Archive

Uncategorized

“It cannot be laid down as a general proposition that whenever the decree is against a company, its Directors/shareholders would also be liable. To hold so would be contrary to the very concept of limited liability and obliterate the distinction between a partnership and a company. Though the courts have watered down the principle in Solomon (supra), to cover the cases of fraud, improper conduct etc, as laid down in Singer India Ltd. Vs. Chander Mohan Chadha (2004) 7 SCC 1 but a case therefor has to be made out. The decree holder in the present case has not made out any case whatsoever. As aforesaid not only were the Directors not parties to the arbitration proceedings but were not impleaded in the execution petition also. There are no averments whatsoever in the execution petition or even in the application under consideration of fraud or improper conduct or of incorporation of the company to evade obligations imposed by law and in which situations the Supreme Court in Singer India Ltd. (Supra) has held that the corporate veil can be disregarded. All that the decree holder has pleaded is that one of the Directors has paid part of the decretal amount. Such voluntary payment by one of the Directors cannot entitle the decree holder to execute the decree against the other Directors also. The only other averments are that the income generated from the company was the income of the Directors. However there are no specific pleadings of fraud and as required to be made under Order 6 Rule 4 of the CPC. It is significant that the three Directors are not stated to be related to each other but are only described as friends of each other. Such faith amongst the Directors is implicit for them to come together to incorporate a company. However, the said circumstance alone is not sufficient to make out a case for lifting of the corporate veil. It has been vaguely stated that the claims of the decree holder are pending since 1996 and the assets of the company have been done away with. There are no averments whatsoever as to what were the assets of the company and as to when they were transferred. In Saurabh Exports, on the pleadings and evidence recorded, the court had found that the company was only a front for the business of its Directors and it was on such evidence that the decree was passed not only against the company but against the Directors also. In the present case no efforts whatsoever have been made out by the decree holder to even plead that the assets of the Directors against whom the decree is sought to be executed were not in existence prior to the incorporation of the company or that the business through the company was only a front for the business of the said Directors.”

*IN THE HIGH COURT OF DELHI AT NEW DELHI

+                                 Ex. App. No.516/2009 in Ex.P. No.295/2003

%                                                  Date of decision: 9th February, 2010

V.K. UPPAL                                                                    ….. Decree Holder

Through: Mr. Rajat Aneja, Advocate.

Versus

M/S AKSHAY INTERNATIONAL PVT. LTD.                                        ….. Judgment Debtor

Through: Mr. Santosh Paul & Mr. Arun Francis, Advocates for JD

No.2&3.

CORAM :-

HON’BLE MR. JUSTICE RAJIV SAHAI ENDLAW

  1. Whether reporters of Local papers may

be allowed to see the judgment?                          Yes

  1. To be referred to the reporter or not? Yes
  2. Whether the judgment should be reported Yes

in the Digest?

 

RAJIV SAHAI ENDLAW, J.

  1. The decree holder has applied for execution of arbitration award under the Arbitration Act, 1996, stated to be having force of a decree. The decree holder in the execution petition stated that as per the arbitration award, a sum of Rs.8,54,250/- along with costs of Rs.75,000/- and interest at 18% p.a. had been awarded to it against the judgment debtor company. The arbitration proceedings as well as the execution petition was filed only against the judgment debtor company i.e. M/s Akshay International Pvt. Ltd.
  1. The judgment debtor company was sought to be served with the notice of execution through its Director Shri Prakash Baliga. On 19th May, 2005, the counsel for the judgment debtor company made a statement, recorded in the order of that the date that the judgment debtor company was in a bad shape and that Mr. Prakash Baliga was gathering resources and keen to settle the matter. Mr. Prakash Baliga was directed to remain present in the court on the next date of hearing. Mr. Prakash Baliga appeared before the court on 12th August, 2008 and again informed that the financial condition of the judgment debtor company was very poor and he will have to consult “the other partners”. However, this court finding that the execution had been pending since the year 2003 issued warrants of attachment of a bank account particulars whereof were given by the decree holder. However on the next date of hearing i.e. 28th August, 2008 the decree holder informed the court that “the judgment debtor No.3” was co-operating and had already paid Rs.50,000/- and two post dated cheques to the decree holder in part satisfaction of the decree and sought recalling of the earlier order attaching the savings bank account “of the judgment debtor No.3 Mr. Prakash Baliga” and this court ordered accordingly. It may be mentioned that the execution as aforesaid was filed only against the judgment debtor company and there is nothing in the file to show that any of the Directors of the judgment debtor company were at any time also impleaded as judgment debtors.
  1. This Court on 28th August, 2008 also directed the other two Directors of the judgment debtor company namely Mr. AJS Sidhu and Mr. S.S. Velkar to present themselves in the court. Subsequently, warrants of arrest of the said Mr. S.S. Velkar and Mr. AJS Sidhu were issued and they appeared before this Court on 1st July, 2009 and informed that the judgment debtor company has ceased operations and the only assets of the judgment debtor company are certain receivables from foreign parties and the judgment debtor company has no other means to satisfy the decree. They also contended that they were not personally liable. Per contra, the counsel for the decree holder contended on that date that the third Director Mr. Prakash Baliga has already paid Rs.6 lacs out of the decretal amount and the other two Directors should pay the balance decretal amount. This Court directed the balance sheet and statement of affairs of the company to be filed and the same were filed.
  1. However, the decree holder rather than responding thereto has filed this application pleading that the judgment debtor company is a closely held company of the three Directors aforesaid who were friends; that keeping in view the nature of constitution of the judgment debtor, it has become extremely imperative for the court to direct the lifting of the corporate veil to provide justice to the decree holder; that the court has already directed one of the Directors to pay part of the decretal amount to the decree holder and accordingly the other two Directors should also be directed to pay the decretal amount and upon their failing to do so the decree should be executed against their properties. No need was felt to call for a reply of the said application from the other two Directors against whom the application was directed and the counsel for the decree holder and the counsel for the other two Directors have been heard. It may be mentioned that there is no order of this Court directing Mr. Prakash Baliga, Director of Judgment Debtor company to pay any decretal debts of the company and the payment if any was a private arrangement between the Decree Holder and the said Director, who appears to have come under pressure owing to attachment of his personal bank account as aforesaid.
  1. The counsel for the decree holder has relied upon (i) Ashish Polyfibres (Bihar) Ltd. Vs. State Bank of India 2009 (107) DRJ 1 (DB); (ii) Jawahar Lal Nehru Hockey Tournament Vs. Radiant Sports Management 149(2008) DLT 749; (iii) M.R. Khanna Vs. Union of India 133 (2006) DLT 114; (iv) Iyer & Son Pvt. Ltd.Vs. LIC 2007 X AD (Delhi) 643 and Saurabh Exports Vs. Blaze Finlease & Credits Pvt. Ltd. 129 (2006) DLT 429.
  1. The admitted position is that the arbitration award having force of the decree is against the judgment debtor company only and not against its Directors. The question which arises is whether a money decree against a Private Limited Co. can be executed against its Directors. There is no provision therefor in the CPC. Order 21 Rule 50 does provide for execution of a money decree against a firm from the assets of the partners of the said firm mentioned in the said rule but there is no provision with respect to the Directors of a company. The executing court, as this Court is cannot go behind the decree and can execute the same as per its form only. The decree is against the company. This Court as the executing court cannot execute the decree against anyone other than the judgment debtor or against from the assets/properties of anyone other than the judgment debtor. The identity of a Director or a shareholder of a company is distinct from that of the company. That is the very genesis of a company or a corporate identity or a juristic person. The classic exposition of law in this regard is contained in Solomon Vs. Solomon & Co. Ltd. 1897 AC 22 where the House of Lords had held that in law a company is a person all together different from its shareholders and Directors and the shareholders and Directors of the company are not liable for the debts of the company except to the extent permissible by law.
  1. The counsel for the decree holder has sought to, by relying upon the judgments aforesaid make out a case for invoking the principle of lifting of the corporate veil. The question which arises is, in what circumstances and in which proceedings is the corporate veil to be lifted. Whether it can be lifted in execution proceedings also or it has to be lifted in the substantial proceedings, of orders/decrees wherein execution is sought. In the judgment of the single judge in Jawahar Lal Nehru Hockey Tournament (supra) there is an observation that there could be a case where the court even in an execution proceeding lifts the veil of a closely held company, particularly a private limited company and in order to satisfy a decree, proceeds against the personal assets of its Directors and shareholders. However, I may notice that the aforesaid judgment has been overruled by the Division Bench in EFA(OS) No.17/2008 decided on 7th November, 2008 and reported as MANU/DE/1756/2008. Though the Learned Single Judge had held no case of lifting of the corporate veil in execution to be made out in that case, the Division Bench found that the Director of the company had agreed to be personally liable to satisfy the decree and held him liable. However, the Division Bench refrained from commenting authoritatively on the aspect of lifting of the corporate veil in execution. Thus the said judgment cited by the counsel for the decree holder does not come to his rescue.
  1. I also do not find any of the other judgments relied upon by the decree holder to be relevant. In Ashish Polyfibres (Bihar) Ltd., in a suit by a bank for recovery of dues, decree had been passed not only against the company but also against its Directors. The said decree was under challenge before the Division Bench on the ground of the Directors being not liable. The Division Bench dismissed the appeal for the reason that in that case the money had been mistakenly credited by the bank in the account in the name of the company and it was found that the Directors of the company in spite of knowledge of such mistake misappropriated the amounts. It was in those circumstance that they were held liable and not merely for the reason of being the Directors. Moreover that was a substantive proceeding and not an execution proceeding. M.R. Khanna (supra) was a case of recovery of dues under the Employees’ State Insurance Act, 1948. The corporate veil was pierced in that case because the ESI’s contributions recovered from the salaries of the poor workers had not been deposited but had been misappropriated by the Directors for their own benefit. That was also not a case of execution of a decree but of steps taken under the Employees’ State Insurance Act, 1948. The observations relied upon in Iyer & Son Pvt. Ltd. (supra) were also made in the context of public dues. No public dues are involved in the present case; that was also not the case of a money decree. Similarly, Saurabh Exports (supra) was a suit for recovery of money against the company and its Directors and not a case of execution.
  1. From the aforesaid, it would be evident that the counsel for the decree holder has been unable to show a single precedent where the money decree against a company has been executed against the Directors or against the assets of the Directors. The provisions of law as aforesaid, also do not permit the same. The Transfer of Property Act in Section 53 thereof allows a creditor to have a transfer of property made with an intent to defeat the creditor set aside. However, the decree holder has not made out/pleaded any case of transfer also.
  1. It cannot be laid down as a general proposition that whenever the decree is against a company, its Directors/shareholders would also be liable. To hold so would be contrary to the very concept of limited liability and obliterate the distinction between a partnership and a company. Though the courts have watered down the principle in Solomon (supra), to cover the cases of fraud, improper conduct etc, as laid down in Singer India Ltd. Vs. Chander Mohan Chadha (2004) 7 SCC 1 but a case therefor has to be made out. The decree holder in the present case has not made out any case whatsoever. As aforesaid not only were the Directors not parties to the arbitration proceedings but were not impleaded in the execution petition also. There are no averments whatsoever in the execution petition or even in the application under consideration of fraud or improper conduct or of incorporation of the company to evade obligations imposed by law and in which situations the Supreme Court in Singer India Ltd. (Supra) has held that the corporate veil can be disregarded. All that the decree holder has pleaded is that one of the Directors has paid part of the decretal amount. Such voluntary payment by one of the Directors cannot entitle the decree holder to execute the decree against the other Directors also. The only other averments are that the income generated from the company was the income of the Directors. However there are no specific pleadings of fraud and as required to be made under Order 6 Rule 4 of the CPC. It is significant that the three Directors are not stated to be related to each other but are only described as friends of each other. Such faith amongst the Directors is implicit for them to come together to incorporate a company. However, the said circumstance alone is not sufficient to make out a case for lifting of the corporate veil. It has been vaguely stated that the claims of the decree holder are pending since 1996 and the assets of the company have been done away with. There are no averments whatsoever as to what were the assets of the company and as to when they were transferred. In Saurabh Exports, on the pleadings and evidence recorded, the court had found that the company was only a front for the business of its Directors and it was on such evidence that the decree was passed not only against the company but against the Directors also. In the present case no efforts whatsoever have been made out by the decree holder to even plead that the assets of the Directors against whom the decree is sought to be executed were not in existence prior to the incorporation of the company or that the business through the company was only a front for the business of the said Directors.

