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Thursday, May 16, 2013

Objection to withdrawal of a suit by impleader /defendant No.4- not maintainable in view of the facts = "5. The grievance of the Appellant is that the aforesaid amount ought not to have been allowed to have been withdrawn since the Appellant has filed a separate suit for specific performance of its agreement, against the Respondents and others. Now, in so far as the Appellant is concerned, the Appellant must necessarily pursue its claim in that suit. A motion has been taken out by the Appellant in its suit which is still pending before the Learned Trial Judge. As regards the suit out of which the present appeal arises, that was for specific performance of the agreement between the First Respondent and the Second, Third and Fourth Respondents. Whether the suit should be pursued or should be unconditionally withdrawn was a matter for the First Respondent- Plaintiff to determine since it is the First Respondent who is in carriage of these proceedings. Upon the withdrawal of that suit, an order had to be passed in regard to the monies which were deposited in pursuance of the interim direction. The Appellant could have no objection whatsoever if the monies were directed to be refunded back to the First Respondent who had deposited the money. It would make no difference to the legal position if the monies are directed to be paid over to the Second, Third and Fourth Respondents in terms of the agreement between the First Respondent and the Second, Third and Fourth Respondents. The Appellant which has instituted its own independent suit would be at liberty to pursue its suit to a logical conclusion. The agreement between the First Respondent and the Second, Third and Fourth Respondents does not preclude the Appellant from pursing its own remedies in respect of the agreement which the Appellant claims and in respect of which a separate suit is pending."- We have heard learned senior counsel for the petitioner at some length and perused the record. In our opinion, the petitioner's challenge to the order passed by the learned Single Judge was wholly misconceived and the Division Bench of the High Court rightly held that it cannot have any legitimate objection to the disposal of the suit in terms of the agreement reached between respondent No.1 and respondent Nos.2 to 4 because it had already instituted independent suit. The reasons recorded by the Division Bench for declining to interfere with the order of the learned Single Judge are correct and the impugned order does not call for interference under Article 136 of the Constitution. The special leave petitions are, accordingly, dismissed. However, it is made clear that the order passed by the learned Single Judge and the impugned order shall not prejudicially affect adjudication of Suit No.2691/1998.


ITEM NO.57 COURT NO.3 SECTION IX
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (Civil)....../2013
CC 10223-10224/2013
(From the judgement and order dated 30/04/2013 in NM No. 812/2013 in AN
No.190/2013 in SN No.2055/2010 and AN No.190/2013 in SN No.2055/2010 of the
HIGH COURT OF BOMBAY)

LOK HOUSING & CONSTRUCTIONS LTD. Petitioner(s)

VERSUS

RUNWAL DEVELOPERS LTD. & ORS. Respondent(s)

(With appln(s) for permission to file SLP without c/copy as well as plain
copy of the impugned order and exemption from filing c/copy as well as
plain copy of the impugned order and with prayer for interim relief and
office report)

Date: 10/05/2013 These Petitions were called on for hearing today.

CORAM :
HON'BLE MR. JUSTICE G.S. SINGHVI
HON'BLE MRS. JUSTICE RANJANA PRAKASH DESAI

For Petitioner(s) Mr. Uday U. Lalit, Sr. Adv.
Dr. Abhishek Manu Singhvi, Sr. Adv.
Ms. Indu Malhotra, Sr. Adv.
Mr. Sanjay Kotak, Adv.
Mr. Kush Chaturvedi, Adv.
Ms. Nishtha Kumar, Adv.
Mr. Vanshdeep Dalmia, Adv.
Mr. Vikas Mehta,AOR

For Respondent(s) Mr. C.U. Singh, Sr. Adv.
Mr.Shishir Deshpande,Adv.
Mr. Amit Yadav, Adv.

Mr. Shyam Divan, Sr. Adv.
Mr. Pradeep Bakhru, Adv.
Mr. Aman Gandhi, Adv.
Ms. Bindi Girish Dave, Adv

UPON hearing counsel the Court made the following
O R D E R

These petitions are directed against order dated 30.4.2013 passed
by the Division Bench of the Bombay High Court whereby the appeal preferred
by the petitioner was dismissed and order dated 6.3.2013 passed by the
learned Single Judge granting leave to the plaintiff (respondent No.1
herein) to unconditionally withdraw Suit No.2055/2010 filed against
Madhusudhan Mehra and others was upheld.

