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Specific Performance against co-ownersS

Comment  : In this case the court was faced with the question “whether application for leave to amend be allowed or not “? The Court reiterating that laws of procedure are meant to subserve justice and not to frustrate it over hair-splitting technicalities . The factual matrix was A entered into an agreement to Sell Black Acre to B – later he resiled from his obligations. B sued for SP. A claimed that he was just one co-owner of the property and lacked the capacity to sell the entire property. B applied for impleadment of other co-owners u/o 1 R 10, and also sought amendment of pleadings : which was opposed on the ground that period of limitation against other co-owners as on date when amendment is sought – has expired. The Court negatived the contention holding that the original petition was filed against A in the capacity of representative of all other co-owners, hence the amendment did no injustice. 
 
Delhi High Court
Vijay Gupta vs Gursharan Singh Sandhu on 18 January, 2011
Author: Vinay Kumar Jain

THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment Pronounced on: 18.01.2011 + CS(OS) No. 715/2004

VIJAY GUPTA …..Plaintiff – versus –

GURSHARAN SINGH SANDHU …..Defendant Advocates who appeared in this case:

For the Plaintiff: Mr. D.K. Rustagi and Mr. B.S. Bagga For the Defendant: Mr. M.S. Doabia and Mr. Vishal Malhotra for D-1.

Mr. Manish Sharma for D-2 to 4.

CORAM:-

HON’BLE MR JUSTICE V.K. JAIN

1. Whether Reporters of local papers may be allowed to see the judgment? No

2. To be referred to the Reporter or not? No

3. Whether the judgment should be reported in Digest? No V.K. JAIN, J. (ORAL)

IA No. 652/2011 (u/S. 114 r/w S. 151 CPC) With the consent of the parties, IA No. 10268/2010 is being taken up today for disposal. Hence, this application stands disposed of.

CS(OS) No.715/2004 Page 1 of 11 IA No. 10268/2010

1. This is an application for amendment of plaint. The plaintiff has filed this suit claiming specific performance of an Agreement to Sell dated 27th March 2004 in respect of a flat No. 113 on first floor of New Delhi house 27, Barakhamba Road, New Delhi. The case of the plaintiff, as set-out in the plaint, is that the defendant (Gursharan Singh Sandhu) on 27 th March 2004, being the owner of the aforesaid flat, entered into an agreement to sell the same to him for a total consideration of Rs.38,80,400/- and a sum of Rs.1,00,000/- was paid to the defendant as advance, which was acknowledged vide receipt dated 27 th March 2004. It is also alleged that on 27th March 2004 the plaintiff and the defendant (Gursharan Singh Sandhu) had also agreed that the Sale Deed will be completed by getting the same entered in the record of the builder within two months or so and the balance payment would be made on receipt of necessary clearance/permission from the builder/civil authorities and receipt of possession by the plaintiff. It is also alleged that the defendant had not come forward to complete the formalities despite repeated requests from the CS(OS) No.715/2004 Page 2 of 11 plaintiff and was trying to sell the flat to some other person at a higher price.

2. The defendant (Gursharan Singh Sandhu) filed written statement contesting the suit. It was alleged in the written statement that the defendant was not sole owner of the suit property, Smt. Tripat Kaur, mother of the defendant, Roopan Sandhu, sister of the defendant and Har Charan Singh Sandhu (HUF) being the other co-owners. The receipt, however, was not denied in the written statement.

3. On filing of written statement, the plaintiff filed an application under Order 1 Rule 10 of CPC being IA No. 6338/2006 seeking impleadment of Harsharan Singh Sandhu, Tripat Kaur and Roopan Sandhu. In para 4 of the application, which was filed on 24th May 2006, the plaintiff inter alia stated as under:-

“That the defendant as apparent from

the contents of agreement-cum-

receipt dated 27.03.2004, entered

into above transaction as sole

representative of the entire body of

ownership. In fact, other co-owner

has been in knowledge of present suit

throughout.”

CS(OS) No.715/2004 Page 3 of 11

4. In para 6 of the application, the plaintiff also sought leave of the Court to make all consequential amendments in the plaint required in this behalf.