No case for attaching the properties of the Directors of the judgment debtor is, therefore, made out. There is not merit in the application, the same is dismissed.

RAJIV SAHAI ENDLAW (JUDGE)

In the case in hand, it cannot be said that the whole of the subject matter in both the proceedings is identical. While the relief sought in the first suit is for a decree of permanentinjunction, the second suit has a much wider amplitude for the reason that the plaintiff therein, Sh.H.S. Maini has not only sought a decree of declaration of title but also of partition of the suitproperty by metes and bounds. There is force in the contention of the counsel for Sh. H.S. Maini that the issues arising for a decision would be substantially common in both the suits and almost the same set of oral and documentary evidence would be needed to be adduced for the purpose of determining the issues of facts and law arising for a decision in both the suits. No doubt there will be duplication of recording of evidence if separate trials are held and a possibility of two courts giving conflicting judgments cannot be ruled out. Thus, even if Shri P.S. Maini is held entitled to grant of a decree of permanent injunction in the first suit, the second suit instituted by Shri H.S. Maini for declaration, partition and permanent injunction has to be put to trial as the title to and the nature of the suit property is an issue which shall have to be decided in the second suit, cause of action for institution of which arose in the year 2004, on the demise of the father of the parties.


 

Delhi High Court
Harjeet Singh Maini vs Paramjit Singh Maini on 31 March, 2008
Author: H Kohli
Bench: H Kohli

JUDGMENT Hima Kohli, J.

1. By this common order, the Court proposes to dispose of an application under Section 10 of the CPC, being I.A. No. 5370/2006 filed by the defendant in CS(OS) No. 664/2005, Shri Paramjit Singh Maini praying inter alia for stay of further proceedings in the suit till disposal of suit bearing No. 272/2002 entitled Ram Singh Maini (deceased) through LR v. Harjeet Singh Maini, pending before the Civil Judge, Delhi, and the transfer petition being Tr.P. (C) No. 12/2006 entitled Harjit Singh Maini v. Paramjit Singh Maini filed by the plaintiff in CS(OS) No. 664/2005, Shri Harjit Singh Maini, praying inter alia for transfer of Suit No. 272/2002 from the Court of Civil Judge, Delhi, to this Court.

2. A reference to the factual matrix of the case is necessary before proceeding to deal with the aforesaid application under Section 10 of the CPC and the Transfer Petition. In October, 2002, the father of the parties, Shri Ram Singh Maini filed a civil suit as the owner of the property bearing No.A-266, New Friends Colony, New Delhi, bearing Suit No. 272/2002 (hereinafter referred to as the first suit), praying inter alia for a decree of mandatory injunction against his elder son, Shri Harjit Singh Maini to remove all his belongings from the first floor of the property in question. The stand taken in the aforesaid suit was that Shri H.S.Maini was only a licensee in respect of the first floor of the suit property, which license was terminated by a legal notice dated 25.9.2001 and thus he was liable to remove himself from the suit property. A written statement was filed by Shri H.S. Maini in the aforementioned suit denying the right of his father, to institute the suit, whereunder, one of the pleas taken was that Shri H.S. Maini had become the owner of the first floor of the suit property by virtue of an oral settlement arrived at between the family members in the years 1983-84.

3. The following issues were framed in the first suit on 9.12.2002:

1. Whether the present suit is not maintainable in the present form? OPD

2. Whether the present suit is not properly valued for the purposes of court fees and jurisdiction? OPD

3. Whether the plaintiff is entitled to mandatory injunction, as claimed? OPP

4. Relief.

4. During the pendency of the aforesaid first suit, the father of the parties, Shri Ram Singh Maini, expired on 29.1.2004. His younger son, Shri Paramjit Singh Maini, filed an application under Order XXII Rule 3 of the CPC for impleadment in the said suit as a plaintiff, on the basis of his claim that his father had left behind a duly executed registered Will dated 7.9.2001 in his favor. The aforesaid application was allowed by the Civil Judge, vide order dated 19.3.2005 and Shri Paramjit Singh Maini was permitted to be substituted as a plaintiff in place of his deceased father.

5. Thereafter, Shri H.S. Maini filed an application under Order XIV Rule 2 of the CPC praying inter alia that an issue pertaining to the suit being actually in the nature of a suit for possession be framed and treated as a preliminary issue, along with issue No. 2 framed earlier. The aforesaid application was rejected, vide order dated 23.8.2005. Aggrieved by the said rejection order, Shri H.S. Maini filed CM(M) No. 1651/2006 in this Court, which was dismissed with costs of Rs. 7,500/-, vide order dated 17th October, 2006 with the observation that the petitioner therein had filed said proceedings with the mala fide intention of delaying the proceedings in the suit and not permitting the evidence to be recorded.

6. In the meantime, Shri H.S. Maini, instituted a suit in this Court on 7th May, 2005, against his younger brother, Shri P.S. Maini for declaration, injunction and partition in respect of the suit property No. 266, New Friends Colony, New Delhi, claiming that he was the absolute owner in possession of the first floor of the suit property, comprising of 1/3rd share therein, in terms of the oral partition/family settlement arrived at amongst the family members in the year 1983. The said suit was registered as CS(OS) No. 664/2005 (hereinafter referred to as the second suit). Summons were issued in the aforesaid suit on 13th May, 2005. The defendant, Shri P.S. Maini entered appearance and filed his written statement on 31st August, 2005. Pleadings have since been completed in the suit and admission/denial of documents has taken place. Issues are to be framed.

7. On 1.5.2006, Shri P.S. Maini, the younger brother, filed an application under Section 10 of the CPC in the second suit, being I.A. No. 5370/2006, praying inter alia for stay of further proceedings in the second suit till disposal of the first suit pending before the Civil Judge, Delhi. Notice was issued on the aforesaid application on 10th May, 2006. Vide order dated 26.9.2006, it was made clear that the first suit pending in the trial court shall proceed irrespective of the pendency of any petition in this Court. Thereafter, the suit was proceeded further and it is stated that the plaintiffs evidence has already been recorded and the suit is fixed for the evidence of Shri H.S. Maini.

8. On 19.9.2006, Shri H.S. Maini filed a transfer petition under Section 24 of the CPC, being Tr.P(C)No. 12/2006 praying inter alia for transfer of the first suit from the Court of the Civil Judge, Delhi to this Court and for both the suits to be tried and disposed of together.

9. Learned Senior Advocate appearing for Shri H.S. Maini submitted that the Transfer Petition was necessitated so as to prevent a probability of conflicting judgments being passed at different forums in respect of the same property and interse the same parties. It was submitted that the scope of the second suit was much wider as compared to that of the first suit and hence, it would be appropriate to call for the file of the first suit to this Court and try both the suits together. He further submitted that even if it is assumed that Shri P.S. Maini would ultimately succeed before the Trial Court in the first suit and would be held entitled to a decree against Shri H.S. Maini, then also, the latters claim for declaration and partition in respect of the suit property in the second suit would subsist, since his claim to 1/3rd share in the suit property, is based on his stand that the suit property was an ancestral one and an oral partition had been arrived at between the parties during the life time of their father and that the Will of the father relied on by the younger brother was forged so as to deprive him of his legal right in the first floor of the suit property. It was thus, contended that the transfer of the first suit to this Court and consolidation thereof with the second suit for the purposes of trial would set at rest all the controversies between the parties in respect of the suit property, once and for all.

10. Counsel for Shri H.S. Maini gave an assurance that it shall be his endeavor to expedite disposal of both the suits and to show his bonafides, immediately upon issues being framed in the second suit, Sh.H.S. Maini shall file a consolidated affidavit and shall submit himself to a time-bound schedule for trial of both the cases. He further submitted on behalf of Sh.H.S. Maini that no request shall be made for treating any issue as a preliminary issue so that the parties could address arguments on all the issues at one go.

11. On the other hand, counsel for Shri P.S. Maini strongly opposed the Transfer Petition on the ground that trial had already begun in the first suit and substantial evidence had been recorded, whereas the second suit was still at the stage of framing of issues. He thus submitted that allowing the Transfer Petition filed by the other side will result in unnecessarily delaying the disposal of the first suit. Much emphasis was laid on the dilatory tactics adopted by Shri H.S. Maini in the first suit. In this context, the counsel referred to the order dated 26.9.2006 passed by this Court in CS(OS) No. 664/2005, the second suit, wherein it was directed that the trial court will continue hearing of the first suit irrespective of the pendency of the Transfer Petition. Reference was also made to the order dated 17.10.2006 passed in CM (M) No. 1651/2006 filed by Shri H.S. Maini, assailing the order dated 23.8.2005 passed by the Civil Judge, Delhi on the application under Order XIV Rule 2 of the CPC, to state that the other side had been trying to stall the proceedings on one pretext or the other and that the Transfer Petition is yet another step in that direction. In support of his submissions, counsel for Shri P.S. Maini relied on the following judgments:

1. Rabindra N. Das v. Santosh Kumar Mitra and Ors. ;

2. S.C. Jain v. Bindeswari Devi 1997 (42) DRJ 239; and

3. Bhagwati Prasad Sharma v. Ram Swaroop Sharma 2002 (61) DRJ 603

12. It was further submitted on behalf of Shri P.S. Maini that the first suit pending before the Civil Judge, Delhi was instituted prior to the institution of the second suit and the question of entitlement of Shri H.S. Maini to a right in the first floor of the suit property could be validly and legally decided in the first suit as well. Counsel also referred to the order dated 19.3.2005 passed by the Civil Judge, Delhi on an application filed by Shri P.S. Maini under Order XXII Rule 3 of the CPC for his impleadment as a legal heir of late Shri Ram Singh Maini, wherein the Court in the operative para observed as below:

By applying the aforesaid analogy to the facts of the present case, it become manifestly clear that the deceased plaintiff had left behind only three legal and natural heirs i.e. two sons and one married daughter, out of which the elder son is the defendant in the present suit and the younger son is the applicant in the application under disposal. The notice of application had been duly served upon the married daughter of the deceased plaintiff namely, Smt. Amrit Kaur, however, for the reasons best known to her, she has chosen not to contest the present application, but in view of the service of the notice of application upon her, it can be safely held that she is aware of the contents of the present application which neither of which she has decided to contest nor she had disputed the same.

In view of this fact, now there remain only two legal heirs among whom the fate of the present litigation shall be determined. Since one of them is already the defendant in the present suit, therefore in my opinion the impleadment of the second son as plaintiff to the present suit being LR of the deceased plaintiff is essentially required in the interest of justice and the same would also not cause any prejudice to the defendant as well who is already contesting the case since its institution because in the event the applicant fails to prove his locus and title by way of proving the aforesaid will in accordance with law, in that event the rights and title of the defendant shall automatically be decided. Thereafter, in my opinion, this impleadment is necessary not only in the interest of justice but also for the purpose of proper adjudication of real issue in controversy between the parties on its merits as well.

In view of my aforesaid discussion, the present application of the applicant is allowed and he is directed to be placed as a plaintiff in the array of parties.

13. It was thus stated that though no separate issue was framed in the first suit with regard to the legality and validity of the Will of Shri Ram Singh Maini, in view of the aforesaid order dated 19.3.2005, and in view of the fact that the respondent has since then also examined witness to the Will in his evidence, the question of entitlement of Shri H.S. Maini to a part of the suit property can be validly and legally decided in the first suit. In this regard, reliance was placed on the judgment of the Punjab & Haryana High Court in the case of State v. Chuni Lal Vohra and Anr. .

14. Insofar as the application filed under Section 10 CPC by Shri P.S. Maini in the second suit i.e. CS(OS) No. 664/2005 for stay of the suit proceedings is concerned, his counsel submitted that the matter in issue in the second suit is directly and substantially the same as in the first suit pending between the parties i.e., whether Shri H.S. Maini has any right, title or interest in the suit property. It was, therefore, submitted that simultaneous trial of both the suits might lead to conflicting decisions and, therefore, proceedings in the second suit may be stayed till the disposal of the first suit by the Civil Judge, Delhi.

