submits that, therefore, the present suit is barred by Order II Rule 2 of the CPC.
13. The learned senior counsel for the defendants/applicants submits that, in fact, the defendants had filed a complaint with the police, based whereon, an FIR No.0129 at Police Station: Connaught Place was also registered on 07.08.2013 against the plaintiffs and in which the plaintiff no.2 has been made an accused and a charge-sheet already stands filed therein. He submits that, therefore, the plaintiffs were aware that the defendants are claiming possession over the suit property, since way back in 2013. In spite of the same, they, in the earlier suit, did not claim a relief for cancellation of the Sale Deed or of possession, therefore, the said reliefs are barred under Order II Rule 2 of the CPC.
14. On the other hand, the learned counsel for the plaintiffs submits that it is the case of the plaintiffs that the parties, who are brothers, had handed over all their properties and other assets in the custody of a custodian on 17.12.2013. Prior thereto, an Award dated 03.01.2013 had been passed whereunder the plaintiff no.2 was held entitled to the ownership of the suit property, and the property was stated to be in the name of the plaintiff no.1. It is in the execution of this Award, that the abovementioned execution petition has been filed in the High Court of Calcutta. In the execution petition, however, the defendant no.2 pleaded that she was entitled to the suit property and the plaintiff no.1 was only a lessee in the same. The plaintiffs carried out an inspection of the property documents, and as the custodian had stated that in November, 2015 the defendants had taken over the possession of the suit property, the plaintiffs filed a suit, being CS No.860/2017, seeking injunction against the defendants. In the said suit, the defendant no.2 again pleaded ownership of the property, whereafter the plaintiffs carried out another inspection of the property documents and found out about the alleged Sale Deed.
15. He submits that the Sale Deed is shrouded by circumstances which would clearly show that it is a forged and fabricated document and no part of consideration has, in fact, flown to the plaintiffs. He submits that even the Board Resolution based whereon the Sale has been executed, is a forged document. It is with these allegations that the present suit has been filed by the plaintiffs.
16. He submits that, in fact, the plaintiffs have also filed complaints with the police, based whereon an FIR was registered and now a charge-sheet stands filed against the defendants alleging forgery of the documents.
17. He submits that the suit is, therefore, properly valued; the execution proceedings pending before the High Court of Calcutta cannot be a bar on the maintainability of the present suit; and provisions of Order II Rule 2 of the CPC would not apply.
18. I have considered the submissions made by the learned counsels for the parties.
19. In the plaint, the plaintiffs have inter alia pleaded as under:
20. That the plaintiffs becoming aware of such illegal occupation and trespass over the suit property by the defendant nos. 1 and 2, found out from its own resources few important facts which the plaintiffs want to bring before the Honble Court.
The relevant facts are as follows:
i. M/s. LMJ Projects Pvt. Ltd. from its own funds bought the suit property being Premises No. 9, Hanuman Road, New Delhi – 110001 from Mrs. Prabha Agarwal by way of a Deed of Conveyance dated 21st July, 2004 has already been annexed hereto. In terms of the said Deed of Conveyance, M/s. LMJ Projects Pvt. Ltd. (presently M/s. Veerprabhu Projects Pvt. Ltd.) became the absolute owner of the suit premises, which has by way of the Arbitral Award has been transferred to the Suresh Kumar Jain Group (SKJ).
ii. The said suit property was fraudulently and illegally purchased by the defendant no.2 by way of a sale deed dated 22nd November, 2012 which was allegedly registered in the office of Sub-Registrar, New Delhi as document no. 24.186 in Book No. 1, Volume No. 4,602 on pages 188-196 dated 22nd November, 2012 wherein M/s. LMJ Projects Pvt. Ltd. stood as vendor and defendant no. 2 stood as vendee. The plaintiffs have obtained a certified copy of the same from concerned authority and a copy of the said alleged sale deed dated 22nd November, 2012 is annexed hereto and marked as Annexure A/9.
