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Delhi High CourtIndian Cases

Shri Vijay Sagar S/O Shri Sunder Lal … vs Shri Sunder Lal Sagar S/O Late Shri Hari … on 25 August 2005

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Delhi High Court
Shri Vijay Sagar S/O Shri Sunder Lal … vs Shri Sunder Lal Sagar S/O Late Shri Hari … on 25 August, 2005
Author: Swatanter Kumar
Bench: Swatanter Kumar

JUDGMENT

Swatanter Kumar, J.

1. This is a suit for partition of property no. 42, Jor Bagh, New Delhi, claimed by the son against his father and another brother. The construction of the said plot was got effected by taking loans from various people, by the karta of the Hindu Undivided Family (for short ‘HUF’). Ground floor was constructed in the year 1956 and the first and the second floors were constructed in the year 1960-61. A loan was also taken from the Life Insurance Corporation of India which filed a suit for recovery being Suit No. 45/1974. The suit was eventually compromised. The plaintiff had approached the court with the averment that the suit property is a joint property and is liable to be partitioned by metes and bounds as the plaintiff has 1/3rd Share in the property in question. It is the pleaded case of the plaintiff that the defendants are denying title, interest as well as extent of possession and user. The relation between the parties were further strained and ultimately the plaintiff filed the present suit. According to the plaintiff, defendant no. 1 is the karta of the HUF, known as Hari Ram Sunder Lal Sagar and the HUF is assessed to income tax. Defendant no. 2 is entitled to equal share in the property i.e. 1/3rd undivided share in the property.

2. The suit was contested by the defendants wherein it is stated that defendant no. 1 had acquired the suit property out of his individual income and the lease deed was executed individually in favor of defendant no. 1 and not in the name of the HUF. The property was converted into freehold on 18th November, 1999 and the conveyance deed was executed in favor of defendant no. 1 only, and not in favor of the HUF. The loan from LIC is admitted, however, it is admitted that same was also taken in the personal capacity by the defendant.

3. Despite various pleas taken by the respective parties in their pleadings, certain attempts were made to amicably settle the matter. First order in this regard was passed by the Court on 30th April, 2003 which reads as under :-

During the chamber hearing, various possibilities of settling the dispute between the parties were discussed. Plaintiff states that he has spent substantial amounts in renovation of the ground floor. Without prejudice to the rights and contentions of the parties as also the proposal for settlement which may eventually materialise, it was put to plaintiff that an assessment could be made of the expenses incurred in renovation by an independent architect. After sometime, parties wish to further explore the possibility of settlement and discuss it with their respective counsel. Renotify for reporting settlement, if any, on 21st May, 2003 at 2.00 PM in chamber.

4. Thereafter it was stated that as amicable settlement was not possible, the suit should be listed for framing of issues. The case was adjourned on various dates for that purpose and there being no dispute with regard to share of each of the parties to the suit, in the suit property, the Court passed the preliminary decree as well as appointed a Commissioner vide order dated 24th August, 2004, which reads as under :-

Learned counsel for the defendants state that she filed the claim of the plaintiff who is entitled to 1/3rd share and prays that the preliminary decree be passed accordingly.

Accordingly, preliminary decree is passed declaring the plaintiff and defendants No. 1 & 2 each to entitled to 1/3rd share of the suit property. The question of rendition of accounts for the rental said to have been received shall be considered at the time of passing of the final decree.

Accordingly, Mr. Arjun Bhandari, Advocate is appointed as a Local Commissioner to make a report about the suit property at Jor Bagh and report whether in accordance with the shares, this property is partible by metes and bounds. Local Commissioner to submit a report to this Court within four weeks from today. The fee of Local Commissioner of Rs. 20,000/- shall be paid by the plaintiff within one week.

List on 9th November, 2004.

dusty.

5. The report of the local commissioner was examined by the Court and thereafter the parties were required to sit Along with their counsel and see if the matter could be resolved. On 17th December, 2004, the parties came to a settlement before the Court itself and after partly hearing the matter, the settlement was recorded by the Court in its order dated 17th December, 2004, which reads as under :-

This matter was partly heard. The parties have thereafter arrived at a settlement in the form of the following tabulated statement which indicates as follows :

Total Area 4,7,33 sq.ft.

