Service Matter Lawyer at CAT New Delhi.

Mr .V.K.Singh is a Standing Counsel of ESIC, Ministry of Labor & Employment who advising and contesting the Matters related to Service Matters at CAT( Central Administrative Tribunal) and at High Courts.

He is advising and contesting the Service Matters related to govt. servant/ PSU/Corporation etc.. likes:-

ACRs, Ad Hoc Service, Administrative Authority, Appointment, Age Proof, Age Relaxation. ,Appointment & Joining, Bias, Casual Labourer, Charge-Sheet, Child Care Leave, Compassionate Appointment ,Corruption Charges Under Prevention of Corruption Act, 1988,Denial of Reasonable Opportunity, Departmental Inquiry, Deputation- Inter Cadre Deputations, Disciplinary Authority, Disciplinary Proceedings, Gratuity Of Govt. Servant Indiscipline – Misbehaviour Inquiry, Joining Of Service, Judicial Review: Of an administrative Order, Limitations Leave Rules, Major Penalty, Minor penalty, Misappropriation Natural Justice

He is further advising for filing the matters before Central Administrative Tribunal [CAT]

Pension, Promotion, Quashing Of Administrative Order: On the grounds of violation of the rule of natural justice, arbitrariness, discrimination & irrationality, absence of fair play, etc. Quasi-Judicial Authority, Recovery, Reinstatement ,Res-Judicata ,Retirement: Compulsory Retirement.

Writ Petition is not maintainable even there is breach of contract between the parties.

In the Matter of United Bank of India, a “corresponding new bank”, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the provisions of the said Act lays down a pervasive control of the Central Government and the Reserve Bank of India (in short WPA 1998 OF 2020 RBI) in its functioning, I am inclined to borrow the language of the Hon’ble Supreme Court of India in Sagar Thomas (supra) though the same in respect of a private company carrying on banking business. The control of the Central Government and RBI over United Bank of India (now having been merged with Punjab National Bank) may bring it within the ambit of Article 12 of the Constitution of India but a contract entered into by such bank with its constituent while carrying on business or commercial activity of banking as in the instant case is a pure and simple contract without any statutory flavour. The RBI guidelines in the instant case operates in the interest of banking system or in the interest of monetary stability or sound economic growth having due regard to the interest of the depositors and does not incorporate any statutory flavour to the contract in hand. This brings such a contract like that in hand to the third category of cases specified in Radhakrishna Agarwal (supra). The breach alleged in such case like that in hand are that of contractual provisions pure and simple and no writ lies or order can be issued under Article 226 of the Constitution of India to compel the authorities to remedy such breach of contract. In the instant case, the writ petitioner is seeking release of the properties mortgaged to secure the loan on the ground of repayment of a substantial portion thereof. The prayer for release on being made to the bank has been rejected in 2016 which is under challenge in the writ petition filed in 2020 after about four years relying on a valuation WPA 1998 OF 2020 report of 2018. The breach complained of according to me falls in the third category of case as spelt out in Radhakrishna Agarwal (supra) and no writ lies or order can be made under Article 226 of the Constitution compelling the respondent bank to remedy the breach of contract pure and simple.

f) In a subsequent judgement of the Hon’ble Supreme Court reported in (2006) 10 SCC 236 (Noble Resources Ltd vs. State of Orissa & Anr.) Radhkrishna Agarwal (supra) and ABL International (supra) (cited by the petitioner) were considered. In Noble Resources Ltd. (supra) the Hon’ble Supreme Court after considering various authorities has brought a distinction between non-statutory contract and a statutory contract. A further distinction is also made between performance of statutory duty or dealing of a public matter by a State and its commercial activities. The Hon’ble Supreme Court then went on to hold that contractual matters are, thus, ordinarily beyond the realm of judicial review. The application of judicial review in such cases, are, however, very limited. Judicial review according to the said judgement is permissible when mala fide or ulterior motive is attributed. The Court has to bear in mind while considering the scope of judicial review so far it relates to the exercise of contractual powers by Government bodies that the principle of judicial review is to prevent arbitrariness or favouritism. The Court has to see whether interference is needed for larger public interest or that power has WPA 1998 OF 2020 been exercised for any collateral proposition. The Supreme Court has also held in Noble Resources (Supra) that existence of disputed question of fact or availability of an alternative remedy by itself would not decline the High Court in exercising its jurisdiction under Article 226 of the Constitution of India.

g) In another judgement reported in (2015) 9 SCC 433 State of Kerala and others vs. M.K. Jose, the Hon’ble Supreme Court has considered several authorities including ABL International Ltd. (Supra) and Noble Resources Ltd. (Supra) to find out in which type of case judicial review relating to contracts entered by the Government are called for.

h) In M.K. Jose (Supra) while approving the views taken in ABL International (supra), wherein legal principles as to maintainability of writ petition was considered, the Hon’ble Supreme Court quoted with approval the following See SCC Page 443 paragraph 17:

17. In ABL Internatinal Ltd. v. Export Credit Guarantee Corpn. Of India Ltd., a two-Judge Bench after referring to various judgments as well as the pronouncement in Gunwant Kaur and Century Spg. and Mfg. Co. Ltd. v. Ulhasnagar Municipal Council, has held thus: (ABL International case, SCC pp. 568-69 & 572, paras 19 & 27) ” 19. Therefor, it is clear from the above enunciation of law that merely because one of the parties to the litigation raises a dispute in regard to the facts of the case, the court entertaining such petition under Article 226 of the Constitution is not always bound to relegate the parties to a suit. In the above case of Gunwant Kaur this Court even went to the extent of holding that in a writ petition, if the facts require, even oral evidence can be taken. This clearly shows that in an appropriate case, the writ court has the jurisdiction to entertain a writ petition involving disputed questions of fact and there is no absolute bar for entertaining a writ petition even if the same arises out of a contractual obligation and/or involves some disputed questions of fact.

27. From the above discussion of ours, the following legal principles emerge as to the maintainability of a writ petition:

(a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable.

(b) Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule.

(c) A writ petition involving a consequential relief of monetary claim is also maintainable.”

While laying down the principle, the Court sounded a word of caution as under: (ABL International case, SCC p. 572, para 28) “28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corpn. v. Registrar of Trade Marks.) And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction.”

i) The Hon’ble Supreme Court in M.K. Jose (Supra) has further held See SCC Page 444 paragraph 18:

“18. It is appropriate to state here that in the said case, the Court granted the relief as the facts were absolutely clear from the documentary evidence brought which pertain to interpretation of certain clauses of contract of insurance. In that context, the Court opined: (ABL International Ltd. case, SCC p.

578, para 51) “51. … The terms of the insurance contract which were agreed between the parties were after the terms of the contract between the exporter and the importer were executed which included the addendum, therefore, without hesitation we must proceed on the basis that the first respondent issued the insurance policy knowing very well that there was more than one mode of payment of consideration and it had insured failure of all the modes of payment of consideration. From the correspondence as well as from the terms of the policy, it is noticed that existence of only two conditions has been made as a condition precedent for making the first respondent Corporation liable to pay for the insured risk, that is: (i) there should be a default on the part of the Kazak Corporation to pay for the goods received; and (ii) there should be a failure on the part of the Kazakhstan Government to fulfil their guarantee.” And it eventually held: (SCC pp. 578-79, para 51) “51. … We have come to the conclusion that the amended Clause 6 of the agreement between the exporter and the importer on the face of it does not give room for a second or another construction than the one already accepted by us. We have also noted that reliance placed on sub-clause (d) of the proviso to the insurance contract by the Appellate Bench is also misplaced which is clear from the language of the said clause WPA 1998 OF 2020 itself. Therefore, in our opinion, it does not require any external aid, much less any oral evidence to interpret the above clause. Merely because the first respondent wants to dispute this fact, in our opinion, it does not become a disputed fact. If such objection as to disputed questions or interpretations is raised in a writ petition, in our opinion, the courts can very well go into the same and decide that objection if facts permit the same as in this case.”

j) The Hon’ble Supreme Court in M.K. Jose (Supra) quoted with approval the following findings in Noble Resources Ltd. (supra) See SCC page 445 paragraph 19.

19. In this regard, a reference to Noble Resources Ltd. vs. State of Orissa would be seemly. The two-Judge Bench referred to ABL International Dwarkadas Marfatia & Sons v. Port of Bombay, Mahabir Auto Stores v. Indian Oil Corpn. and Jamshed Hormusji Wadia v. Port of Mumbai and opined thus: (Noble Resources case, SCC p. 246 para 29) “29. Although the scope of judicial review or the development of law in this field has been noticed hereinbefore particularly in the light of the decision of this Court in ABL International Ltd. each case, however, must be decided on its own facts. Public interest as noticed hereinbefore, may be one of the factors to exercise the power of judicial review. In a case where a public law element is involved, judicial review may be permissible. (See Binny Ltd. v. V. Sadasivan and G.B. Mahajan v. Jalgaon Municipal Council.)”

Thereafter, the Court in Noble Resources case, proceeded to analyse the facts and came to hold that certain serious disputed questions of facts have arisen for determination and such disputes ordinarily could not have been entertained by the High Court in exercise of its power of judicial review and ultimately the appeal was dismissed.”

k) Applying the ratio as laid down in the several Supreme Court judgements, referred to hereinabove, to the case in hand, I find that the sanction letter dated 5th September, 2005 issued by the respondent bank and accepted by the petitioners amounts to a non- statutory contract. It also falls within the third category of cases referred to in M/s Radhakrishna Agarwal (supra). The mortgage being a consolidated one along with valuation relied upon gives rise to disputed questions of fact and is not dependent on the interpretation of the clauses of contract alone. Any documentary evidence that may be brought through affidavits will also not improve the situation to enable the writ court to decide the issues raised. The judgement in ABL International (supra) therefor lays no assistance to the petitioner in the facts of the instant case. In that view of the matter, following the ratio laid down in M/s Radhakrishna Agarwal (supra) no writ of order can be issued under Article 226 of the WPA 1998 OF 2020 Constitution of India in such cases to compel “the authority to remedy a breach of contract pure and simple” is an accepted proposition. The writ petition, therefor, is not maintainable.

l) The contract between the respondent-bank and the petitioner clearly and unambiguously reveals that the petitioner after voluntarily accepting the conditions imposed by the respondent-bank have entered into the realm of concluded contract, pure and simple. The petitioner can only claim the right conferred upon it by the said contract and bound by the terms of the contract unless some statute steps in and confers some special statutory obligations on the part of the bank in the contractual field. The contract between the petitioner and the respondent-bank so far as the issue of release of mortgage upon repayment of a portion of the aggregate loan does not include any statutory terms and/or conditions. The petitioner’s remedy, if any lies for redemption of mortgage and not by filing writ petition seeking release of mortgage properties under the contract.

m) I have also considered the subject ‘contract’ from another angle. In the light of the ratio laid down in ABL International (Supra) assuming without admitting that the valuation of the mortgaged properties done by the Bank in 2018 relied upon by the petitioner to be a disputed question of fact and that a Civil proceeding is the alternative remedy available to the petitioner to redress his grievances does not create an impediment in exercising the writ jurisdiction, then also my answer will be the same as the contract in question is non-statutory WPA 1998 OF 2020 in nature wherein remedy for a breach of contract pure and simple has been sought for. There is no public interest element involved in the matter, no case to attract the provisions of Article 14 of the Constitution of India has also been made out. There is no mala fide or ulterior motive attributed to the bank which can compel interference under judicial review. The rejection to release the mortgaged properties does not involve any favouritism for which interference is required to prevent arbitrariness in the instant case. The bank has only said that unless the entire loan is repaid, the mortgage cannot be released. This does not mean that the bank has acted mala fide or with an ulterior motive. It has only conveyed its view on an appreciation of the contract between itself and the petitioner. Merely because the respondent bank acts in compliance with the Reserve Bank of India (RBI Guidelines) as held in Sagar Thomas (supra), the respondent petitioner though may be a nationalized bank, cannot be said to have failed in discharging any public function or public duty while carrying on business or commercial activity of Bank. Even if, a writ petition is maintainable against the respondent bank then also the facts of the instant case does not permit interference in the matter by this Court in exercise of its jurisdiction under Article 226.

