Aravalli Flat Owners Association vs Dharamchand

Sanjay Kishan Kaul, C.J.—Admit. Learned counsel for respondents accept notice.

At request of the learned counsel for the parties, these appeals are taken up for final disposal.

A suit came to be filed on the original side of this Court by the appellant before us, being the Aravalli Flat Owners Association, against the fourth respondent as Builder and the first respondent as Attorney Holder of the second and third respondents, who are owners of the property, on account of they having booked flats and yet the respondents seeking to cancel the transaction, affecting their rights in the flats. The appellant - Association claimed their undivided share in the land, where the flats were constructed by the fourth respondent. It appears that the fourth respondent had undergone some trouble and as a sequitur to that, the first respondent, as attorney, sought to cancel the original agreement dated 18.12.2000. It is also the case of the appellant in the suit that they, in fact, had to recover a sum of Rs.2,21,18,319/- on account of the transaction in question and the development thereafter inter se the parties.

Learned Single Judge passed an injunctive order on the interlocutory application on 27.07.2007 calling upon the first three respondents herein to deposit that amount and the fourth respondent before us to execute necessary loan documents, including promissory note and assignment deed. Certain other terms were also laid out. This order forms subject matter of the appeal in O.S.A. No. 296 of 2007. In those proceedings, the main suit itself came to be disposed of in the following terms:

The first defendant shall execute necessary loan documents and the same shall include a demand promissory note and an assignment of whatever rights they have over the property in Perambur and Mogappair West, as described in Schedule I mentioned below, in favour of the second defendant subject to the charge that ICICI and SBI Indore have over the said properties within a period of four weeks from today.

On execution of the above documents, the second defendant shall arrange finance to pay the members of the plaintiff association individually as per Schedule II mentioned below totalling to a sum of Rs.2,21,18,319/-. Defendant Nos. 3 and 4 shall not alienate the suit property till the individual members are paid off. The members of the plaintiff on realization of the above sum as per the Annexure II would have no right, title or interest in the suit schedule property;

The members of the plaintiff association on receipt of the payment shall immediately withdraw the pending complaints/petitions against defendants No. 2, 3 and 4 before the State Consumer Disputes Redressal Commission at Madras and reserve their right to claim interest and costs only against the first defendant.

The amount stated in clause (2) above has to be paid to the individual members of the plaintiff association within a period of two months from today. If the amount is not paid within the time granted, it will carry interest at 9 percent per annum.

The quibble between the parties did not cease thereafter, as an issue arose about the documents to be executed by the fourth respondent in favour of the first three respondents, with the result that the payment came to be delayed to the appellant. The appellant thus claims interest and it is the say of the appellant that such interest is payable in terms of the compromise decree extracted aforesaid. Simultaneously, the stand of the fourth respondent was that they had complied with their obligation and executed the documents, which had been filed in Court and they should be discharged from their obligation. On the other hand, the stand of the first three respondents was that the documents executed by the fourth respondent were not in order and the delay had been caused on account of the conduct of the fourth respondent.

For purposes of deciding the present lis, it would be suffice to say that in an appeal carried before the learned single Judge from the order of the Master by the fourth respondent in terms of the order dated 06.09.2011, the learned single Judge opined that the loan documents and the demand promissory note already executed by the fourth respondent herein, as also deed of assignment, and filed before the Court on 11.04.2011, were to be taken as sufficient compliance under the decree. In the said order, it was also observed that the first respondent herein had been apparently picking holes in the documents sought to be executed by the fourth respondent and putting the blame on them for non performance of his obligations. Referring to the tone and tenor of the counter and the additional counter affidavits of the first three respondents herein, it was stated that the same gave a clear signal to the effect that irrespective of the language employed and the manner of execution of all necessary documents by the fourth respondent as per the decree dated 13.02.2008, the first respondent will not accept it. This order of the learned single Judge was assailed in appeal by the first three respondents being O.S.A. No. 389 of 2011, which was decided on 17.10.2012. The order of the learned single Judge was affirmed. The result of the aforesaid is that there is a finding about the fourth respondent having complied with its obligations and seeking to put the blame on the first three respondents for rejecting the proposed documents to be executed by the fourth respondent on one pretext or the other.