Area with plaintiff after handing
over 2nd floor & father’s room in
ground floor (2173+524) 2,697 sq.ft.

1/3 share of plaintiff in the Hs. 1,576 sq.ft.
Property.

Extra area going to Plaintiff in 1st 1,1,21 sq.ft.
Phase

Rate as per sq.ft.
7,5,00,000.00 Rs.15,846/-per
4,733 Sq.ft.

Amount to be given by the plaintiff
as 1st Installment as agreed by the
plaintiff 15846×1120 Rs.1,77,47,520/-

The balance amount to be given as
& when the rest of the area will be
handed over i.e. 2036 sq.ft. Of 1st
Floor 2036×15846 Rs. 3,22,52,480/-
————————
Total Rs. 5,00,00,000/-
———————–

In terms of the above tabulated agreement between the parties, it has been agreed that the plaintiff shall make a payment of Rs. 1,77,47,520/- to the defendant No. 1 within a period of 30 days from today. The defendant No. 1 shall accept the same on behalf of himself and defendant No. 2, who is also present in Court. Within 10 days of the receipt of the said payment, the possession of ground floor and second floor of the property shall be handed over to the plaintiff. The balance sum of Rs. 3,22,52,480/- shall be paid within 15 days of the handing over of the possession of the first floor to the plaintiff. Notice of vacation of the first floor of the tenant shall be given by the defendant, and the period for making the balance payment shall run from that day.

In the meanwhile, till the entire transaction is complete, status quo in respect of the property shall be maintained by both the parties.

On the entire payment being made ownership of the property shall pass to the plaintiff.

List the matter on 4th January, 2005 to enable the parties to file formal application under Order XXIII Rule 3 CPC incorporating the above terms recorded by this Court.

6. Before this settlement could materialise and a final decree in terms of the settlement is passed, plaintiff filed an application being IA 614/2005 on 19th January, 2005 wherein the prayer was that the order dated 17th December, 2004 be modified in the following terms :-

(a) the defendants shall provide undertaking that the tenant shall vacate the premises on or before a specified date and also obtain an affidavit of the tenant to that effect.

(b) That the plaintiff may be allowed to encumber by way of mortgage or charge or pledge not being a sale, his one third share in the property after receipt of the said payment Rs. 1,77,47,520/- by the defendants.

7. IA 615/2005 was filed by the defendants again under section 151 CPC praying for modification of the order dated 17th December, 2005 and defendants may be allowed to pay Rs. 2.75 crores to the plaintiff in return seek possession of the property. The contention in this application was that as plaintiff has failed to exercise his option within the stipulated period and had backed out of the terms of the order, the defendant should be granted opportunity and instead paying Rs. 2.50 crores being share claimed by the plaintiff, the defendant offered to make a larger payment. On 28th February, 2005, learned counsel appearing for the plaintiff had withdrawn IA 614/2005 filed on behalf of the plaintiff while on IA 615/2005, learned counsel for defendant had sought time to seek instructions. IA 1259/2005 which was filed on behalf of Ms. Nishi Sharma claiming interest in the property and praying for her impleadment under the Code of Civil Procedure was also dismissed as withdrawn on that itself. As such only the application of the defendant being IA 615/2005 remained for consideration. In the order dated 5th May, 2005, the Court recorded that bank drafts have been returned to counsel for plaintiff which were accepted by the plaintiff for the pleas raised on behalf of the plaintiff. On 8th July, 2005, the Court passed the following order :-

It is not possible to settle the dispute as per the order of this Court dated 17th December, 2004. Accordingly, since the dispute cannot be amicably settled, it is not possible to keep this matter pending in this Court. Accordingly, it is released from this Court. To be listed before appropriate Court on original side on 15th July, 2005, subject to the orders of Hon’ble the Chief Justice.