iii. That during November, 2012 the plaintiff no. 1 company was jointly controlled by the two groups and as such plaintiff nos. 2 and 3 were also the directors of the said company at that point of time. But to the shock and dismay, the plaintiffs have found out that the suit property which belongs to the plaintiff no. 1, was fraudulently sold to the defendant no. 2 behind the back of the plaintiff nos. 2 and 3. It further transpired from the said alleged sale deed dated 22nd November, 2012, that one Mr. Dilip Kumar Jain, s/o Sri Pannalal Jain signed in the said sale deed as the authorized signatory of the plaintiff no. 1 company by an alleged Board Resolution dated 9th July, 2012. The plaintiff nos. 2 an3 further state that as per to their personal knowledge being in the board of plaintiff no. 1 as the Directors at that point of time, no such Board Meeting was ever held authorizing Mr. Dilip Kumar Jain to sale of the said property on behalf of the company.
iv. That in spite of such illegal and fraudulent sale, the total sale consideration of Rs. 10,50,00,000/- as mentioned in the sale deed, was never got credited to the official bank account of the plaintiff no. 1 company being handled at Canara Bank, Chowringhee Branch, Kolkata and Induslnd Bank, Kolkata having A/c no. 0145201003109 and A/c no. 200001945953 respectively. A copy of the relevant bank statement of the said account of plaintiff no. 1 is annexed hereto and marked as Annexure A/10. A copy of the bank statement of the account maintained at the Indusind Bank is annexed hereto and marked as Annexure A/ I0A.
ivA. The plaintiffs state that several vital documents had been fabricated in the process of the execution of the fraudulent sale deed. The Board Resolution dated 9th July, 2012 authorizing the Mr. Dilip Kumar Jain to sell the subject property on behalf of the Plaintiff No. 1 company was a fabricated and manufactured document.
ivB. The plaintiffs further state that since the entire sale proceedings took place behind the back of the plaintiffs, the Respondent Nos. 1 and 2 illegally and by way of fraudulent means opened a new bank account in the name of the Plaintiff No. 1 company, apart from the existing official bank accounts of the Plaintiff No. 1. The details of the said purported bank account are as follows:
Name of the bank – HDFC Bank
Account Number: 16592320000238
Branch name : Parliament Street
The Defendant No. 2 also opened an another bank account in her name just for the illegal transaction out of the alleged sale deed. The details of the said purported bank account are as follows:
Name of the bank – Axis Bank
Account Number: 119010100104951
Branch name: Vasant Kunj
ivC. Since the Defendant No. 2 did not possess the amount of money required for the purported sale consideration amount, as a part of the conspiracy, Rs. 13.50 crore was transferred from the account of LMJ Logistics Limited, a company controlled by the MLJ Group, to the new purported bank account of the Defendant No. 2.
ivD. The same money was transferred to the purported new illegal account of the Plaintiff No. 1, opened by the Defendant Nos. 1 and 2, as the sale consideration amount of the purported sale deed.
ivE. The defendants further siphoned the entire sale consideration money received in the new purported account of the Plaintiff No. 1 to two different companies and the same was again routed back to LMJ Logistics Ltd.
ivF. The Defendant Nos. 1 and 2 never disclosed the purported new bank account of the Plaintiff No. 1 to the custodian while handing over the assets related to the properties of the Plaintiffs by the MLJ group.
v. The plaintiffs state, that the alleged sale was taken place behind the back of the plaintiffs, and the plaintiffs had no knowledge of the same. Even in the balance sheet of the plaintiff no. 1 for the financial year 2012-2013 will not reflect the said alleged sale, as that was never brought to the knowledge of the said company. That the plaintiffs further state that the sale consideration amount involved in the said fraudulent sale was never credited in the bank account of plaintiff no. 1 and as such the same was never reflected in any balance sheet of plaintiff no. 1 company in the subsequent years. Copies of the balance sheet of the plaintiff no. 1 for the financial years 2012-13 and 2016-17 are annexed hereto and collectively marked as Annexure A/11.
vA. The Defendant Nos. 1 and 2 had made duplicate keys of the said property in question and by using that, they had been trespassing into the said property ever since.