15. Per contra, counsel for Shri H.S. Maini opposed the aforesaid application and submitted that the scope of the second suit is much wider, as the same is for declaration, injunction and partition of the suit premises by metes and bounds, whereas the first suit is only for eviction on the basis of cancellation of license and thus, it would be in the interest of justice that the first suit be summoned to this Court and be tried along with the second suit to avoid any conflicting decisions. It was further stated that the primary question to be decided in the second suit is the right, title and interest of Shri H.S. Maini to a part of the suit property and the plea of the counsel for Shri P.S. Maini that the legality and validity of the Will of Shri Ram Singh Maini will clinch the issue of the title in the suit property is baseless for the reason that the stand of Sh. H.S. Maini in the second suit is that a family settlement had been arrived at between the parties during the life time of Shri Ram Singh Maini, under which Shri H.S. Maini was given 1/3rd share in the suit property comprising of the first floor thereof. Hence, it was contended that even if evidence is led in first suit with regard to the Will, the other plea taken by Shri H.S. Maini in CS(OS) No. 664/2005 pertaining to the family settlement, would have to be established in the second suit in order to decide his right, title and interest in the suit property. Counsel therefore submitted that not only was the first suit liable to be transferred to this Court, but the same ought to be tried along with the second suit so as to prevent conflicting judgments.

16. In support of his arguments, counsel for Shri H.S. Maini relied on the following judgments:

1. Maxwell Securities Pvt. Ltd. and Ors. v. National Stock Exchange of India Ltd. 2002 I AD (Delhi) 308;

2. Chitivalasa Jute Mills v. Jaypee Rewa Cement ; and

3. Nirmala Devi v. Arun Kumar Gupta and Ors. (2005) 12 SCC 505.

17. I have heard the counsels for the parties and have carefully considered the pleadings and judgments relied on by the parties. There is no doubt in the present case that not only the parties to both the suits are common, but even the subject matter of both the suits is common, namely, the suit property. Section 24 of the CPC empowers the Court to transfer and withdraw any suit, appeal or proceedings to/from any court subordinate to it and competent to try and dispose of the same and the Court can exercise the said power on an application of any of the parties or on its own motion without notice, at any stage at its discretion.

18. In the present case, the cause of action that formed the basis for the first suit arose during the life time of the father of the parties, Shri Ram Singh Maini, when he called upon his elder son Shri H.S. Maini to vacate the suit premises and subsequently issued a legal notice upon him on 25.9.2001. The first suit was filed by Shri Ram Singh Maini against his son claiming to be the owner of the suit property and treating Shri H.S. Maini as a licensee in respect of the first floor of the suit premises, which was stated to have been terminated on the issuance of the legal notice dated 25.9.2001. Thus in the first suit the relief sought was for a decree of declaration and mandatory injunction against Shri H.S. Maini. The question of right and title to the suit property was not at issue at the said stage.

19. Upon the demise of Shri Ram Singh Maini on 29.1.2004, while allowing Shri P.S. Maini to be substituted in his place as a plaintiff in the first suit, on the basis of an assertion that a Will dated 7.9.2001 was executed by the deceased in his favor, the Civil Judge, Delhi, passed an order dated 19.3.2005 observing therein that if Shri P.S. Maini failed to prove his locus standi and title by proving the Will in accordance with law, in that event, the right and title of the defendant in the first suit shall automatically be decided. However, fact remains that even after substitution of Shri P.S. Maini as a legal heir of the deceased father in the first suit, the issues framed much earlier on 9.12.2002 were not amended and thus, no specific issue was framed separately with regard to the legality or validity of the Will of the deceased.

20. Furthermore, even if it is assumed that the issue of the legality and validity of the Will would be considered and decided in the first suit on the strength of the order dated 19.3.2005 passed by the Civil Judge, Delhi, fact remains that in the second suit filed by Shri H.S. Maini, it is his allegation that cause of action arose when his younger brother, Shri P.S. Maini set up the Will of their deceased father and threatened Sh.H.S. Maini of dispossession from the first floor of the suit property, thus compelling him to institute the second suit for declaration, injunction and partition. In the second suit, not only has Shri H.S. Maini challenged the validity of the aforesaid Will, but in addition, has set up a plea of the suit property being ancestral in nature and oral partition thereof taking place in the year 1983-84, during the life time of their father. The said issue is certainly an issue which requires to be taken to trial, so as to fully, finally and effectually decide the disputes between the parties, pertaining to the title and ownership of the suit property. The same can also not be treated as an issue which directly and substantially arises as an issue in the first suit pending before the Civil Judge, Delhi.

21. While discussing the scope of Section 10 of the CPC, the ingredients thereof as elucidated in the case of C.L. Tandon v. Prem Pal Singh reported as must be kept in mind. The same are as below:

(a) The matter/matters in issue should be substantially the same in the two suits;

(b) The previously instituted suit should be pending in the same Court in which the subsequent suit is brought or in another court in India having jurisdiction to grant the relief claimed; and

(c) The two suits should be between the same parties or their representatives and these parties should be litigating in the two suits under the same title.

22. In the case of Shaw Wallace & Co. Ltd. v. Bholanath Madanlal Sherawala and Ors. reported as , a Division Bench of Calcautta High Court while discussing the terms matter in issue in the context of provisions of Section 10 of the CPC observed as below:

13. One of the most essential conditions of Section 10 is that the matter in issue in the latter suit which is sought to be stayed must be directly and substantially in issue in the earlier suit which is pending in the same or in any other court of concurrent jurisdiction. A mere identity of some of the issues in both the suits is not sufficient to attract this section in view of the law laid down by Sir Ashutosh Mookerjee. Unless the decision of the suit operates as res judicata in the other suit, it cannot be said that the matter in issue is directly and substantially the same in both the suits. In other words, the decision in one suit must non-suit the other suit before it can be said that the matter in issue in both the suits is directly and substantially the same.

23. Thus, Section 10 of the CPC mandates that the matter in issue in the earlier instituted suit and the subsequently instituted suit should be directly and substantially in issue in the previously instituted suit. If the cause of action in the subsequently instituted suit is different, in that event, the earlier instituted suit will not be a bar in continuation of the subsequently instituted suit. Therefore, the acid test is that the decision in the earlier suit should operate as res judicata in respect of the subsequently instituted suit.

24. In the case in hand, it cannot be said that the whole of the subject matter in both the proceedings is identical. While the relief sought in the first suit is for a decree of permanent injunction, the second suit has a much wider amplitude for the reason that the plaintiff therein, Sh.H.S. Maini has not only sought a decree of declaration of title but also of partition of the suit property by metes and bounds. There is force in the contention of the counsel for Sh. H.S. Maini that the issues arising for a decision would be substantially common in both the suits and almost the same set of oral and documentary evidence would be needed to be adduced for the purpose of determining the issues of facts and law arising for a decision in both the suits. No doubt there will be duplication of recording of evidence if separate trials are held and a possibility of two courts giving conflicting judgments cannot be ruled out. Thus, even if Shri P.S. Maini is held entitled to grant of a decree of permanent injunction in the first suit, the second suit instituted by Shri H.S. Maini for declaration, partition and permanent injunction has to be put to trial as the title to and the nature of the suit property is an issue which shall have to be decided in the second suit, cause of action for institution of which arose in the year 2004, on the demise of the father of the parties.

25. As this Court has held that the second suit has a much wider scope than the first suit, it cannot be said that the decision in the first suit will operate as res judicata in the second suit for the reason that the ownership and title of Shri H.S. Maini in the suit property cannot be decided comprehensively even if Shri P.S. Maini is able to successfully establish in the first suit that the termination of the license deed of Shri H.S. Maini by the deceased father of the parties was legal and valid and the Will of their deceased father as set up by Sh. P.S. Maini, was legally and validly executed, for the reason that Sh.H.S. Maini has claimed entitlement to 1/3rd share comprising of the first floor in the suit property described as ancestral by him, on the basis of an oral family settlement stated to have been arrived at during the life time of the father of the parties, in the year 1983-84, which claim shall have to be put to trial for the purposes of returning a finding one way or the other. In this view of the matter, the judgment in the case of Chuni Lal Vohra (supra), relied on by the counsel for Shri P.S. Maini, is not applicable to the present case, the same being entirely distinct on facts as also on law, from the case in hand.

26. In light of the aforesaid discussion, while rejecting the application filed by Shri P.S. Maini, in CS (OS) No. 664/2005, namely, I.A. No. 5370/2006, the Transfer Petition (C) No. 12/2006 is allowed. File of suit bearing No. 272/2002 entitled Ram Singh Maini v. Harjeet Singh Maini, pending before the Civil Judge, Delhi, is liable to be transferred to this Court for further proceedings.

27. Insofar as the plea of the petitioner in the Transfer Petition for consolidation of the first suit with CS(OS) No. 664/2005 is concerned, it will be appropriate to take a decision as to whether to consolidate both the suits or put them for trial together only after issues are framed in the second suit.

28. The anxiety expressed on behalf of Shri P.S. Maini that any order of transferring the first suit to this Court shall result in causing delay in its disposal, can be assuaged by binding Shri H.S. Maini to his offer that at the stage of recording his evidence as defendant in the first suit, after framing of issues in the second suit, he may be directed to file a consolidated affidavit for both the suits in a time-bound manner, to which he shall have no objection and further binding him to his undertaking not to press any issue for a decision as a preliminary issue, so as to avoid prolonging the suit proceedings. Shri H.S. Maini shall remain bound by the aforesaid undertakings.

29. The Transfer Petition is allowed and disposed of. IA No. 5370/2006 in CS(OS) No. 664/2005 is rejected. No orders as to costs.

 

A person who expires has either made a ‘will’ or died ‘intestate’.

In case a person has made a ‘will’, it should be submitted for Probate after his death.

A probate means a copy of the Will, certified under the seal of a competent Court with a grant of administration of the estate to the executor of the testator. It is the official evidence of an executor’s authority. A probate granted by a competent court is conclusive evidence of the validity of a Will until it is revoked and no evidence can be admitted to impeach it except in a proceeding to revoke the probate.

In case a person dies ‘intestate’, then all the legal heirs have to apply to a competent court for a ‘Succession Certificate’ so that his property can be devolved upon his successors

What is succession Certificate:

A succession certificate is issued by a civil court to the legal heirs of a deceased person. If a person dies without leaving a will, a succession certificate can be granted by the court to realise the debts and securities of the deceased. It establishes the authenticity of the heirs and gives them the authority to have securities and other assets transferred in their names as well as inherit debts. It is issued as per the applicable laws of inheritance on an application made by a beneficiary to a court of competent jurisdiction. A succession certificate is necessary, but not always sufficient, to release the assets of the deceased. For these, a death certificate, letter of administration and no-objection certificates will be needed.

Section 372 in The Indian Succession Act, 1925
372 Application for certificate. —
(1) Application for such a certificate shall be made to the District Judge by a petition signed and verified by or on behalf of the applicant in the manner prescribed by the Code of Civil Procedure, 1908 (5 of 1908) for the signing and verification of a plaint by or on behalf of a plaintiff, and setting forth the following particulars, namely:—

(a) the time of the death of the deceased;
(b) the ordinary residence of the deceased at the time of his death and, if such residence was not within the local limits of the jurisdiction of the Judge to whom the application is made, then the property of the deceased within those limits;
(c) the family or other near relatives of the deceased and their respective residences;
(d) the right in which the petitioner claims;
(e) the absence of any impediment under section 370 or under any other provision of this Act or any other enactment, to the grant of the certificate or to the validity thereof if it were granted; and
(f) the debts and securities in respect of which the certificate is applied for.
(2) If the petition contains any averment which the person verifying it knows or believes to be false, or does not believe to be true, that person shall be deemed to have committed an offence under section 198 of the Indian Penal Code, 1860 (45 of 1860).
 [(3) Application for such a certificate may be made in respect of any debt or debts due to the deceased creditor or in respect of portions thereof.]
What is the meaning of Probate of Will in India.

A Probate is a document that certifies that the copy of the Will (including Codicils, if there are any) that is attached to it, has been proved in the relevant court. A Probate is issued under a seal of the Court. A Probate can be granted by the Court only to the Executor (ie the person who will implement or execute the Will after its maker’s death). The legal effect of the grant of a Probate is that it establishes the legal character of the Executor to implement the Will and to the validity of the Will. For example if a person appointed as the Executor, transfers certain shares of a company to another person as per the Will, then the company whose shares are being transferred can ask for the status of the Executor, since on their record, the owner is another person. In such a case the Probate establishes the Executor’s right to apply for the transfer of the shares since the owner has died and that the Will is valid.