8. The local commissioner had visited the property and had submitted a report dated 5th October, 2004. The Commissioner had taken into consideration the various factors including the portion in possession of the respective parties to the suit. Finally, the Commissioner suggested “I am of the opinion having regard to the nature of the property as it exists today, it is not possible to allot each of the co-sharers part of the said property having approximately the same value as corresponding to their respective 1/3rd share each. Therefore, I am of the view that keeping the nature of the property as it exists today and the construction made thereon as existing today, the same cannot be divided by metes and bounds.” Along with his report, the local commissioner had filed various photographs which he had taken of the property in dispute as well as the copy of the perpetual lease deed. To the report of the local commissioner, plaintiff had filed objections while no objections were filed on behalf of the defendants. The thrust of the objections filed on behalf of the plaintiff was that the property was capable of being partitioned by metes and bounds. However, it was specifically admitted that the property is residential unit having ground floor, first floor and barsati floor. The entire ground floor was in occupation of plaintiff and defendant No. 1, while the plaintiff was in possession of slightly larger share in the ground floor than his father and plaintiff was stated to have incurred substantial expenditure on renovation of the ground floor. The First Floor was in occupation of a tenant and the one room on the barsati floor was partitioned into two rooms by defendant No. 2 and was in his possession. The said floor was in dilapidated condition. It was the suggestion of the plaintiff that construction can be raised on the barsati floor and parties can have three independent units by demolishing and rebuilding the barsati floor as well as the servant quarters. It will be useful to notice at this stage itself that none of the parties to the suit were agreeing to the modification or change of the order dated 17th December, 2004. In other words even if a kind of agreed order of the Court which was not in the form of decree was to be modified, it could be modified only by consent of the parties. The parties in fact had more and more objections by passage of time to enforcement of the said order. According to the defendant, the plaintiff had committed uncondonable delays of the consent order and had prayed for modification which would change the very spirit of the agreement and would substantially the right of the parties. On the other hand, the plaintiff contended that in substance they had complied with the terms of the said order and the application for modification was not even pressed subsequently but the fact remains that the plaintiff did not comply with his obligations of the order within the stipulated time. Thus plaintiff cannot take any advantage of breach of such obligations merely because the application filed for modification was withdrawn subsequently.

9. Time was the essence of the compromise and as value of the property has gone up tremendously, it will be most inequitable to enforce the said settlement against the defendants besides the fact that the defendants are not giving consent for implementation of the said order. It is a settled rule of law that compromise is based on the principle of mutuality and the consent of the parties must be available before the Court at all relevant times. It was not a decree passed by the Court, but was recording of a composite solution suggested by the parties for implementation of the preliminary decree passed by the Court. A substantive step in law to a preliminary decree would be a final decree passed on consent of the parties or otherwise. No compromise application as contemplated under Order 23 Rule 3 CPC was filed before the Court and Court had recorded no satisfaction in regard to recording of the compromise, its legality and aspects of implementation. Learned counsel relied upon a judgment of the Supreme Court in Commissioner of Endowments and Ors. v. Vittal Rao and Ors (2005) 4 SCC 120 to contend that the compromise is valid and should be enforced against the parties. This judgment on ratio descendi has no application to the facts of the present case. The Supreme Court in that case hold that the High Court could pass orders under Article 226 of the Constitution of India and such a power can neither be controlled and nor effected by Order 23 Rule 3 CPC. Further it was held that because the writ petition was disposed of in terms of the memorandum on the basis of submissions made by counsel for the parties, the same could not be annulled on the ground that the compromise was not in writing and signed by the petitioner. However, in the present case, the facts are totally different as the parties have admittedly committed breach of the conditions recorded in the order and have given up valuable rights which had accrued to them because of their omission or default even if for the sake of arguments it is assumed that the order dated 17th December, 2004 is an enforcable compromise, in that case, the proceedings would be under Article 226 of the Constitution of India while in the present case they have to be controlled in accordance with the Order 23 Rule 3 CPC. Wherever the parties are given rights and it has inbuilt default clause, the same could be enforced if the plaintiff had failed to adhered to the terms of the settlement and filed an application for modification of the order as well as offered to the defendant payment on the condition “cheques may be encashed in case your client has no objection to the modification proposed in the order dated 17.12.2004 by way of enclosed application on behalf of the plaintiff”. In terms of the judgment of the Supreme Court in the cases of Gurpreet Singh v. Chatur Bhuj Goel (1988) 1 SCC 270 and Smt. Sova Ray and Anr. v. Gostha Gopal Dey and Ors. AIR 1988 SC 981, it was held that default clause in a compromise decree is not a penalty clause and therefore could not be ignored and that the compromise entered into during the course of hearing should be recorded and signed by the parties. For a compromise to be effective and binding, it has to be a voluntary act on the part of the parties, free and fair consent should be there at all relevant time, the Court would be instrumental in having agreed compromise effected and finality attached to the same, provided the same is lawful and satisfaction to that effect is recorded by the Court. The order dated 17th December, 2004 clearly shows that Court had made every attempt to resolve the controversy between the parties but both the parties violated their obligations and ensure that the compromise does not come through. Thus it is not for this Court to enforce a settlement which has become incapable of performance because of the own acts and deeds of the parties to the lis.