vB. In or around June, 2018 the Plaintiff No. 2 started getting information from various sources and ex-employees of the LMJ Logistics Pvt. Ltd. that the said subject property had been sold to the Defendant No. 2 and the same had also been mortgaged to banks.
vC. That upon receiving such information, the Plaintiffs got panicked and started to look around for the confirmation of the same. During such time, while the Plaintiffs were trying to find the authenticity of the information, for the first time came to know from the online search on Delhi Online Registration System, Government of NCT of Delhi on 19.06.2018 which disclosed that the said property had been sold. It has also come to the knowledge of the Plaintiffs that the Defendant Nos. 1 and 2 on their official website have illegally posted their official address as 9, Hanuman Road, New Delhi, i.e. the said property.
vi. That after fraudulently purchasing the suit properly defendant no. 2 availed financial assistance on personal capacity from Indiabulls Housing Finance Ltd. on 1st April, 2016 wherein the suit property was
fraudulently kept as security against the loan of Rs.6.50 crore (Rupees Six Crore Fifty Lakh). Copy of the document obtained from the official website of Delhi Online Registration Information System evidencing such is annexed hereto and marked as Annexure A/12.
vii. Even after that defendant no. 2 availed financial assistance from PNB Housing Finance Ltd. having its registered office at 9th Floor, Antriksh Bhawan, Kasturba Gandhi Marg, New Delhi and its one of the branch offices at S-8, Uphar Cinema Complex, Green Park Extension, New Delhi – 100016 to the tune of Rs.6,50,00,000/- (Rupees Six Crore Fifty Lakh only) wherein the same suit property was again fraudulently kept as security against such loan. Copies of the search report obtained by the plaintiffs from the official website of the Delhi Online Registration Information System is annexed hereto and marked as Annexure A/13.
viii. The plaintiffs have acquired knowledge from its various sources that the defendant no. 2 for availing such financial facilities from PNB Housing Finance Ltd. fraudulently entered into a Mortgage Deed with the PNB Housing Finance Ltd mortgaging the suit premises as security against the said loan. The plaintiffs crave leave to refer to the said document at the time of hearing if necessary.
ix. That the defendant nos. 1 and 2 filed a frivolous First Information Report (FIR) dated 12th October, 2014 before the Vasant Vihar Police Station stating the loss of the original deed dated 21st July, 2004 in relation to the suit property which the plaintiffs have obtained from its various sources whereas the original property papers were kept with the custodian with the owner being stated as LMJ Projects Pvt Ltd. A copy of the said frivolous FIR dated 12th October, 2014 is annexed hereto and marked as Annexure A/14.
x. The plaintiffs from its various sources have come to know that the defendant nos. 1 and 2 alongwith proforma defendant nos. 4, 5, 7 and 8 recently sought for financial assistance from HDFC Ltd. having its office at the Capital Court, Olof Palm Marg, Munirka, New Delhi – 110067 at the tune of Rs. 10 crore. Plaintiffs crave leave to rely on supporting documents in regard to that at the time of hearing if necessary.
xA. In order to keep the illegal sale of the said Property camouflaged, the Defendants deliberately would not disclose the material particulars of the said illegal sale or the alleged Sale Deed in any of the proceedings. Plaintiffs place reliance to Reply Affidavit filed by the Defendants in the Execution Proceedings before Calcutta High Court and the Application under Order 7 Rule 11 of Code of Civil Procedure, 1908 filed by the Defendants before the Civil Court at Patiala House, Delhi. Defendants deliberately kept the material facts concealed, even after the Plaintiffs denied such sale in the above said proceedings. Fraud committed by the Defendants is writ large. Plaintiffs have become owner of the said Property in terms of the said Arbitral Award. Defendants deliberately did not disclose the said illegal sale of the said Property during the Arbitral Proceedings with criminal motives to cause wrongful loss to the Plaintiffs and the Company, while wrongful gain to the Defendants.
xB. The actual date of knowledge of all the above said fraud committed by the Defendants in collusion and conspiracy with others came to the knowledge of the Plaintiffs after June2018. Defendants have committed worst kind of economic crime by fabricating documents of the said Plaintiff Company, illegally transferring the said Property in the name of Defendant No. 2 and thereafter siphoning the sale consideration from the newly opened Bank Account of the said company and there after encumbering the said Property by creating mortgage. After getting the knowledge of all these criminal activities, the Plaintiffs have filed a Complaint with Economic Offence Wing, Delhi, stating all the facts. Contents of the said Complaint, be read as part and parcel of the present case.