5. IA No. 6338/2006 was allowed vide order dated 22nd April 2008 after notice to the proposed additional defendants i.e. Mr. Har Charan Singh Sandhu (HUF), Ms. Tripat Kaur and Ms. Roopan Kaur Sandhu. It would be pertinent to note here that the application for their impleadment was not opposed by Mr. Har Charan Singh Sandhu (HUF), Ms. Tripat Kaur and Ms. Roopan Kaur Sandhu as is noted in the order dated 22nd April 2008.

6. Now, vide IA No. 10268/2010, the plaintiff wants to amend para 2 and 3 of the plaint in the following manner:-

Existing para 2 of the plaint:

“The defendant is the owner of the flat No. 113, 1 floor, New Delhi House, Plot No. 27, Barakhamba Road, New Delhi – 110001 admeasuring 872 Sq fts. (hereinafter refer to as the flat-suit property). The defendant is responsible and liable for the performance of the agreement.” Proposed para 2 of the plaint:

“The defendant no.1 is one of the co-owners and authorized representative of other co-owners of the flat No. 113, 1st floor, New Delhi House, Plot No. 27, Barakhamba Road, New Delhi – 110001 admeasuring 872 sq. fts. CS(OS) No.715/2004 Page 4 of 11 (hereinafter refer to as the suit property). The defendants are responsible and liable for the performance of the agreement.” Existing para 3 of the plaint:

“The defendant on 27.03.2004 being the owner of the aforesaid flat entered into an agreed to sell the same to the plaintiff and plaintiff agreed to buy the same for a total sale consideration of Rs.38,80,400/- i.e. @ Rs.4450 per sq. fts. The plaintiff paid a sum Rs.1,00,000/- as advance towards the sale consideration of the above flat which was duly acknowledged by the defendant vide receipt dated 27.03.04 issued by the defendant in favour of the plaintiff herein. It was also agreed that the defendant shall pay all dues upto date of agreement along with transfer charges payable to builder of the building. A copy of the receipt/agreement dated 27.03.04 is annexed hereto as ANNEXURE:P/1. The said receipt was duly executed by the defendant in the presence of Shri Pawan Kumar, Property broker, 807, Rohit House, 3, Tolstoy Marg, New Delhi and Shri Mahesh Goel, having office in 408, New Delhi House, New Delhi and resident of 369, Sector 16A, Faridabad.” Proposed para 3 of the plaint:

“The defendant no.1 on 27.03.2004 being the owner and authorized representative of the other owners of the aforesaid flat and agreed to sell the same to the plaintiff and plaintiff agreed to buy the same for a total sale consideration of Rs.38,80,400/- i.e. @ Rs.4,450/- per sq. ft. The plaintiff paid a sum Rs.1,00,000/- as advance towards the sale consideration of the above flat which was duly acknowledged by the defendant no.1 vide receipt dated 27.03.04 issued by the defendant no. 1 in favour of the plaintiff herein. It was also agreed that the defendants no. 1 to 4 shall pay all dues upto date of agreement along with transfer charges payable to builder of the building. A copy of the receipt/agreement dated 27.03.04 is annexed hereto as Annexure P/1. The said receipt was duly executed by the defendant no. 1 in the presence of Shri Pawan Kumar, Property broker, 807, Rohit House, 3, Tolstoy Marg, New Delhi and Shri Mahesh Goel, having office in 408, New Delhi House, New Delhi and resident of 469, Sector 16A, Faridabad.” CS(OS) No.715/2004 Page 5 of 11

7. The proposed amendment has been opposed by the learned counsel for defendants 2 and 4 primarily on the ground that as on today the claim for specific performance against defendants 2 to 4 is barred by limitation and, therefore, the proposed amendment will take away vested right which has accrued to defendants 2 to 4 with the passage of time.

8. As noted earlier, IA No. 10268/2010 for impleadment of defendants 2 to 4 was filed on 24 th May 2006. The Agreement to Sell alleged by the plaintiff is dated 27th March 2004. On the date application for impleadment of defendants 2 to 4 was filed, the claim against them for specific performance of the agreement was well within the prescribed period of limitation. As noted earlier even in the application for impleadment of defendants 2 to 4, the plaintiff averred that defendant Gursharan Singh Sandhu had entered into the transaction with him to the knowledge of other co-owners and as sole representative of the entire body of ownership. Thus, it cannot be disputed that the plea sought to be taken by way of proposed amendment had already been taken in the application filed way back on 24 th CS(OS) No.715/2004 Page 6 of 11 May 2006. It is true that the application for amendment of plaint, which ought to have been filed along with the application under Order 1 Rule 10 of CPC was not filed promptly and there is a substantial delay in seeking the proposed amendment. But, considering the fact that the necessary averments, constituting foundation of the claim of the plaintiff seeking specific performance of the agreement dated 27th March 2004 against all the defendants had already been made at a time when the claim against them would have been within the prescribed period of limitation, I am of the view that no prejudice will be caused to defendants 2 to 4 if the proposed amendment is allowed.