Section 276 in The Indian Succession Act, 1925
276. Petition for probate.—
(1) Application for probate or for letters of administration, with the Will annexed, shall be made by a petition distinctly written in English or in the language in ordinary use in proceedings before the Court in which the application is made, with the Will or, in the cases mentioned in sections 237, 238 and 239, a copy, draft, or statement of the contents thereof, annexed, and stating—

(a) the time of the testator’s death,
(b) that the writing annexed is his last Will and testament,
(c) that it was duly executed,
(d) the amount of assets which are likely to come to the petitioner’s hands, and
(e) when the application is for probate, that the petitioner is the executor named in the Will.
(2) In addition to these particulars, the petition shall further state,—

(a) when the application is to the District Judge, that the deceased at the time of his death had a fixed place of abode, or had some property, situate within the jurisdiction of the Judge; and
(b) when the application is to a District Delegate, that the deceased at the time of his death had a fixed place of abode within the jurisdiction of such Delegate.
(3) Where the application is to the District Judge and any portion of the assets likely to come to the petitioner’s hands is situate in another State, the petition shall further state the amount of such assets in each State and the District Judges within whose jurisdiction such assets are situate.

 

 

The Indian Succession Act 1925.

To whom administration may be granted, where deceased is a Hindu, Muhammadan, Buddhist, Sikh, Jaina or exempted person.- (1) If the deceased has died intestate and was a Hindu, Muhammadan, Buddhist, Sikh or Jaina or an exempted person, administration of his estate may be granted to any person who, according to the rules for the distribution of the estate applicable in the case of such deceased, would be entitled to the whole or any part of such deceased’s estate.

(2) When several such persons apply for such administration, it shall be in the discretion of the Court to grant it to any one or more of them.

(3) When no such person applies, it may be granted to a creditor of the deceased.

Where deceased is not a Hindu, Muhammadan, Buddhist, Sikh, Jaina or exempted person.- If the deceased has died intestate and was not a person belonging to any of the classes referred to in section 218, those who are connected with him, either by marriage or by consanguinity, are entitled to obtain letters of administration of his estate and effects in the order and according to the rules hereinafter stated, namely:–

(a) If the deceased has left a widow, administration shall be granted to the widow, unless the Court sees cause to exclude her, either on the ground of some personal disqualification, or because she has no interest in the estate of the deceased.

Illustrations

(i) The widow is a lunatic or has committed adultery or has been barred by her marriage settlement of all interest in her husband’s estate. There is cause for excluding her from the administration.

(ii) The widow has married again since the decease of her husband. This is not good cause for her exclusion.

(b) If the Judge thinks proper, he may associate any person or persons with the widow in the administration who would be entitled solely to the administration if there were no widow.

(c) If there is no widow, or if the Court sees cause to exclude the widow, it shall commit the administration to the person or persons who would be beneficially entitled to the estate according to the rules for the distribution of an intestate’s estate:

Provided that, when the mother of the deceased is one of the class of persons so entitled, she shall be solely entitled to administration.

(d) Those who stand in equal degree of kindred to the deceased are equally entitled to administration.

(e) The husband surviving his wife has the same right of administration of her estate as the widow has in respect of the estate of her husband.

(f) When there is no person connected with the deceased by marriage or consanguinity who is entitled to letters of administration and willing to act, they may be granted to a creditor.

(g) Where the deceased has left property in India, letters of administration shall be granted according to the foregoing rules, notwithstanding that he had his domicile in a country in which the law relating to testate and intestate succession differs from the law of India.

Probate only to appointed executor.- (1) Probate shall be granted only to an executor appointed by the will.

(2) The appointment may be expressed or by necessary implication.

Illustrations

(i) A wills that C be his executor if B will not. B is appointed executor by implication.

(ii) A gives a legacy to B and several legacies to other persons, among the rest to his daughter-in-law C, and adds “but should the within-named C be not living I do constitute and appoint B my whole and sole executrix”. C is appointed executrix by implication.

(iii) A appoints several persons executors of his will and codicils and his nephew residuary legatee, and in another codicil are these words,–“I appoint my nephew my residuary legatee to discharge all lawful demands against my will and codicils signed of different dates”. The nephew is appointed an executor by implication.

Persons to whom probate cannot be granted.- Probate cannot be granted to any person who is a minor or is of unsound mind nor to any association of individuals unless it is a company which satisfies the conditions prescribed by rules to be made, by notification in the Official Gazette by the State Government in this behalf.

Administration, with copy annexed, of authenticated copy of will proved abroad.- When a will has been proved and deposited in a Court of competent jurisdiction situated beyond the limits of the State, whether within or beyond the limits of India, and a roperly authenticated copy of the will is produced, letters of dministration may be granted with a copy of such copy annexed.

Conclusiveness of application for probate or administration if properly made and verified.- The application for probate or letters of administration, if made and verified in the manner hereinafter provided, shall be conclusive for the purpose of authorising the grant of probate or administration; and no such grant shall be impeached by reason only that the testator or intestate had no fixed place of abode or no property within the district at the time of his death, unless by a proceeding to revoke the grant if obtained by a fraud upon the Court.

Petition for probate.- (1) Application for probate or for letters of administration, with the will annexed, shall be made by a petition distinctly written in English or in the language in ordinary use in proceedings before the Court in which the application is made, with the will or, in the cases mentioned in sections 237, 238 and 239, a copy, draft, or statement of the contents thereof, annexed, and stating–

(a) the time of the testator’s death.

(b) that the writing annexed is his last will and testament,

(c) that it was duly executed,

(d) the amount of assets which are likely to come to the petitioner’s hands, and

(e) when the application is for probate, that the petitioner is the executor named in the will.

(2) In addition to these particulars, the petition shall further state,–

(a) when the application is to the District Judge, that the deceased at the time of his death had a fixed place of abode, or had some property, situate within the jurisdiction of the Judge; and

(b) when the application is to a District Delegate, that the deceased at the time of his death had a fixed place of abode within the jurisdiction of such Delegate.

(3) Where the application is to the District Judge and any portion of the assets likely to come to the petitioner’s hands is situate in another State, the petition shall further state the amount of such assets in each State and the District Judges within whose jurisdiction such assets are situate.

Petition for letters of administration.- (1) Application for letters of administration shall be made by petition distinctly written as aforesaid and stating–

(a) the time and place of the destator’s death;

(b) the family or other relatives of the deceased, and their respective residences;

(c) the right in which the petitioner claims;

(d) the amount of assets which are likely to come to the petitioner’s hands;

(e) when the application is to the District Judge, that the deceased at the time of his death had a fixed place of abode, or had some property, situate within the jurisdiction of the Judge; and

(f) when the application is to a District Delegate, that the deceased at the time of his death had a fixed place of abode within the jurisdiction of such Delegate.

(2) Where the application is to the District Judge and any portion of the assets likely to come to the petitioner’s hands is situate in another State, the petition shall further state the amount of such assets in each State and the District Judges within whose jurisdiction such assets are situate.

In exercise of powers conferred by Section 9 of Suits Valuation Act, Punjab High Court made rules which are applicable to Delhi.

Suits for partition of property–

Courtfee–(a) as determined by the Courtfees Act, 1870 Value–(b) For the purpose of theSuit Valuation Act, 1887, and the Punjab Court Act, 1918 the value of the whole of the property as determined by Sections 3, 8 and 9 of the Suits Valuation Act, 1887.

6. It would thus be seen that in view of the rules framed by Punjab High Court under Section 9 ofSuits Valuation Act, which admittedly are applicable to Delhi, there can be separate valuations for the purpose of Court fee and jurisdiction. The valuation for the purpose of jurisdiction has to be the value of the whole of the properties subject matter of partition, whereas valuation for the purpose of Court fee would be such as is provided by the Courtfees Act.

————————————————————————————————————————–

            THE HIGH COURT OF DELHI AT NEW DELHI

%                     Judgment Reserved on:   25.02.2011
                      Judgment Pronounced on: 04.03.2011

+           CS(OS) No. 2642/2008


SUSHMA TEHLAN DALAL                             .....Plaintiff


                            - versus -


SHIVRAJ SINGH TEHLAN & ORS                      ....Defendant

Advocates who appeared in this case:
For the Plaintiff:      Mr. Y.P. Narula, Sr. Adv. with
                        Ms. Nandita Rao, Adv.

For the Defendant:            Mr. Mohinder Madan, Adv. for
                              D-1. Mr Vivek Singh, Adv. for D-
                              7.

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

1.

Whether Reporters of local papers may Yes be allowed to see the judgment?

2. To be referred to the Reporter or not? Yes

3. Whether the judgment should be reported Yes in Digest?

V.K. JAIN, J IA No. 10367/2010 (O.7 R.11 CPC by D-1)

1. This is a suit for partition, cancellation of sale deeds, permanent injunction, rendition of accounts and mesne profits. Late Chaudhary Hukum Singh was the owner of the following properties:

(a) 2/28, Roop Nagar, Delhi of 246 square yards on GT Road.

(b) Lands in Village Nunglai Sakrawati, Najafgarh Tehsil Jila, Delhi, Delhi in Khasra Nos. 32/3,4,7/1,12/16,13/20,19,25/21/1,27/5/1,1 3/2,242,49,49/1.

(c) 3 Farm Land Plots, Alipur Delhi, approximately 18 bighas.

(d) Sansar Service Station, Najafgarh (Near Vikas Puri), Delhi;

(e) Anup Service Station, Alaknanda upon land on 99 year lessee from DDA;

(f) Harjeet Filling Statin with adjoining plot Alipur (on GT Karnal Road), Delhi;

(g) 189 Bighas of land situated in Alwar at Khaderpur, Tehsil, Tejara Distt. Alwar, Rajasthan in Khasra No.2 to 16, 23 to 26, 38, 140, 138, 142M, 34M, 1M, 46, 43, 44, 930, 939, 942/1058, 918, 920, 940, 928, 870, 871, 911, 893, 908, 909, 1029, 905, 890, 891, 894, 892, 868, 869, 872 to 875, 878, 906, 907, 1026, 1027, 1028, 896, 897 and 1023 total area around 189 bighas.

He died intestate on 15th August, 1969, leaving six legal heirs, including his widow Smt. Barfo Devi. Smt. Berfo Devi died on 26 th June, 1981, leaving five legal heirs, namely, her son, late Shri Anup Singh Tehlan, her other son Harjeet Singh Tehlan, defendant No.1 Shivraj Singh Tehlan, defendant No. 6 Kaushalya Chaudhary and the plaintiff Sushma Singh Tehlan. Shri Harjeet Singh Tehlan died intestate in the year 2003, without any issues and his wife, who was estranged from him, is stated to have since re- married. It is alleged that his share in the above-referred properties devolved on the plaintiff and the defendants, they being his Class-II legal heirs. Defendants 2 to 5 are the legal heirs of late Shri Anup Singh Tehlan.

2. The plaintiff claims to be in possession of two rooms, two verandahs, two stores, two toilets and washroom in the western wing of the first floor of house No. 2/28, Roop Nagar, Delhi and joint possession of the kitchen, open terrace of the second floor, the flat on second floor and shops and garage on the ground floor. It is further alleged that defendant No. 1 sold some portion of the parental property by executing a General Power of Attorney dated 26th May, 1987. One sale deed in respect of land in village Nangli is alleged to have been executed by defendant No. 1 on 02nd July, 2008 in favour of defendant No. 7, Bharat Singh and another sale deed of the same date is alleged to have been executed in favour of defendant No. 8 Vijay Sharma. The plaintiff has sought partition of the above- referred properties, besides seeking rendition of accounts and mesne profit with respect to the profits earned from the service stations. She has also sought cancellation of the sale deeds dated 02nd July, 2008, executed by defendant No. 1 in favour of defendant Nos. 7 and 8.

3. Para 2 of the plaint which deals with valuation reads as under:

“The suit is valued over a crore for the purpose of jurisdiction. As regards the reliefs of permanent injunction, the suit is valued at Rs 20,01,000/- and a court fee of Rs 22,000/ has been paid. As regards the relief of partition and mesne profits, the suit is valued at Rs 200/- and a court fee of Rs 20 has been paid. As regards the relief of cancellation for the documents being sale deeds dated 02.07.2008 which are a fraud, nullity the suit is valued at Rs 200. The plaintiff also undertakes to pay any further court fee which may be required to be paid on actual partition of the property.”

4. IA No. 10367/2010 has been filed by defendant No. 1, seeking rejection of the plaint on the ground that the plaintiff has not paid requisite Court fee.