Whether Daughter in Law can claim in the property of Mother in Law or Father in Law ?

The Hon’ble Delhi High Court held in the matter of AARTI SHARMA & ANR v. GANGA SARAN in RSA No. 14/2021 as under:-

  These are the relevant Paras:

20. Reliance is placed upon the judgment of the Hon’ble Supreme Court in Satish Chandra Ahuja (supra) to argue that in the said judgment, there is no observation to the effect that if the husband and the wife are living together, the right of the wife under the DV Act, to claim ‘shared household’ and the right to reside, can be taken away. Reliance is also placed on the judgment of the Supreme Court in S. Vanitha (supra) to argue that even in the said judgment, the daughter-in-law had not specifically filed a complaint under the DV Act, and the said judgment further explains the right to reside in detail, to the effect that even if the son and daughter-in-law are living together or if the son continues to live with the daughter-in-law, the right of the daughter-in-law to reside in the matrimonial home cannot be defeated.

Analysis and Findings:

I. On Condonation of delay in filing the appeal

21. CM Appl. 21708/2021 and CM Appl. 3966/2021 are applications that have been filed on behalf of the Defendants, seeking condonation of delay in filing the present second appeal. The impugned order in this case was passed on 16th November, 2019. The Defendants applied for a certified copy on 9th December, 2019, which was received on 13th January, 2020. As per the Supreme Court order in In Re: Cognizance for extension of limitation (supra), the period of 15th March, 2020 till 14 th March, 2021 is to be excluded while calculating the limitation period, in light of the COVID19 pandemic. Accordingly, after deducting the period during which the certified copy was to be issued by the Court, the limitation of 90 days to file the present second appeal, has not expired prior to 15 th March, 2020. The appeal was filed on 25th January, 2021, which is within the period excluded by the Supreme Court’s order.

22. Considering these facts, there is no delay in filing the present appeal. However, the Defendants have filed these applications by way abundant caution. Accordingly, the delay, if any, in filing the present appeal stands condoned. Applications are disposed of.

II. On the merits of the present second appeal

23. This court has heard ld. counsels for the parties from time to time, and has perused the record. The ld. Counsel for the Appellants/Defandants has placed vehement reliance on the judgments recently delivered by the Supreme Court on the issue of ‘shared household’ in the context of the DV Act. The fact that the Plaintiff is the owner of the suit property is not disputed. However, some arguments have been raised in respect of how the Plaintiff got ownership of the property. Primarily however, as a question of law in this second appeal, the only submission urged is in respect of the suit property being a ‘shared household’ or matrimonial home for the daughterin-law. Thus, before dealing with the merits of the matter, it is necessary to consider the judgments cited by the ld. Counsels for the parties.

Case laws

24. In Satish Chandra Ahuja (supra) the Supreme Court was dealing with a dispute between in-laws and son on the one hand, and the daughterin-law on the other hand. There were various cases pending between the son and the daughter-in-law, including a divorce petition under Section 13 (1A) of the Hindu Marriage Act, 1955, and an application under Section 12 of the DV Act alleging severe emotional and mental abuse. A suit for injunction was filed by the father-in-law against the daughter-in-law without impleading the son. The daughter-in-law, who was having marital disputes with her husband, had in her defence claimed that the New Friends Colony residence, which was her matrimonial home, would be a ‘shared household’ in terms of Section 2 (s) of the DV Act, and accordingly she could not be evicted from the same. The Trial Court had passed a decree of eviction under Order 12 Rule 6 of CPC, against the daughter-in-law, in the said suit. The said order of the Trial Court was appealed against, by the daughter-in- law, and the High Court had set aside the decree passed by the Trial Court and remanded the matter for fresh adjudication. The High Court had refrained from determining as to whether the premises of the father-in-law would be a ‘shared household’ or not and had remanded the matter for trial. The said decision of the High Court was challenged before the Supreme Court. The Supreme Court, in this background, gave the following findings:

“i) The definition of ‘shared household’ under Section 2(s) of the DV Act, is an exhaustive definition.

ii) The ‘shared household’ could belong to any relative of the husband, with whom the daughter-in-law may have lived.

iii) The Supreme Court also held that the right to residence, as provided to the daughter-in-law under Section 19 of the DV Act, is not an indefeasible right, and hence the Court has to balance the rights of the parties.”

25. The observations of the Supreme Court are as under:

“83. Before we close our discussion on Section 2(s), we need to observe that the right to residence under Section 19 is not an indefeasible right of residence in shared household especially when the daughterin-law is pitted against aged father-in-law and mother-in-law. The senior citizens in the evening of their life are also entitled to live peacefully not haunted by marital discord between their son and daughter-in-law. While granting relief both in application under Section 12 of Act, 2005 or in any civil proceedings, the Court has to balance the rights of both the parties. The directions issued by High court in paragraph 56 adequately balances the rights of both the parties.”

26. The Supreme Court further went on to observe that the claim of the Defendant that the suit property is a ‘shared household’, ought to have been considered by the trial Court. It held that a decree under Order 12 Rule 6 is discretionary and not a matter of right. It further held that the proceedings under the DV Act and the civil suit are independent proceedings and the order passed by the Magistrate in a DV Act proceeding would be of evidentiary value in the suit, but of a limited nature, as the issues raised in the civil suit are to be determined by the trial Court. Finally, the Supreme Court observed that relief under the DV Act can be sought in any legal proceeding, including a Civil Court. Family Court or a Criminal Court by the aggrieved person. The said observations of the Supreme Court are as under:

“93. As per Section 26, any relief available under Sections 18, 19, 20, 21 and 22 of the Act, 2005 may also be sought in any legal proceeding, before a civil court, family court or a criminal court being the aggrieved person. Thus, the defendant is entitled to claim relief under Section 19 in suit, which has been filed by the plaintiff. Section 26 empowers the aggrieved person to claim above relief in Civil Courts also.

xx”

27. After analysing the law to the facts of the case, the court upheld the judgment of the High Court, setting aside the decree under Order 12 Rule 6 of the CPC and remanding the matter for fresh adjudication

28. In the case of S. Vanitha (supra), the dispute arose between both the in-laws on the one hand, and the daughter-in-law, on the other. The son was also impleaded as a party. The in-laws, in the said case, had preferred an application under the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 (hereinafter, “Senior Citizens Act)” and sought eviction of their daughter-in-law and grand-daughter. The authorities under the Senior Citizens Act directed the Defendant/ daughter-in-law in the said case, to vacate the premises. The same was upheld by the Division Bench of the Karnataka High Court, which held that the remedy of the daughter-in-law to seek maintenance and shelter, lies only against the husband i.e., the son, and accordingly the eviction order was valid. This judgment of the Karnataka High Court was challenged before the Supreme Court. The Supreme Court considered the right of residence given to the daughter-in-law, under the provisions of the DV Act, as also the relevance of the provisions of the Senior Citizens Act

29. The Supreme Court held that the intention of the legislators would be to read the said two legislations harmoniously, as both deal with the salutary aspects of public welfare and interest. It held that the Senior Citizens Act cannot have an overriding force in all situations irrespective of competing entitlements of a women in a ‘shared household’, as the same would defeat the purpose of the DV Act. The provisions of both the Acts cannot be ignored and have to be harmoniously construed. The relevant observations of the Supreme Court are as under:

“… The law protecting the interest of senior citizens is intended to ensure that they are not left destitute, or at the mercy of their children or relatives. Equally, the purpose of the PWDV Act 2005 cannot be ignored by a sleight of statutory interpretation. Both sets of legislations have to be harmoniously construed. Hence the right of a woman to secure a residence order in respect of a shared household cannot be defeated by the simple expedient of securing an order of eviction by adopting the summary procedure under the Senior Citizens Act 2007.”

30. The Supreme Court further observed that both these legislations are special legislations. Section 3 of the Senior Citizens Act cannot override and nullify other provisions of law, including Section 17 of the DV Act. Applying the said law to the facts, the Supreme Court then emphasized upon the series of transactions in respect of the subject property from which the daughter-in-law was to be evicted. The Supreme Court observed that the said property was originally bought in the name of the son, just a few months before the marriage, and was sold a few years later at the same price to the father-in-law. The father-in-law then gifted the property to the mother-in-law, after divorce proceedings were initiated between the son and the daughter in law. The daughter-in-law had also filed proceedings for maintenance under the Hindu Marriage Act. In the said background of the two proceedings filed by the son and the daughter-in-law against each other, the application under the Senior Citizens Act came to be filed by the fatherin-law. In that context the Supreme Court held as under:

“….A shared household would have to be interpreted to include the residence where the appellant had been jointly residing with her husband. Merely because the ownership of the property has been subsequently transferred to her in-laws (Second and Third Respondents) or that her estranged spouse (Fourth respondent) is now residing separately, is no ground to deprive the appellant of the protection that was envisaged under the PWDV Act 2005.”

31. The Supreme Court, thereafter, restrained the in-laws from evicting the daughter-in-law for a period of one year, in order to enable her to avail of her remedies in accordance with law. The operative portion of the judgement in Smt. Vanitha (supra) reads:

“For the above reasons, while allowing the appeal, we issue the following directions:

i) The impugned judgment and order of the Division Bench of the High Court of Karnataka dated 17 September 2019 affirming the order of eviction against the appellant shall stand set aside with the consequence that the order of the Assistant Commissioner ordering and directing the appellant to vacate the suit premises shall stand set aside;

ii) We leave it open to the appellant to pursue her remedies under the PWDV Act 2005. For that purpose, it would be open to the appellant to seek the help of the District Legal Services Authorities and if the appellant does so, all necessary aid and assistance shall be furnished to her in pursuing her legal remedies and rights;

iii) IA 111352/2020 for restoration of the electricity connection is allowed by directing the Fourth respondent to take all necessary steps for restoration of the electricity connection to the premises within a period of two weeks from the receipt of a certified copy of this judgment. The Fourth respondent shall also continue to pay the electricity dues in future; and

iv) In order to enable the appellant to pursue her remedies under the PWDV Act 2005, there shall be an order and direction restraining the respondents from forcibly dispossessing the appellant, disposing of the premises or from creating any right, title and interest in favour of any third party in any manner whatsoever for a period of one year, to enable the appellant to pursue her remedies in accordance with law. The appellant is at liberty to move the Court to espouse her remedies under the PWDV Act 2005 for appropriate orders, including interim protections.”

32. Previously, in Vinay Verma vs. Kanika Pasricha and Ors., 265 (2019) DLT 211 , this Court had the opportunity to examine both the Senior Citizens Act as also the DV Act, and had laid down certain guidelines to be followed by Courts, in order to strike a balance between the said two acts. The said guidelines read as under:

“1. The court/tribunal has to first ascertain the nature of the relationship between the parties and the son’s/ daughter’s family

2. If the case involves eviction of a daughter in law, the court has to also ascertain whether the daughter-in-law was living as part of a joint family.

3. If the relationship is acrimonious, then the parents ought to be permitted to seek eviction of the son/daughter-in-law or daughter/son- in-law from their premises. In such circumstances, the obligation of the husband to maintain the wife would continue in terms of the principles under the DV Act.

4. If the relationship between the parents and the son are peaceful or if the parents are seen colluding with their son, then, an obligation to maintain and to provide for the shelter for the daughter-in-law would remain both upon the inlaws and the husband especially if they were living as part of a joint family. In such a situation, while parents would be entitled to seek eviction of the daughter-in-law from their property, an alternative reasonable accommodation would have to be provided to her.