It is the case of the first three respondents that the amount, which was liable to be paid to the appellant has been so paid along with interest, but the interest has been calculated from 11.4.2011, when the documents came to be filed in Court. On the other hand, the appellant wanted interest even for the prior period based on the decree. This request of the appellant was rejected in terms of the impugned order of the learned single Judge dated 04.12.2013, which is assailed before us.

We have heard the learned counsel for the parties.

In order to appreciate the rival contentions of the parties, one would have to turn to the decree, which has actually been passed and extracted aforesaid, as also the judicial orders passed thereafter. Clause (1) of the decree clearly stipulates the requirement of execution of necessary loan documents by the fourth respondent. Clause (2) thereafter begins with ''On execution of the above documents''. The effect is that the liability of the first three respondents to pay the amount would only arise on execution of the documents by the fourth respondent. Clause (3) refers to the proceedings before the State Consumer Disputes Redressal Commission and makes it clear that the complaints/petitions pending there against the first three respondents would be withdrawn and if any interest and costs were claimed, the same would be against the fourth respondent. Clause (4) is however relatable to Clause (2) i.e. the obligation of the first three respondents to pay the amount to the appellant and prescribes the period of two months from the date of the order, failing which, it would carry interest @ 9% per annum.

It is not in doubt that the amount was not paid within the period of two months, but, it was paid taking the cut off date as 11.4.2011, i.e. the date on which the documents were filed by the fourth respondent in Court. It is, in this context, we had observed on the last date of hearing that we were not in a position to doubt the entitlement of the appellant to receive interest, but the obligation to be performed by the first three respondents on the one hand and the fourth respondent on the other hand would have to be taken into account. Clause (3) dealing with the right to claim interest only against the fourth respondent by the appellant had nothing to do with this matter in issue, as that was relatable to the proceedings before the State Consumer Disputes Redressal Commission. The liability to pay interest was on the first three respondents as per Clause (4) for any delay, but subject to the same having read in the context of Clause (2), which required the fourth respondent to execute the documents in favour of the first three respondents. Thus, if the documents were executed as advised under the decree, the interest for the delayed period had to be borne by the first three respondents. On the other hand, if the fault could be laid at the door of the fourth respondent, then the consequences may be otherwise.

The order passed by the learned single Judge on 06.09.2011 in the suit on applications filed by the fourth respondent against order of the Master, ordering arrest, as well as on execution petition and that order having been confirmed by the Division Bench in O.S.A. No. 389 of 2011 on 17.10.2012, we are of the view that the subject issue remains no more res integra. The findings have been discussed before us, which are quite categoric. In a nutshell, the findings are that the fourth respondent did what is required to be done, but, it is the first three respondents, who made some excuse or the other, not to accept the documents. The blame is thus clearly laid at the door of the first three respondents and in the present proceedings, we are not to traverse over those findings or reappraise the facts again. The first three respondents having suffered those orders, they have no other choice except to make payment for the delay in execution of the documents and consequently for the delay in making payment to the appellant.

We are thus unequivocally of the view that it is the first three respondents, who have to pay interest even for the earlier period i.e. once two months'' time lapse from the date of the decree of 13.02.2008, which would require to pay the amount on or before 13.4.2008. The cut off date for payment of interest should not be taken as 11.4.2011.

The impugned order dated 04.12.2013 of the learned single Judge is thus set aside and we direct the first three respondents to make payment of the balance amount of interest to the appellant within a maximum period of three months from today.

These appeals accordingly stand allowed, leaving the parties to bear their own costs.

Needless to say that this would amount to restitution of the execution petition, if the payment is not made aforesaid.