5. Section 8 of the Suits Valuation Act, 1887 provides that where other than those referred to in the Court-fees Act, 1870 Section 7, paragraph v, vi and ix, and paragraph x, clause (d), Court-fees are payable ad valorem under the Court-fees Act, 1870, the value as determinable for the computation of court-fees and the value for purposes of jurisdiction shall be the same. Section 9of the above- referred Act provides that when the subject-matter of suits of any class, other than suits mentioned in the Court-fees Act, 1870, Section 7, paragraph v and vi, and paragraph x, clause (d) is such that in the opinion of the High Court it does not admit of being satisfactorily valued, the High Court may with the previous sanction of the State Government, direct that suits of that class shall, for the purposes of the Court-fees Act, 1870, and of this Act and any other enactment for the time being in force, be treated as if their subject-matter were of such value as the High Court thinks fit to specify in this behalf.

In exercise of powers conferred by Section 9 of Suits Valuation Act, Punjab High Court made rules which are applicable to Delhi.

Suits for partition of property–

Court-fee–(a) as determined by the Court-fees Act, 1870 Value–(b) For the purpose of the Suit Valuation Act, 1887, and the Punjab Court Act, 1918 the value of the whole of the property as determined by Sections 3, 8 and 9 of the Suits Valuation Act, 1887.

6. It would thus be seen that in view of the rules framed by Punjab High Court under Section 9 of Suits Valuation Act, which admittedly are applicable to Delhi, there can be separate valuations for the purpose of Court fee and jurisdiction. The valuation for the purpose of jurisdiction has to be the value of the whole of the properties subject matter of partition, whereas valuation for the purpose of Court fee would be such as is provided by the Court-fees Act.

7. Section 7(iv)(b) of Court Fees Act, provides that in a suit to enforce the right to share in any property on the ground that it is a joint family property, the amount of fee payable under Court-fee Act, shall be computed according to the amount at which the relief sought is valued in the plaint or memorandum of appeal. It further provides that in all such suits the plaintiff shall state the amount at which he values the relief sought by him. Article 17(vi) of Schedule II of Court-fees Act provides for payment of a fixed Court fee in a suit where it is not possible to estimate at a money value the subject matter in dispute, and which is not otherwise provided for by this Act.

8. In S. Rm. Ar. S. Sp. Sathappa Chettiar v. S. Rm. Ar. Rm. Ramanathan Chettiar AIR 1958 SC 245, Supreme Court, inter alia, read as under:

“If the scheme laid down for the computation of fees payable in suits covered by the several sub-sections of S. 7 is considered it would be clear that in respect of suits falling under sub-section

(iv), a departure has been made and liberty has been given to the plaintiff to value his claim for the purposes of court- fees. The theoretical basis of this provision appears to be that in cases in which the plaintiff is given the option to value his claim, it is really difficult to value the claim with any precision or definiteness. Take for instance the claim for partition where the plaintiff seeks to enforce his right to share in any property on the ground that it is joint family property. The basis of the claim is that the property in respect of which a share is claimed is joint family property. In other words, it is property in which the plaintiff has an undivided share. What the plaintiff purports to do by making a claim for partition is to ask the court to give him certain specified properties separately and absolutely on his own account for his share in lieu of his undivided share in the whole property. Now it would be clear that the conversion of the plaintiff’s alleged undivided share in the joint family property into his separate share cannot be easily valued in terms of rupees with any precision or definiteness. That is why legislature has left it to the option of the plaintiff to value his claim for the payment of court-fees. It really means that in suits falling under S. 7(iv)(b) the amount stated by the plaintiff as the value of his claim for partition has ordinarily to be accepted by the court in computing the court-fees payable in respect of the said relief. In the circumstances of this case it is unnecessary to consider whether, under the provisions of this section, the plaintiff has been given an absolute right or option to place any valuation whatever on his relief.”

9. In Neelavathi and Ors. v. N. Natarajan and Others, AIR 1980 SC 691, which arose out of a suit for partition, the plaintiff averred in the plaint that they were in joint possession of the property along with the defendants. The plaintiffs had valued their share of the property and paid fixed court fee of Rs 200/- under Section 37(2) of Tamil Nadu Court-Fee and Suits Valuation Act. It was contended by the defendants in that suit that the plaintiff were not in joint possession and, therefore, were required to pay ad valorem Court fee at the market rate. The suit was dismissed on the ground that ad valorem Court fee had not been paid. Allowing the appeals, filed by the plaintiff, Supreme Court held that the question of Court fee was to be considered in the light of allegations made in the plaint and decision of this issue cannot be influenced either by the plea taken in the written statement or by final decision of the suit on merits. In that case, the plaintiff had stated in the plaint that the defendants had failed to give their share of income and they could not remain in joint possession. It was held that this averment would not mean that the plaintiffs had been excluded from possession of the suit property. During the Course of judgment, Supreme Court, inter alia, observed as under:

“It will be seen that the Court-fee is payable under Section 37(1) if the plaintiff is ‘excluded’ from possession of the property. The plaintiffs who are sisters of the defendants, claimed to be members of the joint family, and prayed for partition alleging that they are in joint possession. Under the proviso to Section 6 of the Hindu Succession Act, 1956 (Act 30 of 1956) the plaintiffs being the daughters of the male Hindu who died after the commencement of the Act having at the time of the death an interest in the mitakshara coparcenary property, acquired an interest by devolution under the Act. It is not in dispute that the plaintiffs are entitled to a share. The property to which the plaintiffs are entitled is undivided joint family property’ though not in the strict sense of the term. The general principle of law is that in the case of co-owners, the possession of one is law possession of all unless ouster or exclusion is proved. To continue to be in joint possession in law, it is not necessary that the plaintiff should be in actual possession of the whole or part of the property. Equally it is not necessary that he should be getting a share or some income from the property. So long as his right to a share and the nature of the property as joint is not disputed the law presumes that he is in joint possession unless he is excluded from such possession. Before the plaintiffs could be called upon to pay Court-fee under Section 37(1) of the Act on the ground that they had been excluded from possession, it is necessary that on a reading of the plaint, there should be a clear and specific averment in the plaint that they had been ‘excluded’ from joint possession to which they are entitled to in law.”

(emphasis supplied)

10. In Jagannath Amin vs. Seetharama (dead) by Lrs. and Ors. 2007 (1) SCC 674, a suit for partition of agricultural land was filed seeking its division into two equal shares. The plaintiff had paid Court fee of Rs 200 under Section 35(2) of Karnataka Court-fees and Suit Valuation Act, 1958. The plaintiffs had also alleged to be in joint possession of the suit property. During the course of the judgment, Supreme Court, referred to the following observation made by it in Commercial Aviation and Travel Co. Vs. Vimla Panna Lal, AIR 1988 SC 1636:

“It is true that the Court did not consider whether the plaintiff had been given an absolute right or option to place any valuation whatever on his relief under the provision of Section 7(iv) of the Court-fees Act, but the difficulty that would be felt by the Court in exercising its power under Order VII, Rule 11(b) of the Code of Civil Procedure is that if it is unable to determine the correct value of the relief, it cannot direct the plaintiff to correct the valuation. Order VII, Rule 11(b) contemplates correct valuation and not approximate correct valuation and such correct valuation of the relief has to be determined by the Court. If the Court cannot determine the correct valuation of the relief claimed, it cannot require the plaintiff to correct the valuation and, consequently. Order VII, Rule 11(b) will not be applicable.”

11. The following legal proposition of law emerges from the above-referred decisions:

(i) In order to ascertain whether the suit has been property valued for the purpose of Court fee or not, only the averments made in the plaint have to be seen, without reference to the plea taken by the defendants;

(ii) If the plaintiff claims to be in joint possession of the suit property, he has to pay a fixed Court fee in terms of Article 17(vi) of Court-fees Act.

(iii) If the averments made in the plaint show that the plaintiff has been completely ousted from possession and is not in possession of any part of the suit property, he is required to claim possession and also pay ad valorem Court fee on the market value of his share in the suit property.

12. In the present case, the plaintiff has specifically alleged that she is in exclusive possession of house No. 2/28, Roop Nagar, Delhi and in joint possession of certain other parts of the aforesaid house. Thus, the plaintiff has undisputedly claimed joint possession with respect to one of the properties in respect of which partition has been sought by her. In my view, in order to constitute joint possession, it is not necessary that the plaintiff should claim to be in joint possession of each of the properties in respect of which partition is sought by him/her. If she claims to be in joint possession of even one of the properties either wholly or partly, that would be sufficient to bring the case within the ambit of Article 7(iv) of Court-fees Act, because what is relevant is joint possession of the estate in respect of which partition is sought. The plaintiff is seeking partition not with respect to any one property, but with respect to all the properties which were owned by her late parents. If partition is sought in respect of more than one property and one of the co-owners possesses one property or a part of it and the other co-owners possess the remaining properties, all of them will be deemed to be in joint possession of the properties subject matter of partition. In this regard, the following observations made by this Court in Sudershan Kumar Seth vs. Pawan Kumar Seth & Ors. 124 (2005) DLT 305:

“It is settled that in order to decide as to what relief has been claimed by the plaintiff, the whole of the plaint has to be read. From the perusal of the plaint if it can be inferred that the plaintiff is in possession of the any of properties to be partitioned, then the court fees shall be payable under Article 17 (6) of Schedule II of the Court fees Act i.e. fixed court fees at the time of institution of the suit but if the conclusion is that the plaintiff is not in possession of any part of the properties then the plaintiff has to pay Court fees under section 7(iv)(b) of the Court fees Act i.e. on the value of plaintiff’s share.”

13. Moreover, in the case before this Court, there is no averment in the plaint that the plaintiff has been ousted from the possession of the other properties which were owned by her parents. It is true that she has not specifically averred that she is in joint possession of the other properties, but, it is also equally true that she does not claim or admit ouster from those properties. She being one of the co-owners of the other properties is by fiction of law, deemed to be in joint possession of those properties along with other co-owners unless she pleads or admits complete ouster from those properties. This view also confirms to the observations made by Supreme Court in the case of Neelavathi (supra) that the general principle of law is that in case of co-owners, it is not necessary that the plaintiff should be in actual possession of the property, the possession of one co-owner is in law the possession of all unless ouster or exclusion is proved and so long as his right to share and the nature of the property as joint is not disputed, the law presumes that he is in joint possession, unless he is excluded from such possession.

14. The logic behind not insisting on payment of ad valorem Court fee in a case of joint possession was explained by Supreme Court in the case of Sathappa Chettiar (supra) when the Court said that in such cases what the plaintiff seeks by claiming partition is to ask the Court to give certain specific properties to him for his absolute and exclusive enjoyment, to the exclusion of other co-owners of that property and, thereby what he is seeking only a conversion of his undivided share into a separate share. Moreover, as observed by Supreme Court in the case of Jagannath Amin (supra), the Court needs to have exact valuation before it, before it can reject the plaint under Order VII Rule 11(d) of Code of Civil Procedure and that determination cannot be made in such a case.

15. Therefore, there is no ground to reject the plaint, as far as Court fee on the relief of partition is concerned. During the course of arguments, the learned counsel for the plaintiff fairly stated that as far as relief of cancellation of sale deeds are concerned, the plaintiff would pay ad valorem Court fee on the sale consideration, shown in the sale deeds, executed in favour of defendants 7 and 8. Therefore, the plea taken by the plaintiff with regard to inadequate Court fee on the relief of cancellation of sale deeds does not survive anymore. The plaintiff is directed to pay deficient Court fee on the relief of cancellation of sale deeds within two weeks.

The application stands disposed of accordingly.

(V.K. JAIN) JUDGE MARCH

 

 

NEW DELHI: The Supreme Court on Wednesday allowed resumption of nursery admissions in Delhi which were stalled over scrapping of inter-state transfer quota seats.

images nursery

The apex court quashed the February 27 notification issued by the Delhi lieutenant governor to scrap the inter-state transfer quota and granted admission to successful transfer quota candidates whose parents had approached court.

The apex court said wards of those who had approached the court challenging scrapping of the inter-state transfer quota would be given a seat even if a particular school had filled all seats and asked the Delhi government to raise number of seats, if required, to accommodate 24 students whose parents had approached the court.

With the Supreme Court’s ruling, the five-monthlong impasse on nursery admissions in Delhi finally came to an end.

The SC had on April 11 put nursery admissions on hold again in Delhi schools after it put a stay on Delhi HC’s April 3 interim order directing that those children who were selected in draw of lot for neighbourhood and other categories, be admitted.