9. It is settled proposition of rules of procedure are handmaids of justice and howsoever negligent a party may be, the first amendment sought by him should ordinarily be allowed if the proposed amendment is just, the opposite party can be compensated in terms of cost and no prejudice is likely to be caused to it by allowing the proposed amendment. Errors or mistakes, if not fraudulent, should not be made a ground for rejecting the application for amendment of plaint or written statement. If there is no undue delay, no inconsistent cause of action is introduced CS(OS) No.715/2004 Page 7 of 11 and no vested interest or accrued legal right is affected and the application for amendment is not mala fide or will not prejudice the opposite party, the amendment should ordinarily be allowed. It is also a settled proposition of law that at the stage of considering an application for amendment of the pleadings, the Court cannot go into truthfulness or otherwise sought to be made by way of proposed amendment. Hence, at this stage, the Court cannot go into merit of the allegation that defendant No.1 while entering into transaction with the plaintiff was representing the other co-owners or not. In Suraj Prakash Bhasin v. Raj Rani Bhasin(1981) 3 SCC 652 Supreme Court inter alia observed as under:-

“… liberal principles which guide the

exercise of discretion in allowing

amendment are that multiplicity of

proceedings should be avoided, that

amendments which do not totally

alter the character of an action

should be readily granted while care

should be taken to see that injustice

and prejudice of an irremediable

character are not inflicted on the

opposite party under pretence of

amendment, that one distinct cause

of action should not be substituted

for another and that the subject-

CS(OS) No.715/2004 Page 8 of 11 matter of the suit should not be

changed by amendment.”

In L.J. Leach and Company Ltd. v. Jardine Skinner and Co. AIR 1957 SC 357, the amendment sought by the plaintiff was resisted by the defendant contending that it sought to introduce a new cause of action, which was barred by limitation on the day the amendment was sought and hence would seriously prejudice the defendants. The amendment was, however, allowed by the Court considering that it was not foreign to the scope of the suit and all necessary facts were on record.

In Laxmidas Dayabhai Kabarwala v. Nanabhai Chunilal Kabarwala and Ors. AIR 1964 SC 11 the prayer of the defendant for amendment for treating the counter claim as a cross-suit was objected by the plaintiff inter alia on the ground of limitation. The amendment was, however, allowed by the High Court and the order passed by the High Court was upheld by the Supreme Court which felt that the Rule leave to amend will ordinarily be refused when the effect would be to take away from a party a legal right which has accrued to him by lapse of time and applies only when CS(OS) No.715/2004 Page 9 of 11 fresh allegations are added or fresh reliefs are sought by way of amendments.

The view taken in the case of L.J. Leach and Company (supra) was reiterated by Supreme Court inT.N. Alloy Foundry Co. Ltd. v. T.N. Electricity Board & Ors. (2004) 3 SCC 392.

10. The learned counsel for defendants 2 to 4 submits that the nature of the suit is sought to be changed by way of proposed amendment. The contention to my mind is totally misconceived. The suit, as originally instituted, is a suit for specific performance of the agreement dated 24 th March 2004 and it continues to be of the same nature even if the proposed amendment is allowed. As regards delay, as stated earlier, the defendants can always be suitably compensated, but that by itself should not be a ground for denying the proposed amendment unless it is shown that the proposed amendment is mala fide by nature.

11. For the reasons given in the preceding paragraphs, the proposed amendment is allowed subject to payment of Rs.25,000/- as cost. Written statement to the amended plaint be filed within two weeks.

CS(OS) No.715/2004 Page 10 of 11

12. List for framing additional issues, if any, on 25 th February 2011. The date of 11th February 2011 fixed before the Joint Registrar is cancelled. The plaintiff undertakes to pay the cost imposed today as also the previous costs within three days from today.

(V.K. JAIN)

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