5. In case the son or his family is ill-treating the parents then the parents would be entitled to seek unconditional eviction from their property so that they can live a peaceful life and also put the property to use for their generating income and for their own expenses for daily living.

6. If the son has abandoned both the parents and his own wife/children, then if the son’s family was living as part of a joint family prior to the breakdown of relationships, the parents would be entitled to seek possession from their daughter-inlaw, however, for a reasonable period they would have to provide some shelter to the daughter-inlaw during which time she is able to seek her remedies against her husband.”

Applicability of the law to the facts

33. The facts of the present case show that the suit before the Trial Court was instituted by the Plaintiff against both his son and his daughter-in-law. Undisputedly, the Plaintiff is not in a good financial condition, and in fact was required to avail of legal-aid, to be able to pursue the suit before the Trial Court.

34. The suit property was purchased by the Plaintiff on 26th December, 2011. His son got married in the year 2005 and both the son and daughterin-law started living in the suit property on the ground floor. Several disputes arose amongst the said family members, which, according to the Plaintiff, were due to the interference of the family members of the daughter-in-law, including the mother and the brothers of the daughter-inlaw. The Plaintiff is stated to have suffered various severe medical problems including a stroke and paralysis. The Plaintiff’s mother i.e., the grandmother of the son- is 85 years old and is also handicapped. She is living with the Plaintiff.

35. The Plaintiff had filed various complaints with the ACP, Bhajanpura, on 27th June, 2006, 10th June, 2006, 2nd April, 2008, 21st July, 2010, 22nd July, 2010 and 30th July, 2010, alleging humiliation, agony and threats by the Defendants. An application under the Senior Citizens Act was also filed by the Plaintiff in 2015, but no orders were passed in the same. The Plaintiff then disowned his son and got a publication issued to this effect on 27th December, 2015.

36. The Defendants, i.e., the son and daughter-in-law are employed. The daughter-in-law is a teacher and the son works as a sales agent in a showroom. The Defendants are stated to have threatened the Plaintiff that they would implicate him in a dowry case

Mutation of Property in Revenue Records Does Not Gives or Confirm Any Right Title Or Interest In Favour of Any Person.

Mutation of Property in Revenue Records Does Not Give or Confirm Any Right, Title Or Interest In Favour Of Any Person.

Right from 1997, the law is very clear. In the case of Balwant Singh v. Daulat Singh (D) By Lrs., reported in (1997) 7 SCC 137, this Court had an occasion to consider the effect of mutation and it is observed and held that mutation of property in revenue records neither creates nor extinguishes title to the property nor has it any presumptive value on title. Such entries are relevant only for the purpose of collecting land revenue. Similar view has been expressed in the series of decisions thereafter.

6.1 In the case of Suraj Bhan v. Financial Commissioner, (2007) 6 SCC 186, it is observed and held by this Court that an entry in revenue records does not confer title on a person whose name appears in record-of-rights. Entries in the revenue records or jamabandi have only “fiscal purpose”, i.e., payment of land revenue, and no ownership is conferred on the basis of such entries. It is further observed that so far as the title of the property is concerned, it can only be decided by a competent civil court. Similar view has been expressed in the cases of Suman Verma v. Union of India, (2004) 12 SCC 58; Faqruddin v. Tajuddin (2008) 8 SCC 12; Rajinder Singh v. State of J&K, (2008) 9 SCC 368; Municipal Corporation, Aurangabad v. State of Maharashtra, (2015) 16 SCC 689; T. Ravi v. B. Chinna Narasimha, (2017) 7 SCC 342; Bhimabai Mahadeo Kambekar v. Arthur Import & Export Co., (2019) 3 SCC 191; Prahlad Pradhan v. Sonu Kumhar, (2019) 10 SCC 259; and Ajit Kaur v. Darshan Singh, (2019) 13 SCC 70.

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         IN THE SUPREME COURT OF INDIA

        CIVIL APPELLATE JURISDICTION

 SPECIAL LEAVE PETITION (C) No. 13146/2021

 JITENDRA SINGH Petitioner(s) VERSUS THE STATE OF MADHYA PRADESH & ORS

.O R D E R

 1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 13.03.2020 passed by the High Court of Madhya Pradesh, Principal Seat at Jabalpur in M.P. No. 508 of 2019, by which the High Court has allowed the said writ petition and has quashed and set aside the order passed by the Additional Commissioner, Rewa Division, Rewa, directing to mutate the name of the petitioner herein in the revenue records, which was sought to be mutated on the basis of the will, the original respondent no.6 has preferred the present special leave petition.

 2. That the petitioner herein filed an application under Section 109/110 of the Madhya Pradesh Land Revenue Code to mutate his name in the revenue records in respect of Khasra No. 41/03, 101/03, 314/03, 102/02, 132/02, 133/03, 142/02, 145/02, 146/02, 313/01, total area of 4.53 acres situated in village Dudha, Tehsil Rampur Baghelan, District Satna, on the basis of the alleged will executed by one Smt. Ananti Bai, widow of Bhagwandeen Bargahi – his maternal grandmother. The alleged will was executed on 20.05.1998. It is required to be noted that though initially it was the case on behalf of the petitioner that Smt. Ananti 2 died on 20.05.1998, however, subsequently, it was stated that there was a typographical error and Smt. Ananti Bai died on 27.08.2011. It is to be noted that the application for mutation was filed on 9.8.2011, i.e., even prior to the death of Smt. Ananti Bai. Therefore, even the application was filed against Ananti Bai when she was alive.

3. By order dated 30.09.2011, the Nayab Tehsildar, District Satna directed to mutate the name of the petitioner herein in the revenue records in respect of the aforesaid lands solely on the basis of the alleged will dated 20.05.1998. The legal heirs and daughters of Smt. Ananti Bai preferred appeal before the Sub-Divisional Officer, Tehsil Rampur Baghelan, District Satna, Madhya Pradesh. The SDO allowed the said appeal and set aside the order passed by the Nayab Tehsildar directing to mutate the name of the petitioner herein in the revenue records. The petitioner herein preferred appeal before the learned Additional Commissioner, Rewa Division, Rewa challenging the order passed by the SDO dated 12.09.2018. The learned Additional Commissioner, Rewa Division, Rewa allowed the said appeal and quashed and set aside the order passed by the SDO dated 12.09.2018 and consequently the order passed by the Nayab Tehsildar directing to mutate the name of the petitioner herein in the revenue records on the basis of the alleged will dated 20.05.1998 came to be restored. By the impugned judgment and order, the High Court has set aside the order passed by the Additional Commissioner observing that once the will is disputed and even otherwise the petitioner who is claiming rights/title on the basis of the will executed by the deceased Ananti Bai, the remedy available to the petitioner would be to file a suit and crystalise his rights and only thereafter the necessary consequence shall follow.

4. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court, the original applicant has preferred the present special leave petition.

 5. We have heard Shri Nishesh Sharma, learned Advocate appearing for the petitioner. It is not in dispute that the dispute is with respect to mutation entry in the revenue records. The petitioner herein submitted an application to mutate his name on the basis of the alleged will dated 20.05.1998 executed by Smt. Ananti Bai. Even, according to the petitioner also, Smt. Ananti Bai died on 27.08.2011. From the record, it emerges that the application before the Nayab Tehsildar was made on 9.8.2011, i.e., before the death of Smt. Ananti Bai. It cannot be disputed that the right on the basis of the will can be claimed only after the death of the executant of the will. Even the will itself has been disputed. Be that as it may, as per the settled proposition of law, mutation entry does not confer any right, title or interest in favour of the person and the mutation entry in the revenue record is only for the fiscal purpose. As per the settled proposition of law, if there is any dispute with respect to the title and more particularly when the mutation entry is sought to be made on the basis of the will, the party who is claiming title/right on the basis of the will has to approach the appropriate civil court/court and get his rights crystalised and only thereafter on the basis of the decision before the civil court necessary mutation entry can be made

 6. Right from 1997, the law is very clear. In the case of Balwant Singh v. Daulat Singh (D) By Lrs., reported in (1997) 7 SCC 137, this Court had an occasion to consider the effect of mutation and it is observed and held that mutation of property in revenue records neither creates nor extinguishes title to the property nor has it any presumptive value on title. Such entries are relevant only for the purpose of collecting land revenue. Similar view has been expressed in the series of decisions thereafter.

6.1 In the case of Suraj Bhan v. Financial Commissioner, (2007) 6 SCC 186, it is observed and held by this Court that an entry in revenue records does not confer title on a person whose name appears in record-of-rights. Entries in the revenue records or jamabandi have only “fiscal purpose”, i.e., payment of land revenue, and no ownership is conferred on the basis of such entries. It is further observed that so far as the title of the property is concerned, it can only be decided by a competent civil court. Similar view has been expressed in the cases of Suman Verma v. Union of India, (2004) 12 SCC 58; Faqruddin v. Tajuddin (2008) 8 SCC 12; Rajinder Singh v. State of J&K, (2008) 9 SCC 368; Municipal Corporation, Aurangabad v. State of Maharashtra, (2015) 16 SCC 689; T. Ravi v. B. Chinna Narasimha, (2017) 7 SCC 342; Bhimabai Mahadeo Kambekar v. Arthur Import & Export Co., (2019) 3 SCC 191; Prahlad Pradhan v. Sonu Kumhar, (2019) 10 SCC 259; and Ajit Kaur v. Darshan Singh, (2019) 13 SCC 70.

7. In view of the above settled proposition of law laid down by this Court, it cannot be said that the High Court has committed any error in setting aside the order passed by the revenue authorities directing to mutate the name of the petitioner herein in the revenue records on the basis of the alleged will dated 20.05.1998 and relegating the petitioner to approach the appropriate court to crystalise his rights on the basis of the alleged will dated 20.05.1998. We are in complete agreement with the view taken by the High Court.

8. The special leave petition is accordingly dismissed.

 9. Pending applications shall stand disposed of

Whether A Plaint or suit can be rejected under order VII Rule 11 of CPC on grounds of Res Judicata ?

Order 7 Rule 11 of the CPC reads as follows:

“11. Rejection of plaint.— The plaint shall be rejected in the following cases:—

(a) where it does not disclose a cause of action;

(b) where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so;

(c) where the relief claimed is properly valued, but the plaint is returned upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so;

(d) where the suit appears from the statement in the plaint to be barred by any law;

[(e) where it is not filed in duplicate;] [(f) where the plaintiff fails to comply with the provisions of rule 9:] [Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.]” (emphasis supplied) 16 Order 7 Rule 11(d) of CPC provides that the plaint shall be rejected “where the suit appears from the statement in the plaint to be barred by any law”. Hence, in order to decide whether the suit is barred by any law, it is the statement in the plaint which will have to be construed. The Court while deciding such an application must
have due regard only to the statements in the plaint. Whether the suit is barred by any law must be determined from the statements in the plaint and it is not open to decide the issue on the basis of any other material including the written statement in the case. Before proceeding to refer to precedents on the interpretation of Order 7 Rule 11(d) CPC, we find it imperative to refer to Section 11 of CPC which defines res judicata:

“11. Res judicata.—No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court.” 17 Section 11 of the CPC enunciates the rule of res judicata : a court shall not try any suit or issue in which the matter that is directly in issue has been directly or indirectly heard and decided in a ‘former suit’. Therefore, for the purpose of adjudicating on the issue of res judicata it is necessary that the same issue (that is raised in the suit) has been adjudicated in the former suit. It is necessary that we refer to the exercise taken up by this Court while adjudicating on res judicata, before referring to res judicata as a ground for rejection of the plaint under Order 7 Rule 11.