It had on April 28 asked Delhi government to consider increasing seats in schools to accommodate inter-state transfer cases.o

Sources: http://timesofindia.indiatimes.com/home/education/news/SC-allows-resumption-of-nursery-admissions-in-Delhi/articleshow/34770861.cms

 

Click to read whole judgement below the link.

supreme court nursery order

preliminary issue-order 14 rule 2 of CPC.

 

 
preliminary issue.
 
order 14 rule 2 of cpc.
 
Court to pronounce judgment on all issues
 
(1) Notwithstanding that a case may be disposed of on preliminary issue, the Court shall, subject to the provisions of sub-rule (2), pronounce judgment on all issues.
 
(2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to-
 
(a) the jurisdiction of the Court, or
 
(b) a bar to the suit created by any law for the time being in force, and for that purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has been determined, and may deal with the suit in accordance with the decision on that issue.
 
 

IA 12530/2000 in CS(OS) 1823/2000 Page 1 of 17
THE HIGH COURT OF DELHI AT NEW DELHI
%   Judgment delivered on: 20.09.2010
IA No.12530/2000 in CS(OS) No.1823/2000
Sh. Anil Kumar Sanghi & Anr. ….. PLAINTIFFS
Vs 
Sh. Hari Kishan Sanghi & Ors.             ….. DEFENDANTS
                            