The petitioner filed Suit No.2691/1998 against respondent No.2 and
his five brothers for specific performance of Development-cum-Sale
Agreement dated 22.7.1995 by asserting that it was always ready and willing
to perform its obligation under the agreement and that the defendants were
guilty of non-fulfilling their part of the contract. 

The trial Court
passed order dated 13.7.1998 in Notice of Motion No.2241/1998 taken out by
the petitioner and restrained respondent No.2 and his brothers from
alienating, transferring and/or disposing of the suit property or from
parting with possession subject to the condition of depositing Rs.4 crores.
The petitioner did not fulfill this condition.

Respondent Nos.2 to 4 filed Suit No.423/2001 against the
petitioner for grant of a declaration that the termination of Development- cum-Sale Agreement was valid.


On 4.1.2008, respondent Nos.2 to 4 are said to have executed a
Memorandum of Understanding with respondent No.1 for sale of their one-
third undivided share in the suit property covered by agreement dated
22.7.1995. 

After two years and about six months, respondent Nos.2 to 4
terminated the Memorandum of Understanding. 

Thereupon, respondent No.1 filed Suit No.2055/2010 for specific performance thereof.
 In that suit, the trial Court passed order dated 22.10.2010 and restrained all the defendants i.e. respondent Nos.2 to 4 and the petitioner from selling, alienating, encumbering, transferring and/or creating any third party rights in one-third portion of the suit property. 
This was subject to
deposit of Rs.7,70,65,750/- by respondent No.1. 

The latter did the needful on 18.11.2010.

During the pendency of Suit No.2055/2010, respondent No.1 and
respondent Nos.2 to 4 executed consent terms whereby respondent No.1 agreed to withdraw the suit with liberty to respondent Nos.2 to 4 to withdraw sum of Rs.7,70,65,750/- . 


The petitioner, who was impleaded as defendant No.1
in the suit objected to the acceptance of consent terms. 

The learned Single
Judge took cognizance of the prayer made by respondent No.1, the objection
raised on behalf of the petitioner and granted leave for withdrawal of the
suit. 

The relevant portions of the order passed by the learned Single Judge
read as under:


"1. The plaintiff desires to withdraw the suit against all
defendants. Plaintiff and defendants 1, 2 and 3 have agreed
that the amount of Rs.7,70,65,750/deposited in this Court
pursuant to the interim order dated 22nd October, 2010
together with all accrued interest thereon be allowed to be
withdrawn by defendants 1, 2 and 3.

2. The attorneys for the plaintiff and defendants 1, 2 and
3 have tendered minutes of the order in that behalf.

3. Counsel on behalf of defendant No.4 opposes the above
agreement being effectuated between the plaintiff and
defendants 1, 2 and 3 in as much as defendants 1, 2 and 3
would be allowed to withdraw the amount deposited in the
Court.

4. Counsel on behalf of defendant No.4 contends that the
plaintiff may withdraw the suit which he has the right to
do against all the defendants.


5. He has drawn my attention to the order dated 22nd
October, 2010 directing the deposit. Upon the deposit the
plaintiff has been granted injunction against all the
defendants against creation of third party rights in the
suit property.


6. Defendant No.4 has an earlier claim under an earlier
agreement which was known to the plaintiff at the time of
entering into the suit agreement between the plaintiff and
defendants 1, 2 and 3. 

The order considers the claim of the
plaintiff under Section 19(c ) of the Specific Relief Act
upon such knowledge.


7. Having considered the prior claim as also the
plaintiff's claim the interim order had come to be passed.


8. The defendant No.4 has sued upon his claim earlier. 

That
is in Suit No.2691 of 1998 filed in this Court. 

However the
plaintiff in that suit, defendant No.4 herein, 

failed to
obtain any interim reliefs. 

His claim for specific
performance remains at that. 

That would have to be agitated
in the suit upon the evidence led in the trial. 

The claim
of defendant No.4 herein would, therefore, be considered
only at that stage and upon such evidence. 

If defendant
No.4, the plaintiff in that suit, makes out his case he may
obtain the relief of specific performance or the relief of
damages. Defendant No.4 as the plaintiff in that suit would
have to execute that decree as and when obtained. The
amount lying to the credit of this suit cannot be utilised
for the purpose of execution of the decree passed in that
suit. That is what defendant No.4 seeks to do.


