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Judgment
B.V. Nagarathna, J.—1. Though the appeals are listed for admission, with the consent of learned counsel on both sides, they are heard and disposed of by this common judgment.
These second appeals are filed by the plaintiffs in O.S. No. 525/2003, 526/2003, 527/2003, 559/2003 and 563/2003 assailing the judgments and decrees passed in R.A. No. 144/2006, 146/2006, 154/2006, 145/2006 and 152/2006 by the Principal Civil Judge (Sr. Dn.), Belgaum allowing the said appeals and dismissing the suits filed by the plaintiffs which were decreed by common judgment and decree dated 22.12.2007 by the III Addl. Sr. Civil Judge, Belgaum. These second appeals arise out of the common judgment passed by the first appellate Court, they are connected together and are disposed of by this common judgment.
For the sake of convenience, parties shall be referred to, in terms of their status before the trial Court.
Appellant-plaintiffs filed the aforesaid suits seeking relief of mandatory injunction by directing defendant No. 2, i.e., Belgaum Urban Development Authority (hereinafter ''BUDA'' for short) represented by its Commissioner by directing second defendant-BUDA to execute sale deeds in favour of the plaintiffs pursuant to lease cum sale agreements executed in their favour and in case second defendant fails to execute the sale deeds then to appoint a Court Commissioner for the said purpose. The suit properties are sites bearing Nos. 211, 552, 550, 611 and 561 respectively measuring East-West 40 feet and North to South 60 feet, situated in Scheme No. 13, near race course, Belgaum. That the plaintiffs being in need of residential premises had approached defendant No. 2 and requested for allotment of plots within the limits of the Corporation of Belgaum city. Second defendant agreed to allot the aforesaid sites to the plaintiffs pursuant to the applications made by them and on considering the same. The second defendant had formed residential cum commercial plots in Sector No. 13 near race course, Belgaum and on the applications filed by the plaintiffs for allotment of residential sites, the aforesaid sites were allotted to the respective plaintiffs. Possession of the suit sites were handed over to the plaintiffs. Thereafter lease cum sale agreement was executed by the first defendant before the office of the Sub Registrar, Belgaum in favour of the plaintiffs. Plaintiffs have subsequently put up construction on their respective plots. As per clause 12 of the agreement, the second defendant is bound to execute the sale deeds in respect of the suit sites. According to the plaintiffs, in terms of lease cum sale agreement the plaintiffs have constructed their residential houses on the suit sites and have complied with all the terms and conditions of the lease cum sale agreement. Even after lapse of 10 years from the date of execution of the lease cum sale deeds and grant of possession in respect of the suit properties to each of the plaintiffs by the second defendant, sale deeds have not been executed despite several requests and representations made by the plaintiffs. In the circumstances, the plaintiffs got issued legal notices dated 05.09.2002 through their counsel. Even on receipt of said notices, second defendant did not take any steps to execute the sale deed and reminder notices issued on 23.10.2002 have also remained futile. Once again reminders were issued through their counsel on 04.06.2003 but the second defendant did not respond to these requests. As Section 64 of the BUDA Act had been complied, by issuance of the statutory notices plaintiffs filed the aforementioned suits seeking execution of the sale deeds in their names in respect of the suit sites which have been allotted to them.
On receipt of suit summons and Court notices the defendants appeared through their counsel. Defendant No. 2 filed a detailed written statement but defendant No. 1 did not file any written statement. While denying the plaint averments defendant No. 2 has stated that plaintiffs have not issued statutory notices to the defendant before filing the suits. Legal notices are dated 05.09.2002 and the reminders are dated 23.10.2002 which are not the statutory notices within the meaning of Sec. 64 of the aforesaid Act. Therefore, the suits are barred in law and the plaints are liable to be rejected under Order VII Rule 11 of the CPC on account of non compliance of Sec. 64 of the Act. That apart, the second defendant has developed various residential schemes within the limits of the Corporation of Belgaum City and it''s adjoining urban areas. That in Scheme No. 13 on acquisition of land from various persons of Belgaum and Kangralli village, layout was formed and it is in that layout that the sites have been allotted to the plaintiffs. That the land owners not being satisfied with the award of compensation on the acquired land had filed applications U/S. 18 of the Land Acquisition Act, 1894, seeking enhancement of compensation. The reference Court enhanced the market value at Rs. 9,000/-, 15,000/- and Rs. 18,000/- per acre respectively along with other statutory benefits. As a result, second defendant was liable to pay enhanced compensation to the erstwhile land owners in Scheme No. 13. At a meeting held on 09.10.1997 by the second respondent, it was resolved that the amounts to pay the enhanced compensation must be recovered by way of additional costs from the allottees. Therefore, under condition No. 9 in the lease cum sale agreement and as per the condition of the allotment letter, notices were issued to all allottees including the present plaintiffs to deposit additional cost of the sites. In response to the said notices a large number of allottees have deposited the enhanced amount but it is only the present plaintiffs who have not deposited the amount and have violated the terms and conditions of the lease cum sale agreement. Therefore, plaintiffs without performing their part of contract could not have approached the Court to seek relief against the second defendant. It is further contended that as per the allotment letter and terms and conditions of the lease cum sale agreement, plaintiffs were bound to pay additional cost for acquisition of the land in which sites have been allotted to the plaintiffs. In the absence of making the above payment plaintiffs could not have approached the Court seeking relief against defendant No. 2. Further, it is averred that the plaintiffs are only lessees and second defendant has every right to issue directions to the plaintiffs and they are under an obligation to comply with the direction. In the absence of there being compliance on the part of the plaintiffs in respect of any direction issued by the second defendant, plaintiffs are barred from seeking any relief at the hands of this Court. At any rate, plaintiffs could not have filed suits seeking a decree of mandatory injunction against the defendant No. 2. They could have sought decree of specific performance. Therefore, filing of the suits itself is not appropriate. In view of the above, second defendant sought for dismissal of the suits.