Justice R C Lahoti (as the learned Chief Justice then was), speaking for a two Judge bench in V. Rajeshwari v. T.C. Saravanabava5 discussed the plea of res judicata and the particulars that would be required to prove the plea. The court held that it is (2004) 1 SCC 551.

necessary to refer to the copies of the pleadings, issues and the judgment of the ‘former suit’ while adjudicating on the plea of res judicata:

“11. The rule of res judicata does not strike at the root of the jurisdiction of the court trying the subsequent suit. It is a rule of estoppel by judgment based on the public policy that there should be a finality to litigation and no one should be vexed twice for the same cause.

13. Not only the plea has to be taken, it has to be substantiated by producing the copies of the pleadings, issues and judgment in the previous case. Maybe, in a given case only copy of judgment in previous suit is filed in proof of plea of res judicata and the judgment contains exhaustive or in requisite details the statement of pleadings and the issues which may be taken as enough proof. But as pointed out in Syed Mohd. Salie Labbai v. Mohd. Hanifa [(1976) 4 SCC 780] the basic method to decide the question of res judicata is first to determine the case of the parties as put forward in their respective pleadings of their previous suit and then to find out as to what had been decided by the judgment which operates as res judicata. It is risky to speculate about the pleadings merely by a summary of recitals of the allegations made in the pleadings mentioned in the judgment. The Constitution Bench in Gurbux Singh v. Bhooralal [AIR 1964 SC 1810 : (1964) 7 SCR 831] placing on a par the plea of res judicata and the plea of estoppel under Order 2 Rule 2 of the Code of Civil Procedure, held that proof of the plaint in the previous suit which is set to create the bar, ought to be brought on record. The plea is basically founded on the identity of the cause of action in the two suits and, therefore, it is necessary for the defence which raises the bar to establish the cause of action in the previous suit. Such pleas cannot be left to be determined by mere speculation or inferring by a process of deduction what were the facts stated in the previous pleadings. Their Lordships of the Privy Council in Kali Krishna Tagore v. Secy. of State for India in Council [(1887-88) 15 IA 186 : ILR 16 Cal 173] pointed out that the plea of res judicata cannot be determined without ascertaining what were the matters in issue in the previous suit and what was heard and decided.

Needless to say, these can be found out only by looking into the pleadings, the issues and the judgment in the previous suit.” (emphasis supplied)
18 At this stage, it would be necessary to refer to the decisions that particularly deal with the question whether res judicata can be the basis or ground for rejection of the plaint. In Kamala & others v. KT Eshwara Sa6, the Trial Judge had allowed an application for rejection of the plaint in a suit for partition and this was affirmed by the High Court. Justice S B Sinha speaking for the two judge bench examined the ambit of Order 7 Rule 11(d) of the CPC and observed:

“21. Order 7 Rule 11(d) of the Code has limited application. It must be shown that the suit is barred under any law. Such a conclusion must be drawn from the averments made in the plaint. Different clauses in Order 7 Rule 11, in our opinion, should not be mixed up. Whereas in a given case, an application for rejection of the plaint may be filed on more than one ground specified in various sub-clauses thereof, a clear finding to that effect must be arrived at. What would be relevant for invoking clause (d) of Order 7 Rule 11 of the Code are the averments made in the plaint. For that purpose, there cannot be any addition or subtraction. Absence of jurisdiction on the part of a court can be invoked at different stages and under different provisions of the Code. Order 7 Rule 11 of the Code is one, Order 14 Rule 2 is another.

22. For the purpose of invoking Order 7 Rule 11(d) of the Code, no amount of evidence can be looked into. The issues on merit of the matter which may arise between the parties would not be within the realm of the court at that stage. All issues shall not be the subject-matter of an order under the said provision.” (emphasis supplied) The Court further held:

“23. The principles of res judicata, when attracted, would bar another suit in view of Section 12 of the Code. The question involving a mixed question of law and fact which may require not only examination of the plaint but also other evidence and the order passed in the earlier suit may be taken up either as a (2008) 12 SCC 661.

 preliminary issue or at the final hearing, but, the said question cannot be determined at that stage

“18. It is clear that in order to consider Order 7 Rule 11, the court has to look into the averments in the plaint and the same can be exercised by the trial court at any stage of the suit. It is also clear that the averments in the written statement are immaterial and it is the duty of the Court to scrutinize the averments/pleas in the plaint. In other words, what needs to be looked into in deciding such an application are the averments in the plaint. At that stage, the pleas taken by the defendant in the written statement are wholly irrelevant and the matter is to be decided only on the plaint averment. These principles have been reiterated in Raptakos Brett & Co. Ltd. v. Ganesh Property, (1998) 7 SCC 184 and Mayar (H.K.) Ltd. v. Vessel M.V. Fortune Express, (2006) 3 SCC 100.” 20 On a perusal of the above authorities, the guiding principles for deciding an application under Order 7 Rule 11(d) can be summarized as follows:

(i) To reject a plaint on the ground that the suit is barred by any law, only the averments in the plaint will have to be referred to;

(ii) The defense made by the defendant in the suit must not be considered while deciding the merits of the application;

(iii) To determine whether a suit is barred by res judicata, it is necessary that (i) the ‘previous suit’ is decided, (ii) the issues in the subsequent suit were directly and substantially in issue in the former suit; (iii) the former suit was between the same parties or parties through whom they claim, litigating under the same title; and (iv) that these issues were adjudicated and finally decided by a court competent to try the subsequent suit; and

(iv) Since an adjudication of the plea of res judicata requires consideration of the pleadings, issues and decision in the ‘previous suit’, such a plea will be beyond the scope of Order 7 Rule 11 (d), where only the statements in the plaint will have to be perused.

In the matter of Srihari Hanumandas Totala vs Hemant Vithal Kamat in Civil Appeal No 4665 2021, The Hon’ble Apex Court held that :

21 In the present case, a meaningful reading of the plaint makes it abundantly clear that when the first respondent instituted the subsequent suit, he had been impleaded as the second defendant to the earlier suit (OS No. 103/2007) that was instituted on 13 March 2007. The first respondent instituted the subsequent suit, OS 138/2008 though he had knowledge of the earlier suit. The plaint in the subsequent suit which was instituted by the first respondent indicates that the he was aware of the mortgage executed in favour of KSFC, that KSFC had executed its charge by selling the property for the recovery of its dues and that the property had been sold on 8 August 2006 in favour of the predecessor of the appellant. As a matter of fact, the plaint contains an averment that there was every possibility that the first respondent may suffer a decree for possession in OS 103/2007 which “has forced” the first respondent to institute the suit for challenging the legality of the sale deed. Given the fact that an argument was raised in the previous suit regarding no challenge having been made to the auction and the subsequent sale deed executed by the KFSC, it is possible that the first respondent then decided to exercise his rights and filed the subsequent suit. Be that as it may, on a reading of the plaint, it is evident that the first respondent has not made an attempt to conceal the fact that a suit regarding the property was pending before the civil court at the time. It is also relevant to note that at the time of institution of the suit (OS No. 138/2008) by the first respondent, no decree had been passed by the civil court in OS No. 103/2007.

Thus, the issues raised in OS No. 103/2007, at the time, had not been adjudicated upon. Therefore, the plaint, on the face of it, does not disclose any fact that may lead us to the conclusion that it deserves to be rejected on the ground that it is barred by principles of res judicata. The High Court and the Trial Court were correct in their approach in holding, that to decide on the arguments raised by the appellant, the court would have to go beyond the averments in the plaint, and peruse the pleadings, and judgment and decree in OS No. 103/2007. An application under Order 7 Rule 11 must be decided within the four corners of the plaint. The Trial court and High Court were correct in rejecting the application under order 7 Rule 11(d). 22 For the above reasons, we hold that the plaint was not liable to be rejected under Order 7 Rule 11(d) and affirm the findings of the Trial Court and the High Court. We clarify however, that we have expressed no opinion on whether the subsequent suit is barred by the principles of res judicata. We grant liberty to the appellant, who claims as an assignee of the bona fide purchaser of the suit property in an auction conducted by KSFC, to raise an issue of the maintainability of the suit before the Additional Civil Judge, Belgaum in OS No. 138/2008. The Additional Civil Judge, Belgaum shall consider whether a preliminary issue should be framed under Order XIV, and if so, decide it within a period of 3 months of raising the preliminary issue. In any event, the suit shall be finally adjudicated upon within the outer limit of 31 March 2022.

23 For the above reasons, we dismiss the appeal and affirm the impugned judgment and order of the High Court dated 18 January 2021. The application under Order 7 Rule 11 of the CPC shall stand dismissed. There shall be no orders as to costs.

24 Pending application(s), if any, stand disposed of.

Power Under Order VII Rule 11 CPC Can Be Exercised At Any Stage of Suit.

The Hon’ble Supreme Court in the Matter of Dahiben vs Arvindbhai Kalyanji Bhanusali  held that and reffered and discussed several judgments as under:-

Under Order VII Rule 11, a duty is cast on the Court to determine whether the plaint discloses a cause of action by scrutinizing the averments in the plaint2, read in conjunction with the documents relied upon, or whether the suit is barred by any law.

12.4 Order VII Rule 14(1) provides for production of documents, on which the plaintiff places reliance in his suit, which reads as under :

“Order 7 Rule 14: Production of document on which plaintiff sues or relies.– (1)Where a plaintiff sues upon a document or relies upon document in his possession or power in support of his claim, he shall enter such documents in a list, and shall produce it in Court when the plaint is presented by him and shall, at 2 Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I & Anr., (2004) 9 SCC 512.

 the same time deliver the document and a copy thereof, to be filed with the plaint.

(2)Where any such document is not in the possession or power of the plaintiff, he shall, wherever possible, state in whose possession or power it is.

(3)A document which ought to be produced in Court by the plaintiff when the plaint is presented, or to be entered in the list to be added or annexed to the plaint but is not produced or entered accordingly, shall not, without the leave of the Court, be received in evidence on his behalf at the hearing of the suit.

(4)Nothing in this rule shall apply to document produced for the cross examination of the plaintiff’s witnesses, or, handed over to a witness merely to refresh his memory.” (emphasis supplied) Having regard to Order VII Rule 14 CPC, the documents filed alongwith the plaint, are required to be taken into consideration for deciding the application under Order VII Rule 11 (a). When a document referred to in the plaint, forms the basis of the plaint, it should be treated as a part of the plaint.

12.5 In exercise of power under this provision, the Court would determine if the assertions made in the plaint are contrary to statutory law, or judicial dicta, for deciding whether a case for rejecting the plaint at the threshold is made out.

12.6 At this stage, the pleas taken by the defendant in the written statement and application for rejection of the plaint
 on the merits, would be irrelevant, and cannot be adverted to, or taken into consideration.3 12.7 The test for exercising the power under Order VII Rule 11 is that if the averments made in the plaint are taken in entirety, in conjunction with the documents relied upon, would the same result in a decree being passed. This test was laid down in Liverpool & London S.P. & I Assn. Ltd. v. M.V.Sea Success I & Anr.,4 which reads as :

“139. Whether a plaint discloses a cause of action or not is essentially a question of fact. But whether it does or does not must be found out from reading the plaint itself. For the said purpose, the averments made in the plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed.” In Hardesh Ores (P.) Ltd. v. Hede & Co.5 the Court further held that it is not permissible to cull out a sentence or a passage, and to read it in isolation. It is the substance, and not merely the form, which has to be looked into. The plaint has to be construed as it stands, without addition or subtraction of words. If the allegations in the plaint prima facie show a cause of action, the court 3 Sopan Sukhdeo Sable v. Assistant Charity Commissioner, (2004) 3 SCC 137 4 (2004) 9 SCC 512.

 cannot embark upon an enquiry whether the allegations are true in fact.6 12.8 If on a meaningful reading of the plaint, it is found that the suit is manifestly vexatious and without any merit, and does not disclose a right to sue, the court would be justified in exercising the power under Order VII Rule 11 CPC. 12.9 The power under Order VII Rule 11 CPC may be exercised by the Court at any stage of the suit, either before registering the plaint, or after issuing summons to the defendant, or before conclusion of the trial, as held by this Court in the judgment of Saleem Bhai v. State of Maharashtra.7 The plea that once issues are framed, the matter must necessarily go to trial was repelled by this Court in Azhar Hussain (supra).