9. It is seen that the plaintiff's suit is based upon the
plaintiff's agreement with defendants 1, 2 and 3. To secure
that agreement the amount was directed to be deposited.
Consequently upon the settlement of the claim between the
parties to that agreement, the amount must be allowed to be
withdrawn by either of those parties. Not allowing them to
withdraw that amount would mean that the amount of
consideration secured under that agreement would be
utilised as a security for a decree which would be passed
in future. 

That cannot be allowed in this suit. 
What
defendant No.4 would get in this suit is the freedom of the
plaintiff's claim upon the plaintiff withdrawing the suit.
Defendant No.4 is freed of his obligation to defend the
suit. 

He cannot claim any other relief in the plaintiff's
suit. 

Hence, the suit is allowed to be withdrawn against
all the defendants.


10. There shall be an order and decree in terms of minutes
of the order signed by Advocates of the parties and the
plaintiff as also defendants 1, 2 and 3."




The minutes of the order to which reference has been made in
paragraph 10 of the aforesaid order are also extracted below:
"MINUTES OF THE ORDER

1. The Plaintiff withdraws the captioned Suit against all
the Defendants.

2. All interim orders to stand vacated.

3. In so far as the sum of Rs.7,70,65,750/- (Rupees Seven
Crores Sixty Five Thousand and Seven Hundred and fifty
only) deposited by the Plaintiff in the Hon'ble High Court
on 18th November, 2010 towards compliance of the Order
dated 22nd October, 2010 office of the Prothonotary and
Senior Master, High Court Bombay pursuant to the order
dated 22nd October, 2010 of this Court is concerned, the
Plaintiff agrees that Defendant No.3 i.e. Mr. Vinay
Madhusudan Mehra, shall for an on behalf of Defendant Nos.1
to 3, be entitled to withdraw the same together with all
the interest accrued on the said amount. The Plaintiff
shall render all the necessary assistance to enable
Defendant No.3 to withdraw the said sum."



The petitioner challenged the order of the learned Single Judge in
Appeal (L) No.190/2013 and pleaded that the learned Single Judge was not at
all justified in disposing of the suit in terms of the agreement reached
between respondent No.1 on the one hand, and respondent Nos.2 to 4 on the
other. The Division Bench of the High Court rejected the grievance of the
appellant by recording the following observations:

"5. The grievance of the Appellant is that the aforesaid
amount ought not to have been allowed to have been
withdrawn since the Appellant has filed a separate suit for
specific performance of its agreement, against the
Respondents and others. 

Now, in so far as the Appellant is
concerned, the Appellant must necessarily pursue its claim
in that suit. 

A motion has been taken out by the Appellant
in its suit which is still pending before the Learned Trial
Judge. 

As regards the suit out of which the present appeal
arises, that was for specific performance of the agreement
between the First Respondent and the Second, Third and
Fourth Respondents. 

Whether the suit should be pursued or
should be unconditionally withdrawn was a matter for the
First Respondent- Plaintiff to determine since it is the
First Respondent who is in carriage of these proceedings.


Upon the withdrawal of that suit, an order had to be passed
in regard to the monies which were deposited in pursuance
of the interim direction. 

The Appellant could have no
objection whatsoever if the monies were directed to be
refunded back to the First Respondent who had deposited the
money.

 It would make no difference to the legal position if
the monies are directed to be paid over to the Second,
Third and Fourth Respondents in terms of the agreement
between the First Respondent and the Second, Third and
Fourth Respondents. 

The Appellant which has instituted its
own independent suit would be at liberty to pursue its suit
to a logical conclusion. 

The agreement between the First
Respondent and the Second, Third and Fourth Respondents
does not preclude the Appellant from pursing its own
remedies in respect of the agreement which the Appellant
claims and in respect of which a separate suit is pending."



We have heard learned senior counsel for the petitioner at some
length and perused the record.

In our opinion, the petitioner's challenge to the order passed by
the learned Single Judge was wholly misconceived and the Division Bench of
the High Court rightly held that it cannot have any legitimate objection to
the disposal of the suit in terms of the agreement reached between
respondent No.1 and respondent Nos.2 to 4 because it had already instituted
independent suit. The reasons recorded by the Division Bench for declining
to interfere with the order of the learned Single Judge are correct and the
impugned order does not call for interference under Article 136 of the
Constitution.


The special leave petitions are, accordingly, dismissed. However,
it is made clear that the order passed by the learned Single Judge and the
impugned order shall not prejudicially affect adjudication of Suit
No.2691/1998.



|(Parveen Kr.Chawla) | |(Phoolan Wati Arora) |
|Court Master | |Court Master |
| | | |

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