10. The very nature of objections which were filed on behalf of the plaintiff show that the physical partition by metes and bounds between the parties is not a practical and possible solution between the parties. Not only this, the defendants themselves in paragraph 6 of IA 4730/2004 had stated that it is very difficult to part away with 1/3rd share of the proper by metes and bound and the only solution is that the value of the property may be got done and accordingly the plaintiff may be given his 1/3rd share. Keeping in mind the objections of the plaintiff as well as other relevant factors, the suggestion made by the local commissioner deserves to be accepted.

11. Another significant factor is that the value of the property from December till today has increased tremendously . In fact that is the very basis because of which the parties are trying to wriggle out of the terms and conditions of the order dated 17th December, 2004. While in terms of order dated 17th December, 2004, the parties had valued the property in dispute approximately at Rs. 6 crores, now they had prayed before the Court that right of the parties be determined while enhancing the said value to Rs. 9 crores. In fact, each one of the parties to the suit was prepared to buy out the other at the said amount. This can safely be concluded from the orders passed by the Court on 20th July, 2005, which reads as under :-

During the course of hearing and without prejudice to their rights and contentions the parties are suggesting two modes of partition. These suggestions may be accepted in any alternative or any other suggestion may be put up by the parties.

It is primarily to settle the final mode of partition that these suggestions will be taken into consideration by the Court. The suggestions are:-(a) The property as of today is stated to be valued more than 9 crores out of which the Plaintiff would be entitled to 1/3rd of the share in terms of the preliminary decree.

(b) The Defendant would render the accounts of the rentals received by him in relation to part of the property which has been rented out.

(c) The parties would mutually agree for re-construction of the property and also examine whether the basement should be constructed to meet the cost of construction or parties would like to make payment in cash for the re-building of the entire building of three floors with basement.

Learned Counsel for the parties pray for time to seek instructions.

At request, adjourned to 2nd August, 2005.

The Defendant shall file an affidavit within one week from today giving complete details of the rental income and expenditure incurred by him and state the amount available with him from the same.

12. Even after the said order none of the parties were willing to leave the property in favor of the other and any reasonable suggestion made by one was repelled on frivolous grounds by the others. The inevitable analysis of this conduct of the parties is that there is no option before the Court except the report of the Local Commissioner and pass a final decree in terms thereof.

13. In view of my above discussion, the report of the local commissioner is accepted while rejecting the objections filed by the plaintiff. As the objections only demonstrate as to how difficult and impracticable, it is to divide the property by metes and bounds, as it would require structural changes, difficulties in valuing the portion, as each one of them claimed to have spent amount on the renovation of the portion in their possession and the difficulty arising from the occupancy of the tenant on the first floor. Accordingly, a final decree is passed ordering and directing that the property No. 42, Jor Bagh, New Delhi shall be sold by public auction on as and where basis and the sale proceeds shall be equally divided (1/3rd each by the plaintiff and defendants). The parties would be at liberty to participate in the said auction.