Advocates who appeared in this case:
For the Plaintiff : Mr. Pravir K.Jain, Advocate
For the Defendant:  Mr. Arvind Kumar & Ms. Neelam Rathore, Advocates for D-1&2.
Mr. Rajat Aneja, Advocate for D-5/Applicant.
Ms. Padma Priya, Advocate for D-7 / NHAI.
CORAM :-
HON’BLE MR JUSTICE RAJIV SHAKDHER
1.  Whether the Reporters of local papers may 
   be allowed to see the judgment ?  No
2.  To be referred to Reporters or not ?  Yes
3.  Whether the judgment should be reported 
      in the Digest ?  Yes
RAJIV SHAKDHER, J
IA No. 12530/2000 (O. 7 R. 11 and S. 151 of CPC by Deft. No. 5)
1. By this order I propose to dispose of the captioned application, which  has been 
filed by R.K.S. India Pvt. Ltd. erstwhile defendant no.5 (hereinafter referred to as “RKS”)
under the provisions of Order  VII Rule 11 read with Section 151 of the Code of Civil 
Procedure, 1908 (in short, “CPC”).  
2. At the outset, as it is evident, this application has been pending for the  last 10 
years.   The parties to date have not led evidence. In this context, there are two orders 
which I must refer to right in the beginning.   
2.1 First, is  the  order dated 24.01.2001 wherein, it has been noticed that the 
applicant/RKS had filed an application under Order VII Rule 11 CPC read with Section 
151 CPC for dismissal of the suit  on the ground of lack  of cause of action, and on the 
ground of jurisdiction.  The court observed that this objection be taken as a preliminary IA 12530/2000 in CS(OS) 1823/2000 Page 2 of 17
objection in the written statement which would be considered as a preliminary issue.  The 
court,  further went on to  observe that the said  application shall be decided by way of 
decision on the preliminary issue  arising out of the written statement.  Accordingly, 
defendants including applicant/RKS were directed to file their respective  written 
statements.  Consequent thereto the defendants have filed their written statements.  The 
plaintiffs in response thereto, have filed their replication.  
2.2 The second order, to which reference is required is: order dated 16.12.2003.  By 
this order, issues were cast in the suit.  The total number of issues cast in suit are thirty 
nine.  Out of these, issue nos.24, 31, 32 & 33 were treated as preliminary issues.  For the 
sake of convenience, the said issues are extracted hereinafter :-
“Issue No.24- Whether the suit is not maintainable in terms of Order 7 Rule 
11  CPC? OPD3&4
Issue No.31- Whether defendant no.5 is a tenant in different portions of suit 
property, as mentioned in sub-paras a, b and c of para A of preliminary 
objections of written statement filed by defendant no.5? OPD-5
Issue No.32- If Issue No.32 is answered in the affirmative, whether the suit 
is barred under Section 50 of Delhi Rent Control Act? OPD-5
Issue No.33- Whether there is no cause of action against defendant no.5 for 
filing the present suit, as alleged in the written statement filed by defendant 
no.5?  If so, its effect?  OPD-5”
3. With the aforesaid prefatory note, let me briefly advert to the facts, which in my 
view, would be relevant for the purposes of disposal of the captioned application.  
4. The plaintiffs have filed the instant suit for possession, declaration, rendition of 
accounts and injunction.  It is averred in the plaint that one Mahabir Prasad, who died in 
December, 1970 was blessed with three sons.  These being: Mr. Hari Kishan Sanghi, Mr. 
Tek Chand Sanghi and Mr. Ram Kishan Sanghi.  The plaintiffs, that is; Mr. Anil Kumar 
Sanghi, Mr. Arun Kumar Sanghi alongwith Mr. Sanjay Kumar Sanghi are progeny of Mr. 
Ram Kishan Sanghi and Smt. Indra Devi.  Similarly, Mr. Hari Kishan Sanghi was blessed IA 12530/2000 in CS(OS) 1823/2000 Page 3 of 17
with two sons Mr. Rajender Kumar Sanghi and Mr. O.P. Sanghi.  Mr. O.P. Sanghi had 
expired prior to the institution of the present suit.  Mr. Rajender Kumar Sanghi was 
married to Smt. Prabha Sanghi.  They were blessed with a son i.e., Mr. Ankur Sanghi.  At 
the point in time when, the suit was first instituted, Mr. Hari Kishan Sanghi alongwith his 
son,  daughter in law and grandson  were  impleaded as  defendant no.1, 2, 3 and 4 
respectively, while Mr. Ram Kishan Sanghi, who was also impleaded in the suit alongwith 
his wife Smt. Indra Devi and his third son Mr. Sanjay Kumar were arrayed as  defendant 
nos.7, 8 & 9.  Therefore, the two branches of the family emerged.  The branch of Mr. Hari 
Kishan Sanghi comprised of himself; his son, Mr. Rajender Kumar Sanghi; his daughterin-law, Ms. Prabha Sanghi; and grandson, Mr.Ankur Sanghi.  The other branch comprised 
of the plaintiffs i.e. Mr. Anil Kumar Sanghi and Mr. Arun Kumar Sanghi alongwith their 
father Mr. Ram Kishan Sanghi, their mother, Smt. Indra Devi and their brother Mr. Sanjay 
Kumar Sanghi.  For the sake of convenience, the two branches are compendiously referred 
to hereinafter by me as: Hari Kishan and family; and Ram Kishan and family.  As noticed 
above, the two branches traced their root to Mahabir Prasad Sanghi.
5. It is the case of the plaintiffs that Mr. Hari Kishan Sanghi alongwith Mr. Ram 
Kishan Sanghi and their brother Mr. Tek Chand Sanghi (who are the uncles of the 
plaintiffs) and Sh. Mahabir Parsad Sanghi  (who was the plaintiffs‟ grand father)
constituted a Joint Hindu Family.  It is also the case of the plaintiffs that the said Mahabir  
Prasad Sanghi alongwith his two sons, referred to above, lived as members of a Joint 
Hindu Family, and in the process acquired various properties and businesses.  The said 
joint family, it is averred, resided in a tenanted property situated at 61, Darya Ganj,  Delhi.  
The above members of the Joint Family  it is averred,  were joint in estate, mess and 
worship.
6. What is pertinent for the purposes of the captioned application is that the joint 
family, it appears acquired, amongst various other properties,  four (4) plots in Delhi,
which were, numbered as plots nos.1, 2, 3 & 4 Kilokari Village, Ring Road, New Delhi-
110 014 (hereinafter, referred to as Property No.1, 2 and 3 respectively).  These plots, it is IA 12530/2000 in CS(OS) 1823/2000 Page 4 of 17
averred, were acquired in 1957 by the joint family in the name of Mr. Mahabir   Prasad 
Sanghi, who was the karta of the joint family.  I am, not for the moment, referring to other 
properties and agricultural  lands which, the plaintiffs claim the joint family owns and 
possesses.  
6.1 It is also the case of the plaintiffs that in 1960-1962, super-structures were raised 
on property nos.1, 2 & 3 out of the funds owned by the joint family.  
6.2 It is averred that in 1964, a partial partition took place between the members of the 
joint family, and consequent thereto, property no.3, with the superstructure then obtaining 
, fell to the share of the branch of the family headed by Mr. Ram Kishan i.e. the father of 
the plaintiffs herein.  In-so-far-as property no.2 was concerned,  by virtue of the very same 
partition, fell to the share of Mr. Tek Chand Sanghi, while property no.1 came to the share 
of the family of Mr. Hari Kishan Sanghi. 
7. It is the case of the plaintiffs that Mr. Hari Kishan Sanghi being the eldest son of 
Mr. Mahabir Prasad Sanghi, had in sum and substance taken over the reins of the family,
and thereby exerted great amount of influence on the other members of the family.  The 
plaintiffs allege that the affairs of the family, which also included management of  the 
property  which fell to the share of Ram Kishan Sanghi and family i.e. Property No.3 was 
within the domain of Mr. Hari Kishan Sanghi.  The averments to that effect have been 
made in paragraph 14 of the plaint.  There are also averments to the effect that the ground 
floor of property no.3 was let out on rent to Ranbaxy, W.H.O., GM (Postage & 
Telegraph), etc., and the rents which were realized by Mr. Hari Kishan Sanghi were 
deposited, in joint account of  Ram Kishan Sanghi and family. It is further averred that out 
of the rental income of the  ground floor of the property no.3, further construction was 
carried out whereby, the first floor and the barsati floor alongwith the annexe was raised 
on property no.3.  It is alleged that between 1964-1980, the ground floor was let out by 
Mr. Hari Kishan Sanghi to various tenants on behalf of Ram Kishan Sanghi  and family.  
For this purpose, it is averred, Mr. Hari Kishan Sanghi obtained a power of attorney in 
favour of his son Mr. Rajender Kumar Sanghi from the plaintiffs (i.e. Anil Kumar Sanghi IA 12530/2000 in CS(OS) 1823/2000 Page 5 of 17
and Arun Kumar Sanghi) and Defendant Nos. 7 and 8 (i.e. Mr. Ram Kishan Sanghi and 
Smt. Indra Devi).  There is also an averment to the effect that by a registered deed dated 
29.03.1980, a partition, in respect of property no.3, took place in the family of Mr. Ram 
Kishan Sanghi whereby, the two plaintiffs and Mr. Ram Kishan Sanghi, Smt. Indra Devi 
and Mr. Sanjay Kumar acquired 1/5
th
undivided share in property no.3.   It is specifically 
averred that this partnership deed was witnesseth by Mr. Hari Kishan Sanghi.  There are 
further averments to the effect that in 1989, the first floor of property no.3 was let out to 
an entity by the name of Indian  Renewable Energy Development Agency (i.e. M/s. 
IREDA) vide lease agreement dated 30.06.1989 at a rent of Rs.45,000/- p.m.
8. In so far as applicant / RKS is concerned, there are averments made in para 22 of 
the plaint.  The said averments basically advert to the fact that  in 1975, the joint family 
comprising of Mr. Hari Kishan Sanghi, Mr. Ram Kishan Sanghi and Mr. Tek Chand 
Sanghi acquired an industrial plot bearing no.10, DLF Industrial Estate, Faridabad by 
acquiring share holding rights in the company by the name of M/s.  Optical Instrument 
Company Pvt. Ltd., which at that point of time evidently owned the said property.  
Subsequently, it is averred, the name was changed to the present name of applicant i.e. 
R.K.S. India Pvt. Ltd.  It is alleged that the management and control of the said company 
was, however, entrusted to Mr. Hari Kishan Sanghi.  
9. What is important is that the plaintiffs have specifically adverted to the fact that  
Mr. Hari Kishan Sanghi had got signatures of Mr. Ram Kishan Sanghi, Smt. Indra Devi 
and Mr. Sanjay Kumar on blank papers and documents which included stamp papers by 
representing to them that the said documentation was required for taxation purposes.  
There is also a reference to the fact that in early 1991, the ground floor of property no.3 
was let out to one French company  at  a rent of Rs.1,30,000/- p.m., out of which   only 
Rs.30,000/- was shown as the rent, while the balance sum was shown as “liaison charges”
only to avoid tax liability.  The fact that the signatures on documents were appended by 
Mr. Hari Kishan Sanghi, in good faith, is also adverted in para 24 and 28 of the plaint.IA 12530/2000 in CS(OS) 1823/2000 Page 6 of 17
10. The plaintiffs have filed a site plan to show that while the annexe to the super 
structure built on property no.3 is in their possession, including the drive way and all other 
portions marked therein in yellow colour, the first floor and the barsati, which is marked in 
red colour, is in possession of Hari Kishan Sanghi and family.  It is averred that the first 
floor and the barsati floor is occupied by M/s. Pulse Impulse Health Club Fitness Centre, 
which is an entity controlled by Hari Kishan Sanghi and family.  At the relevant point in 
time, the ground floor which is marked green, in the site plan, was occupied by defendant 
no.10 i.e. National Highway Authority of India (in short „NHAI‟).  
10.1 To be noted during the pendency of the proceedings,  NHAI  has vacated the 
premises.  Reference in this regard may be made to order dated 23.09.2002 passed by this 
court. 
11. In the background of these broad averments, the plaintiffs have sought reliefs of 
declaration that they are owners of property no.3, more specifically comprising of the 
main building, annexe, servant quarters and  garages shown in colour yellow, red, green
and brown in the site plan appended to the plaint.   The plaintiffs also sought possession of 
entire first and barsati floor of property no.3 alongwith servant quarters and  garages 
shown in colour red in the site plan appended to the plaint.  A mandatory injunction was 
also sought at the relevant point in time qua NHAI India as also the injunction against 
Hari Kishan Sanghi and family against creating any third party rights in property no.3 or 
any part thereof.  There are other reliefs also sought for, such as rendition of accounts with 
regard to other properties, I am  not detailing the same out, as presently one is  not 
concerned with them.
12. The applicant/ RKS in both in the written statement as well as in the captioned 
application  has raised preliminary objections with regard to lack of cause of action qua 
itself, as  also raised objection as to the jurisdiction  of the court to entertain and try the 
instant suit in the background of the following averments.  Briefly, these are  as follows:-IA 12530/2000 in CS(OS) 1823/2000 Page 7 of 17
(i) Vide lease deed dated 22.05.1985 executed in its favour by Ram Kishan 
Sanghi  and family, it acquired  leasehold  rights in the second floor of 
property no.3 alongwith three floors in the annexe block.  The rent as per 
the lease deed is a sum of Rs.1,000/- p.m.  More importantly, as per the 
said lease deed, applicant/RKS  could use the demised premises not only 
for commercial and residential purposes but could also sub-let the demised 
premises or any part thereof. 
(ii) It is averred that by virtue of yet another lease deed dated 09.07.1990, 
applicant/RKS surrendered possession of the annexe block in favour of  
Ram Kishan Sanghi  and family, however, it retained tenancy rights with 
respect to the second floor of the main building of property no.3.  The rent, 
however, remained fixed at Rs.1,000/- p.m.  In so far as the ground floor of 
the main building of property no.3 was concerned, it was let out to the 
applicant/RKS for commercial and residential purposes at a rent of 
Rs.2500/- with a further right to further sub-let.
(iii)By virtue of a lease deed dated 04.01.1995, Shri Hari Kishan Sanghi acting as 
the attorney of  Ram Kishan Sanghi and family, leased out the first floor of 
the main building of Property no.3 to the applicant/RKS @ Rs.2,000/- p.m.  
In this lease deed as well the applicant/RKS was given the right to sub-let 
the demised premises.  
(iv)The applicant/RKS has averred that it is an independent entity which has 
acquired tenancy right in the ground floor, first floor and the second / 
barsati floor of the main building of property no.3.  It is thus submitted by 
applicant/RKS that neither does it have anything to do with the joint family 
nor has any cause of action arisen against it.  It is, therefore pleaded, that 
since  there is no cause of action in so far as applicant / RKS is concerned, 
it should be deleted from the array of parties by taking recourse to 
provisions of Order 1 Rule 10(2) of the CPC. IA 12530/2000 in CS(OS) 1823/2000 Page 8 of 17
(v) In addition, it is also pleaded that the suit is not maintainable in view of the 
provisions of Section 50 of Delhi Rent Control Act, 1958 (in short, D.R.C. 
Act).  The stance being that: since the rent of the  various portions of the 
main building of property no.3 (referred to above) is  less than Rs.3500/-
p.m., it is a matter over which  only  the Rent Controller  would have 
jurisdiction, and therefore, by virtue of Section 50 of the D.R.C. Act, the 
jurisdiction of this court is ousted.  In this connection, it is specifically 
averred that the plaintiffs while, referring to the fact that Mr. Hari Kishan 
Sanghi had let out various portions of property no.3 from time to time to 
various tenants; had concealed the material fact pertaining to execution of 
the three lease deeds referred to in the written statement, and the captioned 
application.
13. At this juncture, it may perhaps be  pertinent to refer to order dated 06.04.2005 
passed in IA No.3191/02 whereby, NHAI which was erstwhile defendant no.10 was 
deleted from the array of parties based on the application filed by NHAI.  The application 
was  pivoted  on the circumstance that  since  NHAI was inducted as a sub-tenant in  a 
portion of property no.3, and the fact that, it had vacated the premises on 30.09.2009; it 
ought to be deleted from the array of parties as, no relief was sought against it.  The court 
based on the application of NHAI directed its deletion from the array of parties.  NHAI 
was, however, directed to file copy of the lease deed, by which, it had been inducted as a 
tenant. 
13.1 By the very same order, directions were passed in IA 12531/2000, whereby Mr. 
Ram Kishan Sanghi, erstwhile defendant no.7, Smt. Indra Devi, erstwhile defendant no.8 
and Mr. Sanjay Kumar, erstwhile defendant no.9 were transposed as plaintiffs.  In these 
circumstances, plaintiffs were directed to file an amended memo of parties.  These orders 
are referred to for the purposes of bringing to fore the fact that the original memo of IA 12530/2000 in CS(OS) 1823/2000 Page 9 of 17
parties stood amended; therefore, as noticed above, the defendants are largely referred to 
by name.   
14. Mr. Aneja, who appeared for the applicant/RKS has argued before me that in view 
of the  lease deeds referred to hereinabove, the execution of which according to him being 
not in dispute, the plaint ought to be rejected in so far as the applicant/RKS is concerned 
as mandated by the provisions of Order VII Rule 11 (a) & (d) of the CPC.  Mr. Aneja has 
also argued that the plaintiffs have not as a matter of fact impugned the said lease deeds.  
It is submitted that the plaintiffs ought to have, in terms of Section 34 of the Specific 
Relief Act, 1963 sought a declaratory relief with respect to the said lease deeds.  The suit 
in these circumstances according to Mr. Aneja is not maintainable.  It is also urged by Mr. 
Aneja that provisions of Section 92 of the Indian Evidence Act, 1872 would prevent the 
plaintiffs from leading any evidence contrary to the contents of the said lease deeds.  
15. Mr. Jain, who appeared for the plaintiffs, submitted that this court is presently 
called upon only to deal with the application filed under Order VII Rule 11 (a) & (d) of 
the CPC, therefore,  the court would only be required to examine the averments made in 
the plaint.  It was contended by him that from the averments made in the plaint, it would 
be quite clear that cause of action, as against the applicant, does arise.  In so far as the case 
set up by the applicant/RKS with regard to ouster of jurisdiction is concerned, Mr. Jain 
relied upon those averments made in the plaint, wherein it has been stated by the plaintiffs 
that from time to time signatures had been obtained of the members of Ram Kishan 