12.10 The provision of Order VII Rule 11 is mandatory in nature. It states that the plaint “shall” be rejected if any of the grounds specified in clause (a) to (e) are made out. If the Court finds that the plaint does not disclose a cause of action, or that the suit is barred by any law, the Court has no option, but to reject the plaint.

6 D. Ramachandran v. R.V. Janakiraman, (1999) 3 SCC 267; See also Vijay Pratap Singh v. Dukh Haran Nath Singh, AIR 1962 SC 941.

7 (2003) 1 SCC 557.

13. “Cause of action” means every fact which would be necessary for the plaintiff to prove, if traversed, in order to support his right to judgment. It consists of a bundle of material facts, which are necessary for the plaintiff to prove in order to entitle him to the reliefs claimed in the suit.

In Swamy Atmanand v. Sri Ramakrishna Tapovanam8 this Court held :

“24. A cause of action, thus, means every fact, which if traversed, it would be necessary for the plaintiff to prove an order to support his right to a judgment of the court. In other words, it is a bundle of facts, which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act, no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded” (emphasis supplied) In T. Arivandandam v. T.V. Satyapal & Anr.9 this Court held that while considering an application under Order VII Rule 11 CPC what is required to be decided is whether the plaint discloses a real cause of action, or something purely illusory, in the following words : –

“5. …The learned Munsiff must remember that if on a meaningful – not formal – reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under O. VII, R. 11, C.P.C. taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has 8 (2005) 10 SCC 51.

 created the illusion of a cause of action, nip it in the bud at the first hearing …” (emphasis supplied) Subsequently, in I.T.C. Ltd. v. Debt Recovery Appellate Tribunal,10 this Court held that law cannot permit clever drafting which creates illusions of a cause of action. What is required is that a clear right must be made out in the plaint.

If, however, by clever drafting of the plaint, it has created the illusion of a cause of action, this Court in Madanuri Sri Ramachandra Murthy v. Syed Jalal11 held that it should be nipped in the bud, so that bogus litigation will end at the earliest stage.

The Court must be vigilant against any camouflage or suppression, and determine whether the litigation is utterly vexatious, and an abuse of the process of the court.

14. The Limitation Act, 1963 prescribes a time-limit for the institution of all suits, appeals, and applications. Section 2(j) defines the expression “period of limitation” to mean the period of limitation prescribed in the Schedule for suits, appeals or applications. Section 3 lays down that every suit instituted after the prescribed period, shall be dismissed even though limitation 10 (1998) 2 SCC 170.

Civil Lawyer Prachi Singh in Delhi.

Advocate Prachi Singh

Prachi Singh Advocate is B.com,LLB,MBA is a practicing Lawyer at Supreme Court of India, Delhi High Court and all Districts Courts, She is advising and contesting the Civil Matters Like Civil Recovery Money Suit, Suit for Injunction and Possession, Suit related to specific relief Act, Suit for Anti Injunction, Suit for Partition and Injunction, Suit related to contract, Suit related to Will and Probate Cases in High Court and Districts Courts, Suit for Agreement disputes, suit or civil writ petition related to contract disputes at High Court, Arbitration Matters, Writ Petition related to contractual employees at High Court, Writ Petition related to bank guarantee, Service matters at Central Administrative Tribunal ( CAT), Service Matters in Delhi High Court, Writ Petition in Service matters in Delhi High Court, Suit related to Property disputes, Suit related to rendition of Account, Civil Revision Petition in Districts court and High Court, Civil Appeals in Districts courts and in High Court, Civil Money Recovery Suit under XXXVII of CPC,..and all kind of Civil Suit at all Districts Court, Supreme Court and High Court.

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Builder is liable to compensate if project is delayed.

In a recent decision in CC No. 368/2014, Shweta Kapoor & Anr. Vs. M/s. Unitech Ltd. & Anr., decided on 14.01.2016, the complainants had agreed to purchase a residential flat from the opposite party Unitech Ltd. in a project which it was developing in Sector-50 of Gurgaon and had made payment of Rs. 95.5% of the total sale consideration. The Buyers Agreement executed between the parties in that case stipulated delivery of possession by September 30, 2009. Since the possession was not delivered by the stipulated date, the complainants approached this Commission by way of a complaint. The grounds on which the aforesaid complaint was resisted were summarized as under:

 “A preliminary objection has been taken that as per the terms and conditions of the agreement between the parties, in case of delay on the part of the opposite party in delivering possession, the complainants are entitled only to compensation @ 5 per square feet per month of the super area, for the period the possession is delayed and in case the developers are not in a position to offer the property, they may offer an alternative property or refund the amount received from the flat buyers with interest @ 10% per annum. On merits, the opposite parties have admitted the agreement with the complainants as well as the receipt of the amount alleged by them.  The delay in offering possession is sought to be justified on the following grounds:-

       “Common Wealth Games during April, 2010 to March, 2011 – the Common Wealth Games were organized in the NCR region which resulted into an extreme shortage of labours in the region as most of the labour force was employed and / or was engaged by the Government to expedite the completion of the pending projects required for the Common Wealth Games.

       Active implementation of social schemes like NREGA and JNNURM – In addition to the above due to active implementation of alluring and promising schemes floated by the Central and State Government, there was a sudden shortage of labour / workforce especially in the real estate market.  The workforce / labour forces were tempted to return to their respective states due to the guaranteed employment.

       Order dated 16.7.2012 passed by the Hon’ble High Court of Punjab & Haryana (hereinafter referred to as the “Order” – The above mentioned Order strictly restrained the usage of ground water and directed to use only treated water from available Sewerage Treatment Plants (hereinafter referred to as “STP”).  As the availability of STP, basic infrastructure and availability of water from STP, was very limited in comparison to the requirement of water in the ongoing constructions activities in NCR region.

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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION  NEW DELHI          
CONSUMER CASE NO. 487 OF 2014           1.

Manoj Kumar Jha & Anr. vs M/S. Unitech Ltd

 HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)

 CC No. 487/20

(1)     The complainants, who are husband and wife, booked an apartment measuring 1560 sq. feet of super area in a project namely Vistas which the opposite party is developing in Sector-70 of Gurgaon. The parties entered into a Buyers Agreement dated 15.03.2010 in this regard. As per clause 4 (a) of the said agreement, the opposite party was required to deliver possession of the flat to the complainants within 36 months from the date of the agreement i.e. by 15.03.2013. The complainants made payment of Rs. 47,62,416/- to the opposite party as against the agreed total consideration of Rs. 52,09,200/-, constituting 91% of the total sale consideration. The grievance of the complainants is that despite they having made 91% of the payment, the opposite party has not even offered possession of the flat to them. The complainants therefore, are before this Commission seeking possession of the flat booked by them or a flat of identical size in a similar locality or a sum of Rs. 1,71,60,000, that being the current market value of such flats. They have also claimed a sum of Rs. 24,157/- per month towards rental expenses, Rs. 15,87,274/- as interest calculated @ 18% per annum from the committed date of possession till October' 2014 and Rs. 1,32,600/- being the compensation as stated in the Buyers Agreement

 CC No. 13/2015

(2)     The complainant in C.C. No.13 of 2015 is a subsequent purchaser, who purchased Flat No.1001 measuring about 1629 sq. ft. of super area in the project 'FRESCO' which the opposite party is developing in Sector 50 of Gurgaon, from the original allottee Ms.Kaushal and Mr.Mukesh Kumar by way of an agreement dated 24.01.2013.  The booking by the original allottee was made on 01.11.2006 and they entered into an agreement dated 12.12.2006 with the opposite party.  Under the Buyers Agreement, the opposite party was required to deliver the possession of the apartment to the purchasers by March 2009. The transfer in favour of the complainants was allowed by the opposite party vide its letter dated 24.01.2013. The grievance of the complainant is that the possession of the flat has not been offered to him despite more than 9 years have expired from the date of execution of the Buyers Agreement and about 3 years have expired from the date he purchased the apartment from the original allottee. The aforesaid complainant is therefore, before this Commission seeking possession of the flat booked by him alongwith compensation etc.

(3)     The complainants in CC/14/2015 booked an apartment measuring 1815 sq. ft. of super area in the project 'FRESCO' which the opposite party is developing in Sector 50 of Gurgaon and parties entered into a buyers agreement dated 16.06.2008 whereby the opposite party was required to deliver possession of the apartment to the complainants within 27 months i.e. by 15.09.2010.  The grievance of the complainants is that the possession has not been offered to them though more than 5 years have already expired from the date stipulated for delivering possession of the apartment to them.  Being fed up with such abnormal delay in offering possession of the apartment to them, the complainants are seeking refund of the amount which they have paid to the opposite party along with compensation in the form of interest @ 18% p.a.  Though they have also sought damages for the loss of rental income and payment of contractual compensation besides a lump sum compensation for physical and mental torture, the prayer is now confined to a consolidated compensation in the form of simple interest from the computed date of possession till the date the amount to the complainants is refunded 

(4)     The complainants in CC/15/2015 are the subsequent purchasers who purchased the apartment no.0103 having super area of 1662 sq. ft. in the project 'FRESCO' in Sector 50 of Gurgaon from the original allottee of the said apartment on 15.12.2011. The allotment to the original allottee was made vide Buyers Agreement dated 2.8.2011 and as per clause 4 (a) of the said agreement, the possession was to be delivered within 9 months from the date of the agreement i.e. by 2.5.2012. However, the possession is yet to be offered to the complainants. The aforesaid complainant is therefore, before this Commission seeking possession of the flat booked by him alongwith compensation etc.

(5)     The complainant in CC No. 16/2015 alongwith his wife booked a residential apartment bearing no. 0302 measuring 1560 sq. feet of super area in the same complex i.e. Vistas in Sector-70 of Gurgaon for a total consideration of Rs. 5349504/-. Later, the name of the wife of the complainant was deleted from the said agreement. The complainant made payment of Rs. 4938886/- to the opposite party. As per the Buyers Agreement executed between the parties on 12.03.2010, the possession was to be delivered within 36 months from the date of the agreement i.e. by 12.03.2013. The possession however, has not been delivered. The complainant therefore, is before this Commission seeking possession of the flat, with compensation etc.

(6)     The complaints have been resisted by the opposite party on several grounds which were also taken in a number of consumer complaints filed against the said party before this Commission and were rejected. It is however, not in dispute that the opposite party is not in a position to hand over possession of the flats to the complainants and though construction of the super structure is stated to be complete, even occupancy certificate has not been applied.

(7)     The learned counsel for the complainants has pointed out that a number of complaints filed by the allottees of the project Vistas in Sector-70 of Gurgaon were allowed by this Commission vide order dated 08.06.2015. In CC No. 427/2014, Satish Kumar Pandey & Anr. Vs. M/s. Unitech Ltd. and connected matters. The order passed in the Satish Kumar Pandey & Anr. (supra) to the extent it is relevant, reads as under:

"Neither any new legislation was enacted nor an existing rule, regulation or order was amended stopping suspending or delaying the construction of the complex in which apartments were agreed to be sold to the complainants.  There is no allegation of any lock-out or strike by the labour at the site of the project.  There is no allegation of any slow-down having been resorted to by the labourers of the opposite party or the contractors engaged by it at the site of the project.  There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God which could have delayed the completion of the project within the time stipulated in the Buyers Agreement.  It was contended by the counsel for the OP that the expression 'slow down' would include economic slow-down or recession in the Real Estate sector.  I, however, find no merit in this contention.  The word 'slow down' having been used alongwith the words lock-out and strike, I has to be read ejusdem generis with the words lock-out and strike and therefore, can mean only a slow down if resorted by the labourers engaged in construction of the project.