20. From a reading of the above, it would be evident that the plaintiffs have averred that the alleged Sale Deed dated 22.11.2012 is not executed pursuant to any authority given by the plaintiff no.1. It has further been alleged that the sale consideration mentioned in the Sale Deed was never credited to the official bank account of the plaintiff no.1, and that several documents were fabricated in the process of the execution of the said Sale Deed. Based on the said averments, the plaintiffs inter alia have prayed for a decree of declaration that the Sale Deed dated 22nd November, 2012 is null and void. Based on the above pleading, the plaintiffs have prayed for the following reliefs in the suit:-
a) Pass an order of declaration declaring the alleged Sale Deed dated 22nd November, 2012 as null and void.
b) Pass an order declaring the plaintiff no. 1 as the legal and rightful owner of the suit property.
c) Pass a Decree of Recovery of Possession of the property no. 9, Hanuman Road, New Delhi -110001 on 21st July, 2004 in favour of the Plaintiff and against the Defendants.
d) Pass a decree of perpetual injunction restraining the Defendants from selling/transferring the title of the suit property and/or
e) Pass a decree of perpetual injunction restraining the Defendants from creating any further encumbrances/mortgaging the suit property, and/or
f) Pass a decree of perpetual injunction restraining the Defendants from creating any form of third party interest over the suit property, and/or
g) Appoint a Receiver over the suit property to take over physical possession thereof and hold the same till the disposal of the instant suit and/or
ga. Pass an order for occupational charges at Rs. 5,00,000/- per month to be paid by the Defendants from the day of illegal occupation till handing over of the possession to the Plaintiffs
21. Once the plaintiffs have taken this plea, they are not bound by the sale consideration mentioned in the Sale Deed, nor are to value the suit or pay the court fee at the sale consideration mentioned in the Sale Deed. I may draw reference to the judgment of the Supreme Court in Suhrid Singh alias Sardool Singh v. Randhir Singh and Others, (2010) 12 SCC 112, wherein it is held as under:
7. Where the executant of a deed wants it to be annulled, he has to seek cancellation of the deed. But if a non-executant seeks annulment of a deed, he has to seek a declaration that the deed is invalid, or non est, or illegal or that it is not binding on him. The difference between a prayer for cancellation and declaration in regard to a deed of transfer/conveyance, can be brought out by the following illustration relating to A and B, two brothers. A executes a sale deed in favour of C. Subsequently A wants to avoid the sale. A has to sue for cancellation of the deed. On the other hand, if B, who is not the executant of the deed, wants to avoid it, he has to sue for a declaration that the deed executed by A is invalid/void and non est/illegal and he is not bound by it. In essence both may be suing to have the deed set aside or declared as non-binding. But the form is different and court fee is also different. If A, the executant of the deed, seeks cancellation of the deed, he has to pay ad valorem court fee on the consideration stated in the sale deed. If B, who is a non-executant, is in possession and sues for a declaration that the deed is null or void and does not bind him or his share, he has to merely pay a fixed court fee of Rs. 19.50 under Article 17(iii) of the Second Schedule of the Act. But if B, a non-executant, is not in possession, and he seeks not only a declaration that the sale deed is invalid, but also the consequential relief of possession, he has to pay an ad valorem court fee as provided under Section 7(iv)(c) of the Act.