Sanghi  and family by  Shri Hari Kishan Sanghi on blank papers which included stamp 
papers, on the pretext that they were required for tax purposes.   Mr. Jain also refers to the 
averments made in the replication to the written statement filed by the applicant/RKS to 
contend and demonstrate that the veracity of the said lease deeds is squarely challenged.  
Mr. Jain specifically adverted to the fact that there is no denial of the averments made in 
the plaint to the effect that the portions of the property no.3 were let out from time to time 
on rents which were far in excess of Rs.3,500/-.  In this context, one such lease deed dated IA 12530/2000 in CS(OS) 1823/2000 Page 10 of 17
30.06.1999, amongst others, was referred to.  Mr. Jain also sought to contend that, the 
affairs of property no.3 were managed by Shri Hari Kishan Sanghi  as the attorney of Ram 
Kishan Sanghi and family.  He drew my attention to various documents appended at pages 
166, 173 & 186  of the documents filed by the plaintiffs  to demonstrate that Shri Hari 
Kishan Sanghi was  acting for and on behalf of Ram Kishan Sanghi and family in respect 
of property no.3 before the Municipal Corporation of Delhi for the purposes of assessment 
of property tax. 
16. I have heard learned counsel for the parties.  In my view, there are two aspects to 
the matter: first, whether the issue nos. 24, 31, 32 and 33 can be tried as preliminary 
issues.  It is pertinent to note that parties have been stuck; at this stage, and consequently, 
have not led evidence since December, 2003, only for this reason.  The second aspect is 
whether captioned application is maintainable.  Let me deal with the second aspect, first, 
since one is required to tread a known path.   It is trite law that  while dealing with an 
application under Order  VII Rule 11 CPC, the court is only required to look at the 
averments made in the plaint.  The averments made in the written statement are wholly 
irrelevant in order to ascertain as to whether or not, there arises a cause of action or, even 
with respect to bar of maintainability of the suit.   If an authority is required for this 
purpose, I would rely upon the judgment of the Supreme Court in the case Ramesh B. 
Desai and Ors. Vs. Bipin Vadilal Mehta and Ors. (2006) 5 SCC 638 at pages 650-652 
paragraphs no.14 & 15.  In this case, a company petition filed under section 155 (of the 
then prevailing provisions of the Companies Act, 1956) was dismissed on the ground of 
limitation by relying upon averments made in affidavit-in-reply. The Supreme Court in 
this context made the following observations:-
“14. The plea raised by the contesting respondents is in fact a plea of 
demurrer.  Demurrer is an act of objecting or taking exception or a protest.  
It is a pleading by a party to a legal action that assumes the truth of the 
matter alleged by the opposite party and sets up that it is insufficient in law to 
sustain his claim or that there is some other defect on the face of the 
pleadings constituting a legal reason why the opposite party should not be IA 12530/2000 in CS(OS) 1823/2000 Page 11 of 17
allowed to proceed further.  In O.N. Bhatnagar V. Rukibai Narsindas (SCC 
Para 9) it was held that the appellant having raised a plea in the nature of 
demurrer, the question of jurisdiction had to be determined with advertence to 
the allegations contained in the statement of claim made by Respondent under 
Section 91(1) of the Act and those allegations must be taken to be true.  In 
Roop Lal Sathi Vs. Nachhattar Singh Gill (SCC Para 24) it was observed that 
a preliminary objection that the election petition is not in conformity with 
Section 83(1)(a) of the Act i.e. it does not contain the concise statement of the 
material facts on which the petitioner relies, is but a plea in the nature  of 
demurrer and in deciding the question the Court has to assume for this purpose 
that the averments contained in the election petition are true.  Reiterating the 
same principle in  Abdulla Bin Ali V. Galappa it was said that there is no 
denying the fact that the allegations made in the plaint decide the forum and 
the jurisdiction does not depend upon the defence taken by the defendants in 
the written statement.  In Exphar SA V. Eupharma Laboratories Ltd. (SCC 
Para 9) it was ruled that where an objection to the jurisdiction is raised by 
way of demurrer and not at the trial, the objection must proceed on the basis 
that the facts as pleaded by  the initiator of the impugned proceedings are 
true.  The submission in order to succeed must show that granted those facts 
the court does not have the jurisdiction as a matter of law.  In this case the 
decision of the High Court on the point of the jurisdiction was set aside as 
the High Court had examined the written statement filed by the respondents 
in which it was claimed that the goods were not at all sold within the 
territorial jurisdiction of the Delhi High Court and also that Respondent no.2 
did not  carry out business within the jurisdiction of the said High Court.  
Following the same principle in  Indian Mineral & Chemicals Co. V. 
Deutsche Bank (SCC paras 10 and 11), it was observed that the assertions in 
a plaint must be assumed to be true for the purpose of determining whether 
leave is liable to be revoked on the point of demurrer. 
15. The principle underlying clause (d) of Order 7 Rule 11 is no different.  
We will refer here to a recent decision of this Court rendered in Popat and 
Kotecha Property Vs. State Bank of India Staff Assn. where it was held as 
under in para 10 of the report: (SCC p.515).
“10.Clause (d) of Order 7 Rule 7 speaks of suit, as appears 
from the statement in the plaint to be barred by any law.  
Disputed questions cannot be decided at the time of 
considering an application filed under Order 7 Rule 11 IA 12530/2000 in CS(OS) 1823/2000 Page 12 of 17
CPC.  Clause (d) of Rule 11 of Order 7  applies in those 
cases only where the statement made by the plaintiff in the 
plaint, without any doubt or dispute shows that the suit is 
barred by any law in force”.
16. It was emphasized in para 25 of the reports that the statement in the 
plaint without addition or subtraction must show that it is barred by 
any law to attract application of Order 7 Rule 11 CPC. The principle 
is, therefore, well settled that in order to examine whether the plaint is 
barred by any law, as contemplated by Sub-rule (d) of Order VII Rule 
11 CPC, the averments made in the plaint alone have to be seen and 
they have to be assumed to be correct. It is not permissible to look into 
the pleas raised in the written statement or to any piece of evidence. 
Applying the said principle, the plea raised by the contesting 
respondents that the Company Petition was barred by limitation has 
to be examined by looking into the averments made in the Company 
Petition alone and any affidavit filed in reply to the Company Petition 
or the contents of the affidavit filed in support of Company 
Application No. 113 of 1995 filed by the respondents seeking 
dismissal of the Company Petition cannot at all be looked into.”
16.1 As noticed hereinabove, the plaintiffs who are a part of Ram Kishan Sanghi  and
family, have  averred in the plaint that by virtue of partition carried out in 1964, property 
no.3 fell to their share.  It was also their case that the affairs with respect to the said 
property no.3 were looked after by  Shri Hari Kishan Sanghi.  In the plaint, there are 
specific averments to the effect that Shri Hari Kishan Sanghi had obtained signatures of 
Shri Ram Kishan Sanghi and other members of his family on blank documents, papers and 
stamp papers on the pretext that they were required for income tax purposes.  Whether 
these documents included the lease deeds in issue, is a matter which can only be 
ascertained after evidence is led by the parties.  It is well settled execution of documents 
by itself does not establish the veracity of contents of documents. (See Judah vs. Isolyne 
Shrojbashini Bose and Anr. AIR(32) 1945 Privy Council 174 and Ramji Dayawala and 
Sons (P) Ltd. vs. Invest Import (1981) 1 SCC 80  at page 90-91, para 16.  The relevant 
observations being:IA 12530/2000 in CS(OS) 1823/2000 Page 13 of 17
“16…….Undoubtedly, mere proof of the handwriting of a document would not 
tantamount to proof of all the contents or the facts stated in the document.  If 
the truth of the facts stated in a document is in issue mere proof of the 
handwriting and execution of the  document would not furnish evidence of the 
truth of the facts or contents of the document.  The truth or otherwise of the 
facts or contents so stated would have to be proved by admissible evidence, 
i.e. by the evidence of those persons who can vouchsafe for the truth of the 
facts in issue….” 
17. In the instant case  as is evident from the reply filed to the captioned application 
while signatures on the first and second lease deeds dated 22.05.1985 and 09.07.1990 are 
accepted the truth of the contents of the said lease deeds is disputed.  In so far as the third 
lease deed dated 04.01.1995 is concerned what is evident on the bare perusal, is that, while 
Hari Kishan Sanghi has acted on behalf of the landlord, as the attorney for Ramkishan and 
family; on behalf of the applicant RKS i.e., the lessee, the lease is signed by one Neeta 
Khanna.  Evidence will have to be led to vouch safe the truth of the contents of the said 
lease deeds.  Furthermore, notwithstanding the submissions of Mr. Aneja that by virtue of 
Section 92 of Indian Evidence Act, 1872, the plaintiffs cannot lead evidence contrary to 
the contents of documents, it is well settled that evidence can be led  to  explain the 
circumstances in which the documents were executed, or even to show that an agreement 
was executed to create evidence with regard to another matter.  In other words, as in the 
instant case there was no lease created, the document was created only for tax purposes. 
See Raj Satyendra Nath Ray Chaudhury Bahadur Vs. Pramananda Haldar and Ors 164 
Ind Cas 437.  The observations made in paragraph 4, 5 & 6 being relevant are extracted 
below:-
“4……..But under proviso 1 to Section 92, oral evidence is admissible to 
prove the circumstances which would invalidate any such document.  The 
circumstances enumerated in the said proviso, e.g., fraud, etc., are 
illustrative and not exhaustive.  In my opinion the fact that an instrument, 
registered or unregistered, was not intended to be acted upon from the very 
beginning is a fact which comes within proviso 1 and can be proved either by 
direct oral evidence or by indirect or circumstantial evidence furnished by IA 12530/2000 in CS(OS) 1823/2000 Page 14 of 17
the conduct of the parties.  If the cases are examined in this light there is no 
conflict whatsoever……
5.    ….In the case Bini Madhub Gorani V. Labnoii Dassi 6 CWN 242, where 
the defence in a suit for rent based upon a registered kabuliyat, was that the 
kabuliyat was never intended to be acted upon; Rampini, J., sitting singly held 
that oral evidence adduced to sustain the defence was not admissible but on 
Letters Patent Appeal he was overruled by Maclean, C.J., and Macpherson, J. 
Maclean, C.J., observed, firstly, that : 
Evidence would be admissible to show that, as between the landlord 
and the tenant, the document was never intended to be acted upon.
6. The learned Chief Justice further observed (in which observation 
Macpherson, J. also concurred) that evidence would also be admissible “to 
show that there has been, as between the parties to this document, a waiver 
of some of its terms.”  As I shall show later on the last mentioned observation 
only has been taken exception to it later cases and must be held to be not good 
law in view of the decision of the Full Bench in the case of Lalit Mohan Ghost 
Vs. Gopali Chuck Coal Company 39 C 284: 12 Ind. Cas. 723 : 16 CWN 55 : 11 
CLJ 411, but I am not aware of any case of this Court which has either 
dissented from or even cast doubt upon the first mentioned observation of the 
learned Chief Justice.  In the same case Macpherson, J. made the following 
observations:
The defendant in this case does not attempt to give any evidence of an 
oral agreement rescinding or contradicting the contract as to amount of the 
rent payable, but as both the lower Courts have found, he did prove that since 
the time the agreement was entered into he had always paid rent at a lower 
rate than that stated in the agreement.   The evidence was, in my opinion, 
distinctly admissible, not for the purpose of contradicting  the terms of the 
agreement, but for the purpose of showing, as the learned Chief Justice has 
pointed out, that the intention of the parties was, that the agreement was 
from the first not intended to be acted upon.”
17.1 In any event, onus with regard to the lease deeds in issue would rest on the 
applicant / RKS.   As to what would be the effect of not seeking a declaration of Section 
34 of the Specific Relief Act, 1963 will be seen at the stage of final adjudication.  These 
are submissions made at the  bar; there is no reference to them either in the written 
statement or in the captioned application.IA 12530/2000 in CS(OS) 1823/2000 Page 15 of 17
18. This brings me to the first aspect.  As noticed hereinabove, the court by order dated 
24.01.2001 had directed that objections contained in the application under O. VII Rule 11 
CPC should be incorporated in the written statement.  It was only on 16.12.2003 that the 
court held issue no.24, 31, 32 and 33 be tried as preliminary issues.  A bare reading of the 
provisions of Order XIV Rule 2(2) would show  that preliminary issues are those issues 
which can be tried as pure question of law, and pertain to jurisdiction or to bar to the suit 
created by law in force.   Sub-rule (2) of Rule 2 of Order XIV is an exception to sub-rule 
(1) of rule (2) Order XIV which requires the court to try all issues.   Therefore, before a 
Court comes to a conclusion that an issue should be tried as a preliminary issue, it 
ordinarily would assess, as to whether it is a question of law, fact or a mixed question of 
law and fact.  Though, B.N. Kirpal, J. (as he then was) in the case of Mohammad Yasin 
Vs. Abdul Kalam and Anr. 32(1987) DLT 143” has observed that even  “if  some
evidence” is required to be led an issue can be tried as a preliminary issue.  The 
observations of court being relevant are extracted hereinbelow :-
“ I am unable to agree with the contention of the learned counsel for the 
petitioner that the issue of law pertaining to jurisdiction or to the 
maintainability of the suit must be such in which no evidence at all is to be 
recorded.  The expression “issue of law” occurring in sub-rule (2) of Order 
14 Rule 2 is in contra-distinction to the expression “issue of fact”.  Whether 
the court has the jurisdiction to try the suit or may not solely be a question of 
fact.  It may be a question of law or a mixed question of fact and law.  In my 
opinion, even a mixed issue of fact and law, but which pertains to the 
jurisdiction of the court to try the suit, would be covered by Order 14 Rule 
2(2).  The reason for this is obvious.  If the court has no jurisdiction to try the 
suit then its decision on other issues arising in the case would be of no avail.  
If no suit is maintainable then the court would have no jurisdiction to give any 
decision on any other issue arising in the suit.  Order 14 Rule 2 has been 
amended with a view to expedite the trial of the suit.  Previously, all legal 
issues on which the suit could be disposed of  could be tried as preliminary 
issues.  Now a restriction  has been placed by the amendment and the 
restriction is that it is only that preliminary issue pertaining to the jurisdiction 
of the court or the maintainability of the suit which can be tried as a IA 12530/2000 in CS(OS) 1823/2000 Page 16 of 17
preliminary issue.  If  in deciding the jurisdiction of the court or the 
maintainability of the suit some evidence has to be recorded, that does not 
mean that the court would have no jurisdiction to direct such an issue to be 
treated as a preliminary issue. The trial court, therefore, in my opinion, was 
right in coming to the conclusion that the issue with regard to jurisdiction 
would be tried as a preliminary issue.”
(Emphasis is mine)
18.1 However,  if an issue is completely a question of fact, it cannot be tried as a 
preliminary issue.   [See paragraph 13 at page 650 of Ramesh B. Desai (supra)].  The 
relevant observations made in para 13 is extracted hereinbelow:
“13…….. Though there has been a slight amendment in the language of 
Order 14 Rule 2 CPC by the amending Act, 1976 but the principle 
enunciated in the abovequoted decision still holds good and there can be 
no departure from the principle that the Code confers no jurisdiction 
upon the  court to try a suit on mixed issues of law and fact as a 
preliminary issue and where the decision on issue of law depends upon 
decision of fact, it cannot be tried as a preliminary issue.”
19. Whether an issue ought to be tried as preliminary issue is completely in the 
discretion of the trial court.   Furthermore, where the court is of the view, in respect of 
even an issue of jurisdiction; that evidence would be required to be led, it ordinarily would 
not be tried as a preliminary  issue: Shyam Sundar Mohapatra Vs. Janaki Ballav Patnaik 
& Ors. AIR 1990 Orissa 23; Mithlesh Kumari & Ors. Vs. Gaon Sabha Kishanpur & 
Ors. AIR 1999 All. 304; Sidh Nath & Ors. Vs. Distt. Judge Mirzapur & Ors. AIR 2002 
All. 356; Canbank Financial Services Ltd. Vs. V.B. Desai & Anr. AIR 2002 Bom. 247 
and Shoib Ullah & Ors. Vs. Bhartesh Chandra Jain & Anr. AIR 2003 All. 31.   
20. From a conspectus of the facts obtaining in this case, as brought out in the plaint, 
in my view, evidence would be required to be led by parties.  Whether after evidence is 
adduced by parties, the court is in a position to dispose of the suit on the bases of issues 
no.24, 31, 32 and 33 is a matter, which a court could revisit, at that stage.  Given the time 
which has lapsed, in the fitness of things, I deem it fit  to direct parties to lead evidence on IA 12530/2000 in CS(OS) 1823/2000 Page 17 of 17
all issues.  Accordingly, the captioned application is dismissed with observation made 
hereinabove.
21. In view of the above, the captioned application is dismissed.  Needless to say any 
observations made herein will not impact the merits of the case.
CS(OS) 1823/2000
22. List on 19.10.2010 before the Joint Registrar.  The plaintiffs shall file their list of 
witnesses, if not already filed, within two weeks from today alongwith affidavit by way of 
evidence.   The plaintiffs shall ensure the presence of their witnesses for the purposes of 
their examination on the date fixed above.
RAJIV SHAKDHER, J
SEPTEMBER 20, 2010

yg