As regards, alleged shortage of labour, I find that no material has been placed on record by the OP that despite trying, it could not be get labourers to complete the construction of the project within the time stipulated in the Buyers Agreement.  It was submitted by the learned counsel for the complainants that ordinarily big builders such as the OP in these cases, are contracting/sub-contracting the construction work to the contractors engaged by them, instead of employing their own labourers on a regular basis, the purpose being to ensure that they are not saddled with the wage bill of those regular labourers, in case the opposite party does not have adequate work for them.  There is no evidence of the OP having been invited tenders for appointment of contractors / sub-contractors for executing the work at the site of those projects and no contractor/ sub-contractor having come forward to execute the project on the ground that adequate labour was not available in the market.  Therefore, it cannot be accepted that the opposite party could not have arranged adequate labour, either directly or through contractors/sub-contractors, for timely completion of the project.  As regards the alleged shortage of water, bricks and sand in the market, I find that there is no evidence filed by the OP, to prove that it was unable to procure water, sand and brick in adequate quantity.  This is also their case that the notification of the Government, being relied upon by the opposite party, is an old notification, which was in force even at the time the opposite party promised possession in 36 months. There is no evidence of the opposite party having invited tenders for supply of bricks and water and there being no response to such tenders.  In fact, if the work is to be executed through contractors/sub-contractors, the material such as bricks, sand and even water will be arranged by the contractor/sub-contractor and not by the opposite party.  As noted earlier, there is no evidence of the opposite party having invited tenders after awarding the work of project in question to the contractors/sub-contractors and there being no response to such tenders.  Therefore, I find no merit in the plea that the completion of the project was delayed due to non-availability of water, sand and bricks in adequate quantity.

It is an undisputed proposition of law that ordinarily the parties are bound by the terms and conditions of the contract voluntarily agreed by them and it is not for a Consumer Forum or even a Court to revise the said terms.

However, a term of a contract, in my view will not be final and binding if it is shown that the consent to the said term was not really voluntary but was given under a sort of compulsion on account of the person giving consent being left with no other choice or if the said term amounts to an unfair trade practice.  It was submitted by the learned counsel for the complainants that the term providing for payment of a nominal compensation such as Rs.5/- per square foot of the super area having become the order of the day in the contracts designed by big builders, a person seeking to buy an apartment is left with no option but to sign on the dotted lines since the rejection of such term by him would mean cancellation of the allotment.  He further submitted that a person seeking to acquire a built up flat instead of purchasing a plot and then raising construction on it, therefore, is not in a position to protest resist the inclusion of such a term in the Buyer's Agreement, and has to rely upon the reputation of the builder, particularly if he is a big builder such as Unitech Ltd.  He also submitted that the format of the Buyer's Agreement is never shown to the purchasers at the time of booking the apartment and if he refuses to sign the Buyer's Agreement on the format provided by the builder, not only will he lose the booking, even the booking amount/earnest money paid by him will be forfeited by the builder.  I find merit in the above referred submissions of the learned counsel.  A person who, for one reason or the other, either cannot or does not want to buy a plot and raise construction of his own, has to necessarily go in for purchase of the built up flat.  It is only natural and logical for him to look for an apartment in a project being developed by a big builder such as the opposite party in these complaints.  Since the contracts of all the big builders contain a term for payment of a specified sum as compensation in the event of default on the part of the builder in handing over possession of the flat to the buyer and the flat compensation offered by all big builders is almost a nominal compensation being less than 25% of the estimated cost of construction per month, the flat buyer is left with no option but to sign the Buyer's Agreement in the format provided by the builder. No sensible person will volunteer to accept compensation constituting about 2-3% of his investment in case of delay on the part of the contractor, when he is made to pay 18% compound interest if there is delay on his part in making payment.

It can hardly be disputed that a term of this nature is wholly one sided, unfair and unreasonable.  The builder charges compound interest @ 18% per annum in the event of the delay on the part of the buyer in making payment to him but seeks to pay less than 3% per annum of the capital investment, in case he does not honour his part of the contract by defaulting in giving timely possession of the flat to the buyer.  Such a term in the Buyer's Agreement also encourages the builder to divert the funds collected by him for one project, to another project being undertaken by him.  He thus, is able to finance a new project at the cost of the buyers of the existing project and that too at a very low cost of finance.  If the builder is to take loan from Banks or Financial Institutions, it will have to pay the interest which the Banks and Financial Institutions charge on term loan or cash credit facilities etc.  The interest being charged by the Banks and Financial Institutions for financing projects of the builders is many times more than the nominal compensation which the builder would pay to the flat buyers in the form of flat compensation.  In fact, the opposite party has not even claimed that the entire amount recovered by it from the flat buyers was spent on this very project.  This gives credence to the allegation of the complainants that their money has been used elsewhere.   Such a practice, in my view, constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder.  Though, such a practice does not specifically fall under any of the Clauses of Section 2(r) (1) of the Act that would be immaterial considering that the unfair trades, methods and practices enumerated in Section 2(r) (1) of the Act are inclusive and not exhaustive, as would be evident from the use of word "including" before the words "any of the following practices

(8)     In Suman Nandi & Anr. Vs. Unitech Limited & Anr., CC No.277/2013 decided on 17.12.2015, a Co-ordinate Bench of this Commission rejected the identical pleas taken by the opposite parties-Unitech and Pioneer Urban Land & Infrastructure Ltd.  The aforesaid judgment to the extent it is relevant reads as under

"8.       On careful perusal of the evidence, we find that opposite parties have not led any evidence to show any new legislation, regulation or order suspending, stopping or delaying the construction of complex in which the subject apartments were agreed to be sold to the complainants.  Neither there is an allegation of strike, slow-down, civil commotion, war, enemy action, terrorist action etc. or any other act of god which might have caused delay in completion of project within time stipulated in the Buyer's Agreement nor evidence in this regard has been adduced.   Learned counsel for the opposite parties have tried to get out of the situation by arguing that expression slow-down in clause 9.b. of the Buyer's Agreement would also include economic slowdown or recession in real estate sector.  We do not find merit in this contention. The economic constraints ordinarily cannot be taken as a defence for non- compliance of the contract.  The term 'slow - down' in clause 9.b. has been used alongwith word 'strike' and it has to be read ejusdem generis with the aforesaid words and can only mean a slow down resorted by the labourers engaged in the construction of the project in support of their demands. 

9.      As regards shortage of labour, but for the bald plea of the opposite parties in their written statement and the affidavits which are more or less reproduction of the written statement, there is no material or convincing evidence on record that despite of making efforts, the opposite parties could not get labours to complete the construction of project within the stipulated time.  Therefore, it cannot be accepted that opposite party because of market conditions could not manage to arrange adequate labour for timely completion of project.  As regards the alleged shortage of water, bricks and sand in the market, no cogent evidence has been produced by the opposite party to establish that it was unable to procure water, sand and bricks in adequate quantity.  No evidence has been adduced to establish that from the date of signing of Buyer's Agreement from 2006-2010, there was shortage of those materials in the market.  The opposite parties have also taken a plea that there was a notification of government imposing restriction on the production of bricks by brick klins.  The aforesaid argument is without any force because the notification relied upon by the opposite party was in force even at the time the opposite party promised possession of the apartments within 30 -36 months.  The opposite parties having entered into an agreement knowing the aforesaid constraints because of government notification now cannot get rid of its obligation to justify the delay in construction.  As regards the scarcity of water, plea of the opposite party is without any basis because the order of High Court stopping use of ground water for construction activity came much later.  If the opposite parties actually intended to complete the construction within the stipulated time, they would have completed the super structure which does not take much time within initial 24 months of the date of Buyer's Agreement.

10.    As regards the plea of shortage of labour etc. due to common wealth game is concerned, that plea is also not acceptable for the reason that Buyer's Agreement are of the year 2006 to 2010 and if the opposite parties intended to comply with the terms of agreement, they would have raised substantial construction before common wealth games. Had there been truth in the defence taken by the opposite party, the opposite party after the completion of construction activities pertaining to commonwealth games would have completed the project within the period of five years since the common wealth  games were held.  Till  date, the possession of the apartments have not been handed over to the complainants which clearly indicate the deliberate delay and negligence on the part of the opposite party and opposite party cannot be permitted to hide behind a bogus plea of force majeure or exceptions provided in clause 9.b of the Buyer's Agreement

18.    On reading of clause 2 (r) (i) (ii) & (vi), it is clear that if a service provider in order to increase his business makes a false representation regarding the standard and quality of the proposed service or its usefulness, it would amount to the unfair trade practice. On careful reading of the Buyer's Agreement it is clear that in the said agreement, the opposite party service provider has extended a clear promise/representation to the complainants that in the event of their paying consideration amount, they would be given possession of the booked apartments complete in all respect within 30-36 months or reasonable period thereof. However, in the above-noted case, the stipulated period has expired way back and even almost five years have gone by but the possession of the apartments have not been delivered. There is no evidence from the side of the opposite party as to how and where the money paid by the complainants and the other buyers of apartments in the project has been utilised.  From this can be safely inferred that the opposite party has diverted the funds and instead of utilising the funds paid by the complainants/buyers for completing the project within the promised period. Therefore, in our considered view, this is a case of soliciting business by the opposite party service provider by making false representation. Therefore, in our view, this is a clear case of unfair trade practice. The opposite party, thus, cannot take shelter of clause 4.a of the contract to avoid its liability to pay reasonable compensation for the delay caused due to its intentional act in not making sincere efforts to complete the construction within a reasonable period.

19.    In view of the above, since the opposite party has utilised the money paid by the complainants against consideration amount, the complainants are entitled to interest on the payment made by them for the period of delay as compensation instead of meagre compensation computed on the basis of clause 4.c. of the Buyer's Agreement, which is highly unfair.  Looking into overall facts and circumstances of the case, we are of the opinion that 12% interest p.a. from the date of default in delivery of the subject apartments would meet the interest of justice.

(9)     In a recent decision in CC No. 368/2014, Shweta Kapoor & Anr. Vs. M/s. Unitech Ltd. & Anr., decided on 14.01.2016, the complainants had agreed to purchase a residential flat from the opposite party Unitech Ltd. in a project which it was developing in Sector-50 of Gurgaon and had made payment of Rs. 95.5% of the total sale consideration. The Buyers Agreement executed between the parties in that case stipulated delivery of possession by September 30, 2009. Since the possession was not delivered by the stipulated date, the complainants approached this Commission by way of a complaint. The grounds on which the aforesaid complaint was resisted were summarized as 

 "A preliminary objection has been taken that as per the terms and conditions of the agreement between the parties, in case of delay on the part of the opposite party in delivering possession, the complainants are entitled only to compensation @ 5 per square feet per month of the super area, for the period the possession is delayed and in case the developers are not in a position to offer the property, they may offer an alternative property or refund the amount received from the flat buyers with interest @ 10% per annum. On merits, the opposite parties have admitted the agreement with the complainants as well as the receipt of the amount alleged by them.  The delay in offering possession is sought to be justified on the following grounds:-

       "Common Wealth Games during April, 2010 to March, 2011 - the Common Wealth Games were organized in the NCR region which resulted into an extreme shortage of labours in the region as most of the labour force was employed and / or was engaged by the Government to expedite the completion of the pending projects required for the Common Wealth Games.