8. Section 7(iv)(c) provides that in suits for a declaratory decree with consequential relief, the court fee shall be computed according to the amount at which the relief sought is valued in the plaint. The proviso thereto makes it clear that where the suit for declaratory decree with consequential relief is with reference to any property, such valuation shall not be less than the value of the property calculated in the manner provided for by clause (v) of Section 7.
9. In this case, there is no prayer for cancellation of the sale deeds. The prayer is for a declaration that the deeds do not bind the coparcenary and for joint possession. The plaintiff in the suit was not the executant of the sale deeds. Therefore, the court fee was computable under Section 7(iv)(c) of the Act. The trial court and the High Court were therefore not justified in holding that the effect of the prayer was to seek cancellation of the sale deeds or that therefore court fee had to be paid on the sale consideration mentioned in the sale deeds.
22. The learned senior counsel for the defendants/applicants submits that even assuming that the plaintiffs were not to value the suit at the value of the sale consideration, even otherwise, the valuation is completely arbitrary and is not even commensurate with the circle rate.
23. In my view, these pleas would have to be considered at the time of adjudication of the suit and would require evidence. At the stage of considering an application under Order VII Rule 11 of the CPC, only the contents of the plaint and the documents filed therewith can be considered. The defence of the defendants cannot be considered at the present stage. Reference in this regard may be made to the judgments of the Supreme Court in Srihari Hanumandas Totala v. Hemant Vithal Kamal & Ors., (2021) 9 SCC 99 and G. Nagaraj and Another v. B.P. Mruthunjayanna and Others, 2023 SCC OnLine SC 1270.
24. Regarding the effect of the execution petition filed by the plaintiffs on the present suit, again it is the case of the plaintiffs that it is only in those proceedings and the proceedings in the earlier suit filed by the plaintiffs, that the plaintiffs learnt that the defendants have allegedly got a Sale Deed executed in their favour. Whether the issue of the Sale Deed was a matter before the Arbitrator and, therefore, covered by the arbitration Award and, in turn, covered by the execution petition, would again be a matter of evidence. Presently, in the plaint, it is stated that the same is not. Therefore, this also cannot act as a ground for rejecting the plaint by relying upon the provisions of Order VII Rule 11 of the CPC.
25. Coming to the plea of the defendants that as the plaintiffs had not claimed a relief of cancellation of the Sale Deed and possession in his earlier suit, again it is the case of the plaintiffs that it is only after the written statement had been filed in the earlier suit by the defendants, that the plaintiffs came to know of the alleged Sale Deed through an inspection of the documents carried out by the plaintiffs.
26. The learned senior counsel for the defendants submits that this plea of the plaintiffs is completely false and the plaintiffs were well aware of the Sale Deed.
27. This plea of the defendants would again require evidence. With the contents of the plaint, it cannot be said that the plaintiffs were aware of the details of the Sale Deed at the time of the filing of the earlier Suit before the learned District Court.
28. As far as the plea that in the earlier suit, the plaintiffs did not seek the relief of possession, the learned counsel for the plaintiffs has submitted that the suit was filed as one for mandatory injunction instead of possession, but that would be only a technical lacuna in the suit. In any case, the suit was rejected under Order VII Rule 11 of the CPC which can never act as a res judicata or as a bar on the maintainability of the present suit. In fact, the present suit was filed even before the dismissal of the said suit.
29. I am of the opinion that for the above reasons, the provisions of Order II Rule 2 of the CPC would not be attracted in the facts of the present case.
30. In any case, these are matters which would require evidence of the parties and, as held herein-above, cannot be determined at this stage on an application under Order VII Rule 11 of the CPC.
31. I, therefore, find no merit in the present application. The same is accordingly dismissed.
CS(COMM) 1118/2018
32. The plaintiffs shall file a joint schedule of documents within a period of four weeks, in consultation with the learned counsel for the defendants.
33. List before the learned Joint Registrar (Judicial) for marking of exhibits on 9th December, 2024.
NAVIN CHAWLA, J
SEPTEMBER 11, 2024/ns/as
Click here to check corrigendum, if any
CS(COMM) 1118/2018 Page 17 of 17