       Active implementation of social schemes like NREGA and JNNURM - In addition to the above due to active implementation of alluring and promising schemes floated by the Central and State Government, there was a sudden shortage of labour / workforce especially in the real estate market.  The workforce / labour forces were tempted to return to their respective states due to the guaranteed employment.

       Order dated 16.7.2012 passed by the Hon'ble High Court of Punjab & Haryana (hereinafter referred to as the "Order" - The above mentioned Order strictly restrained the usage of ground water and directed to use only treated water from available Sewerage Treatment Plants (hereinafter referred to as "STP").  As the availability of STP, basic infrastructure and availability of water from STP, was very limited in comparison to the requirement of water in the ongoing constructions activities in NCR region

This scarcity of an essential commodity for construction purposes made it difficult for the Opposite Parties to cope up with the pre-decided schedules as the availability of treated water became very limited and against the total requirement of water.  It is to be highlighted here that only approx. 10-15% of required quantity was available at construction sites to continue with the planned construction activities.

In addition to the above, the Opposite Parties were later completely banned to use underground water for construction purposes and were vehemently directed to use recycled water only.

        Notification dated 14.9.1999 published by Ministry of Environment and Forest -The Notification dated 14.09.1999 barred the excavation of top soil for the manufacture of bricks and further directed that no manufacturing of clay bricks or tiles or blocks be done within a radius of 50 (fifty) kilometres from coal and lignite based thermal power plants without mixing atleast 25% of ash with soil.  As a consequence of this Notification dated 14.09.1999 various brick kiln were shut creating shortage of essential commodity bricks for construction purposes.  

       Further, another raw material i.e. the sand which is used as mixture along with cement was also not available in the vicinity of the Complex due to restrictions from Mining Department imposed in the entire Aravali region and the same had to be procured from neighbouring State of Rajasthan. 

        Later in a completely unforeseeable ruling by the Hon'ble Supreme Court of India dated 08.05.2009 the Hon'ble Court suspended all the mining operations in the Aravalli Hill range falling in State of Haryana within the area of approx.. 448 sq. kms. In the district of Faridabad and Gurgaon including Mewat which directly affected the construction schedules and activities of the Respondents herein.

Notification dated 14.09.2006 published by the office of Director, Town and Country Planning, Haryana – This Notification dated 14.09.2006 imposed certain restrictions and prohibitions on new projects or activities, or on the expansion or modernization of existing projects or activities based on their potential environmental impact being undertaken in any part of India unless prior environmental clearances are obtained.  Therefore, due to the said Notification dated 14.09.2006, the procedure of obtaining approvals and sanctions by the opposite parties led to the delay in the present construction schedule.

Recession in the economy – That since the real estate industry is a cyclical industry that is affected by both local and national economic conditions.  While macroeconomic conditions affect the overall state of the real estate industry, local supply and demand conditions are by far more important factors affecting the real estate markets as a result of which the availability of essential resources namely the labour and various raw materials became scarce.”

(10)   Rejecting all the pleas taken by the opposite party and allowing the complaint, this Commission inter-alia observed and held as under:

4.      We find that the pleas taken in the reply filed by the opposite party are same which this Commission has already rejected in a number of complaints filed against the said opposite party.  In Swarn Talwar & Ors. vs. Unitech Ltd., C.C. No.347 of 2014 decided on 14.08.2015 wherein the opposite party had failed to construct flats in a project known as Unitech Habitat in Greater Noida, this Commission while directing the opposite party to refund of the amount deposited by the flat buyers along with interest on that amount @ 18% per annum inter-alia held as under:-

“8.      As regards the plea that in terms of Clause (c) of the allotment letter the opposite party is required to pay only the holding charges calculated at the rate of Rs.5/- per sq.ft. per month of the super area for the period the possession is delayed, such a contention was expressly rejected by us in Puneet Malhotra (supra) holding that such clause applies only in a case where construction of the flat is delayed but despite delay the buyer accepts the possession of the flat from the seller and consequently the accounts have to be settled between the parties. We observed in this regard that the buyer would have to pay the agreed holding charges to the seller and the seller to pay the agreed compensation on account of delaying the construction of the flat. The said clause, however, does not apply to a case where the buyer on account of delay on the part of the seller in constructing the flat is left with no option but to seek refund of the amount which he had paid to the seller. We further held that such a clause where the seller in case of default on the part of the buyer seeks to recover interest from him at the rate of 24% per annum will amount to an unfair trade practice since it gives an unfair advantage to the seller over the buyer. We also noted in this regard that enumeration of the unfair trade practices in Section 2(r) of the Act is inclusive and not exhaustive.

          This plea was also negatived by us in a batch of complaints CC No.427 of 2014, Satish Kumar Pandey & Anr. Vs. Unitech Ltd. and connected matter, decided on 08-06-2015. All those complaints were filed against none other than the opposite party in these matters, namely, Unitech Ltd.

9.      Coming to the pleas that there was recession in the economy and a disruption due to agitation by farmers and acute shortage of labour, etc., the following view taken by us In Satish Kumar Pandey (Supra) is relevant.

         It would also be pertinent to note here that as pointed out by the complainants the agitation of the farmers was on account of acquisition of land in Noida Extension and not on account of acquisition of land on which the project in which the flats were to be constructed for the complainants. As regards the alleged delay in obtaining environmental clearances there is no material on record to show when the opposite party applied for such clearances, where they submitted all the requisite documents etc. while applying for such clearances and how much was the time taken by the concerned authorities in granting the said clearances. In the absence of such particulars, it would be difficult for us to accept that development of the project was delayed on account of any notification imposing restrictions on new projects. In any case, the opposite party has failed to produce before us any notification imposing restriction or prohibition on development of the project in which the flats were to be constructed for the complainants.

(11)   This Commission further observed and held as under in Shweta Kapoor & Anr. (Supra):

6.      In the case before us, there is no evidence of the opposite parties having been prevented from completing the construction due to an Act of God or reasons beyond their control. There is no evidence of any Tribunal or Authority having restrained them going ahead with construction of this particular project, which could not be completed even after more than 6 years after the date stipulated for this purpose in buyers agreement.  The averments made in the reply are vague and general in nature, without even specifying when, by which order and for how much period a Tribunal or Authority had stopped the opposite parties from completing the construction.  The opposite parties ought to have obtained all the requisite approvals and clearances before coming in the market for accepting booking of the flats.  If some building material or water was not available in Gurgaon (though there is no evidence of the opposite parties having been unable to get building material and water in Gurgaon) it was for them to arrange building material and water from alternative sources, wherever it could be available.  The shortage of labour, building material or the water required for construction cannot be said to be Acts of God or reasons beyond the control of the opposite parties.  This is not the case of the opposite parties that no construction came up in Gurgaon in last 7-8 years. If others could construct buildings during this period, the opposite parties also could have done so, if they so intended.  This is not the case of the opposite parties that the entire money collected by them from the flats buyers in this project was used only for this project.  Hence, there seems to be truth in the contention of the complainants that the opposite parties have diverted the money collected from them to other projects or for other purpose, thereby financing their other business activities at the cost of the flat buyers in this project. In these circumstances, the aforesaid pleas are accordingly rejected.  

(12)  In Swarn Talwar & Ors. vs. Unitech Ltd., C.C. No.347 of 2014 and connected matters decided on 14.08.2015, the complainants had booked residential apartment in project known as Unitech Habitat, which the opposite party was to develop on plot no.9, Sector PI-II (Alistonia Estate) in Greater Noida. The opposite party however failed to deliver possession of the flats to the complainants within the time agreed between the parties and consequently the complainant sought refund along with interest @ 18% p.a. besides damages and cost of litigation.

          The complaints were resisted on the grounds identical to those on which the present complaint has been opposed.  Rejecting all the grounds taken by the opposite party and also inter alia relying upon the decision of the Hon’ble Supreme Court in K.A. Nagmani Vs. Housing Commissioner, Karnataka Housing Board, C.A. No.6730-6731, decided on 19.09.2012, this Commission directed the opposite party to refund the amount paid to it by the complainants, along with compensation in the form of simple interest on that amount @ 18% per annum from the date of deposit till the date the said amount was paid to the flat buyers.  The payment was directed to make within six weeks.

      Being aggrieved from the order passed by this Commission, the opposite party preferred an appeal before the Hon’ble Supreme Court being Civil Appeal (Diary No. 35562 of 2015). Vide signed order dated 11.12.2015, the Hon’ble Supreme Court dismissed the said appeal.  The order passed by the Hon’ble Supreme Court reads as under:-

“We have heard learned counsel for the appellant and perused the record.  We do not see any cogent reason to entertain the appeal. The judgment does not warrant any interference.

    The Civil Appeal is dismissed.”

(13)   The learned counsel for the opposite party submits that since the apartment in question was purchased for less than Rs.1 Crore, this Commission lacks pecuniary jurisdiction to entertain this complaint and the complainants should be relegated to the concerned State Commission for the redressal of their grievance.  We however find no merit in this contention.  This issue was raised by the opposite party in Swarn Talwar (Supra) and was rejected.  The aforesaid decision to the extent relevant to this plea reads as under:-

“5.      The first question which arises for our consideration in these cases is as to whether this Commission possesses the requisite pecuniary jurisdiction to entertain these complaints. Section 11(1) of the Consumer Protection Act read with Section 21 of the Consumer Protection Act to the extent it is relevant provides that this Commission shall have jurisdiction to entertain complaints where the value of the goods or services and compensation if any claimed exceeds Rs.1,00,00,000/-. The contention of the learned counsel for the opposite party is that interest claimed by the complainants cannot be termed as compensation and if the interest component is excluded, the pecuniary value of the complaint does not exceed Rs.1,00,00,000/- except in one case. The learned counsel for the complainants on the other hand contended that the interest which they have claimed along with refund of the principal sum even if not so described specifically, is by way of compensation only, since the opposite party has been deficient in rendering services to the complainants by not delivering possession of the flats on or before the time agreed in this regard.

6.      In our view, the interest claimed by the flat buyers in such a case does not represent only the interest on the capital borrowed or contributed by them but also includes compensation on account of appreciation in the land value and increase in the cost of construction in the meanwhile. As noted by us in CC No.232 of 2014, Puneet Malhotra Vs. Parsvnath Developers Ltd. decided on 29-01-2015, there has been steep appreciation in the market value of the land and cost of construction of the residential flats in Greater Noida in last about 7-10 years and consequently the complainants cannot hope to get a comparable flat at the same price which the opposite party had agreed to charge from them. In fact it would be difficult to get a similar accommodation, even at the agreed price plus simple interest thereon at the rate of 18% per annum. Therefore, the payment of interest to the flat buyers in such a case is not only on account of loss of income by way of interest but also on account of loss of the opportunity which the complainants had to acquire a residential flat at a particular price.

7.      In Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65, the Hon’ble Supreme Court inter alia observed and held as under:

        “However, the power to and duty to award compensation does not mean that irrespective of facts of the case compensation can be awarded in all matters at a uniform rate of 18% per annum. As seen above what is being awarded is compensation i.e. a recompense for the loss or injury. It therefore necessarily has to be based on a finding of loss or injury and has to correlate with the amount of loss or injury. Thus the Forum or the Commission must determine that there has been deficiency in service and/or misfeasance in public office which has resulted in loss or injury. No hard and fast rule can be laid down, however a few examples would be where an allotment is made, price is received/paid but possession is not given within the period set out in the brochure…

…Along with recompensing the loss the Commission/Forum may also compensate for harassment/injury both mental and physical. Similarly, compensation can be given if after allotment is made there has been cancellation of scheme without any justifiable cause.

That compensation cannot be uniform and can best of illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply returned then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that flat/plot. Therefore the compensation in such cases would necessarily have to be higher.

       It would, thus, be seen that the Hon’ble Supreme Court recognized that the interest to the flat buyers in such cases is paid by way of compensation. Therefore, there is no reason why the interest claimed by the complainants or at least part of it should not be taken into consideration for the purpose of deciding the pecuniary jurisdiction of this Commission. If this is done, the aggregate amount claimed in each of the complaints exceeds Rs.1,00,00,000/- and, therefore, this Commission does possess the requisite pecuniary jurisdiction.

           In the cases where the complainant does not want refund and is seeking possession, alongwith compensation for the delayed possession, this Commission would have jurisdiction to entertain the complaint, if the aggregate of the value of the flat, on the date of filing of the complaint and the compensation claimed for the delay in delivering possession, exceeds Rs. 1 Crore. In terms of Section 21(a) of the Consumer Protection Act, this Commission can entertain complaints where the value of the goods or services and compensation exceeds Rs. 1 Crore. Since the buyer is seeking possession of the flat booked by him, the value of the service, in such a case in our opinion, in terms of Section 21(a) of the Consumer Protection Act means the value of the flat as on the date of filing of the complaint and not the value on the date the flats were booked.

(14)     In Satish Kumar Pandey (Supra) some of the complainants before this Commission were subsequent purchasers who had purchased the apartment from the original allottee of the opposite party.  The possession in those cases was offered to be delivered within three years. It was directed by this Commission that those who had purchased the apartment after more than one year from the initial allotment should be paid compensation in the form of simple interest @ 12% per annum w.e.f. three years from the date of repurchase till the date the possession is delivered to them, no compensation shall be payable to them from first three years from the initial allotment and for the period between three years from the date of initial agreement/allotment and three years from the date of repurchase by them compensation shall be paid to them @ Rs.5/- per sq. ft. of the super area in terms of the clause 4 (c) of the buyers agreement.  Lesser compensation to the subsequent purchaser was awarded considering the decision of the Hon’ble Supreme Court in Haryana Urban Development Authority vs. Raje Ram, AIR 2009 SC 2030.

(15)   The persons who had purchased flats within one year from the date of the agreement with/allotment to the original allottee were treated by this Commission at par with the original allottee in Satish Kumar Pandey (Supra) and therefore such complainants would be entitled to same compensation for the period the possession is delayed, as has been awarded to the original allottees.

(16)     During the pendency of this complaint, the opposite party sent a letter to the allottees in ‘FRESCO’ project conveying a revised completion schedule and offer of possession of apartment for various towers.  A higher penalty clause was also proposed by the opposite party in the said letter dated 26.05.2015.  As per the said letter dated 26.05.2015, possession in Tower-4 whereby the apartment purchased by the complainant in CC No. 13/2015 is situated, was to be offered by 31.10.2015 and in case of delay penalty @ Rs.17 per sq. ft. per month w.e.f. 1.11.2015 till the date of actual offer of possession.  Admittedly, the possession has not been offered by 31.10.2015.

(17)   In view of the forgoing discussion, the complaints are disposed of with the following directions:

      (a) In CC No. 14/2015, the opposite parties are directed to refund the amount paid to them by the complainants alongwith compensation in form of simple interest @ 18% per annum, calculated from the date of each payment till the date on which the said amount is refunded to them.

      (b) The opposite parties shall pay a sum of Rs. 5,000/- as the cost of litigation in each complaint.

      (c) The opposite parties shall deliver possession of the flats booked in the project Vistas in Sector-70 of Gurgaon, by the complainants in CC No. 487/2014 & 16/2015 to them within one year from today.

      (d) The opposite parties shall pay to the complainants in CC No. 14/2015, CC No. 15/2015 and CC No. 487/2014, compensation in the form of simple interest @ 12% per annum with effect from the expiry of the period stipulated in the Buyers Agreement/Allotment Letter for offering possession to them till the possession of the flats is actually delivered to them. The compensation in the form of interest till 29.02.2016 shall be paid by 31.03.2016. Thereafter, compensation in the form of interest in terms of this order shall be paid on monthly basis by the 10th of each succeeding month.

(e) In CC No. 13/2015, where the agreement with the original allottee is dated 12.12.2006 and the committed date of possession was March 2009, the opposite parties shall pay compensation by way of simple interest @ 12% per annum with effect from 27 months from the date of purchase of the flat by them till the possession is delivered to them. They will also be paid contractual compensation @ Rs. 5 per sq. feet of the super area of their flat for the period between 01.04.2009 and 27 months from the date of re-purchase of the flats by them.

(f) If the opposite parties fail to deliver possession of the flats to the complainants within the time stipulated in this order, they shall pay higher compensation to them in the form of interest @ 18% per annum for each day of delay beyond the time stipulated in this order for delivering possession of the flat to them. We however, hope that a situation attracting the aforesaid higher compensation will not arise.

  ………………….J V.K. JAIN PRESIDING MEMBER …………………. DR. B.C. GUPTA MEMBER

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whether family settlement deed is necessary to registered and pay stamp duty ?

“Whether the document Ex.P­6 required registration as by way of said document the interest in immovable property worth more than Rs.100/­ was transferred in favour of the plaintiff?”

In other words to put the binding effect and the essentials of a family settlement in a concretised form, the matter may be reduced into the form of the following propositions:

“(1) The family settlement must be a bona fide one so as to resolve family disputes and rival claims by a fair and equitable division or allotment of properties between the various members of the family;

(2) The said settlement must be voluntary and should not be induced by fraud, coercion or undue influence;

(3) The family arrangement may be even oral in which case no registration is necessary;

(4) It is well­settled that registration would be necessary only if the terms of the family arrangement are reduced into writing. Here also, a distinction should be made between a document containing the terms and recitals of a family arrangement made under the document and a mere memorandum prepared after the family arrangement had already been made either for the purpose of the record or for information of the court for making necessary mutation. In such a case the memorandum itself does not create or extinguish any rights in immovable properties and therefore does not fall within the mischief of Section 17(2) of the Registration Act and is, therefore, not compulsorily registrable;

(5) The members who may be parties to the family arrangement must have some antecedent title, claim or interest even a possible claim in the property which is acknowledged by the parties to the settlement. Even if one of the parties to the settlement has no title but under the arrangement the other party relinquishes all its claims or titles in favour of such a person and acknowledges him to be the sole owner, then the antecedent title must be assumed and the family arrangement will be upheld and the courts will find no difficulty in giving assent to the same;

(6) Even if bona fide disputes, present or possible, which may not involve legal claims are settled by a bona fide family arrangement which is fair and equitable the family arrangement is final and binding on the parties to the settlement.” (emphasis supplied) Again, in paragraph 24, this Court restated that a family arrangement being binding on the parties, clearly operates as an estoppel, so as to preclude any of the parties who have taken advantage under the agreement from revoking or challenging the same. In paragraph 35, the Court noted as follows: ­ “35. … We have already pointed out that this Court has widened the concept of an antecedent title by holding that an antecedent title would be assumed in a person who may not have any title but who has been allotted a particular property by other party to the family arrangement by relinquishing his claim in favour of such a donee. In such a case the party in whose favour the relinquishment is made would be assumed to have an antecedent title. …..” And again, in paragraph 36, the Court noted as follows: ­ “36. … Yet having regard to the near relationship which the brother and the son­in­law bore to the widow the Privy Council held that the family settlement by which the properties were divided between these three parties was a valid one. In the instant case also putting the case of Respondents Nos. 4 and 5 at the highest, the position is that Lachman died leaving a grandson and two daughters. Assuming that the grandson had no legal title, so long as the daughters were there, still as the settlement was made to end the disputes and to benefit all the near relations of the family, it would be sustained as a valid and binding family settlement. …” While rejecting the argument regarding inapplicability of principle of estoppel, the Court observed as follows: ­ “38. … Assuming, however, that the said document was compulsorily registrable the courts have generally held that a family arrangement being binding on the parties to it would operate as an estoppel by preventing the parties after having taken advantage under the arrangement to resile from the same or try to revoke it. …..” (emphasis supplied) And in paragraph 42, the Court observed as follows: ­

In these circumstances there can be no doubt that even if the family settlement was not registered it would operate as a complete estoppel against Respondents Nos. 4 and 5. Respondent No. 1 as also the High Court, therefore, committed substantial error of law in not giving effect to the doctrine of estoppel as spelt out by this Court in so many cases. …” (emphasis supplied) The view so taken is backed by the consistent exposition in previous decisions8 referred to and duly analysed in the reported judgment. The question formulated by the High Court, in our opinion, stands answered in favour of the appellants (plaintiff), in 8 Lala Khunni Lal vs. Kunwar Gobind Krishna Narain, ILR 33 All 356 Mt. Hiran Bibi vs. Mst. Sohan Bibi, AIR 1914 PC 44 Sahu Madho Das vs. Pandit Mukand Ram, AIR 1955 SC 481 Ram Charan Das vs. Girjanandini Devi, AIR 1966 SC 323 Tek Bahadur Bhujil vs. Debi Singh Bhujil, AIR 1966 SC 292 Maturi Pullaiah vs. Maturi Narasimham, AIR 1966 SC 1836 Krishna Biharilal vs. Gulabchand, (1971) 1 SCC 837 S. Shanmugam Pillai vs. K. Shanmugam Pillai, (1973) 2 SCC 312 Ramgopal vs. Tulshi Ram, AIR 1928 All 641 Sitala Baksh Singh vs. Jang Bahadur Singh, AIR 1933 Oudh 347 Mst. Kalawati vs. Sri Krishna Prasad, AIR 1944 Oudh 49 Bakhtawar vs. Sunder Lal, AIR 1926 All 173 Awadh Narain Singh vs. Narain Mishra, AIR 1962 Pat 400 Ramgouda Annagouda vs. Bhausaheb, AIR 1927 PC 227 Brahmanath Singh vs. Chandrakali Kuer, AIR 1961 Pat 79 Mst. Bibi Aziman vs. Mst. Saleha, AIR 1963 Pat 62 Kanhai Lal vs. Brij Lal, AIR 1918 PC 70 Dhiyan Singh vs. Jugal Kishore, AIR 1952 SC 145 T.V.R. Subbu Chetty’s Family Charities vs. M. Gaghava Mudaliar, AIR 1961 SC Rachbha vs. Mt. Mendha, AIR 1947 All 177 Chief Controlling Revenue Authority vs. Smt. Satyawati Sood, AIR 1972 Delhi 171 (FB) Shyam Sunder vs. Siya Ram, AIR 1973 All 382 light of exposition of this Court in Kale (supra)., it was not required to be registered and in any case, keeping in mind the settled legal position, the contesting defendants were estopped from resiling from the stated arrangement in the subject memorandum, which had recorded the settlement terms arrived at in the past and even acted upon relating to all the existing or future disputes qua the subject property amongst the (signatories) family members despite absence of antecedent title to the concerned property.

As regards the decision in Bhoop Singh (supra) and Som Dev & Ors. vs. Rati Ram & Anr. 9, the same dealt with the question of necessity to register any decree or order of a Court 9 (2006) 10 SCC 788 governed by clause (vi) of Section 17(2) of the Registration Act, 190810. In the present case, however, clause (v) of sub­Section 2 of Section 17 of the 1908 Act is attracted. Section 17 as applicable when the cause of action arose (prior to amendment of 2001) reads thus: ­ “Part III OF REGISTRABLE DOCUMENTS

17. Documents of which registration is compulsory.­ (1) xxx xxx xxx (2) Nothing in clauses (b) and (c) of sub­section (1) applies to –

(i) xxx xxx xxx

(ii) xxx xxx xxx

(iii) xxx xxx xxx

(iv) xxx xxx xxx

(v) any document not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immovable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest; or …..”

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The relevant judgment : by Hon’ble Supreme court of India.

Ravinder Kaur Grewal & Ors.  Vs Manjit Kaur & Ors. CIVIL APPEAL NO. 7764 OF 2014