On the basis of the rival pleadings, the trial Court framed the following common issues in all the suits.
ISSUES
Whether the plaintiff proves that as per the terms and conditions at sl. No. 12 of Lease-cum-Sale Agreement, the defendant No. 2 is bound to execute the sale deed in respect of the suit property?
Whether the Defendant No. 2 proves that the plaintiff has not complied the terms and conditions stipulated in Lease-cum-Sale Agreement?
Whether the Defendant No. 2 proves that, in absence of statutory notice under section 64 of the KUD Act, this suit is barred by law?
Whether the Defendant No. 2 proves that, he has issued notice under condition No. 9 of the Lease-cum-Sale Agreement to the plaintiff?
Whether the plaintiff is entitled for relief of mandatory injunction against the defendants?
What order or decree?
In support of their case the plaintiffs let in their evidence and got their respective documents marked as exhibits. Second defendant let in the evidence of one witness as DW 1 and they produced 27 documents, which were marked as Exs. D. 1 to 27. On the basis of the said evidence the trial Court answered issue Nos. 1, 4 and 5 in the affirmative, issue No. 2 in the negative and issue No. 3 as not surviving for consideration and decreed the suits, directing the second defendant to execute sale deeds in favour of the plaintiffs within two months from the date of the said judgments. Plaintiffs were directed to pay registration charges.
Being aggrieved by the common judgment and decree of the trial Court dated 24.03.2006 passed in the aforesaid suits, second defendant preferred R.A. Nos. 144/2006 to 155/2006 before the first appellate Court, which on hearing the respective parties framed the following points for its consideration.
POINTS
Whether the respondents-plaintiffs have proved that though they have complied with all the terms and conditions stipulated in the respective Lease-cum-Sale Agreements, the appellant-defendant No. 2 has failed to execute the registered sale deeds in their favour?
Whether the judgment and decree passed by trial Court in all the suits is against the judicial principles and due to perverse and arbitrary exercise of discretion?
What order or decree?
It answered point No. 1 in the negative and point No. 2 in the affirmative and allowed the appeals, by setting aside the common judgment and decree of the trial Court and consequently dismissed the suits. Being aggrieved by the judgment and decree of the first appellate Court the plaintiffs have preferred these second appeals.
I have heard learned counsel for the appellants, learned Govt. Pleader for respondent No. 1 and learned counsel for the respondent No. 2 and perused the material on record and also the original records.
It is contended on behalf of the appellants that the first appellate Court was not right in dismissing the suits filed by the plaintiffs when they had paid the entire consideration amount with regard to their respective sites. It is only on that basis, lease cum sale agreement were executed in their favour, they have been in possession of their respective sites and they have put up construction on the said sites and are residing therein. All terms and conditions of the allotment letter and lease cum sale agreement had been adhered to by the plaintiffs, there was nothing more to be done by them. It was for the second defendant to execute the sale deeds in their favour on the lapse of a period of ten years of lease cum sale agreement but the second defendant failed to do so, inspite of several requests and reminders being made to them. Instead the second defendant demanded an additional amount towards the sital value which, the plaintiffs were not liable to pay. As the second defendant did not come forward to execute the sale deed cum agreement in favour of the plaintiffs, they were constrained to file their respective suits. The trial Court rightly decreed the suits but the first appellate Court has dismissed the suits on irrelevant considerations. He contended that the enhancement of compensation paid by the second defendant to the land owners has nothing to do with the sital value that is to be paid by the plaintiffs to the second defendant. Plaintiffs are allottees from the second defendant, the obligation to pay compensation to the erstwhile land owners is on the second defendant. Merely because compensation amount was enhanced by the Courts that burden of payment could not have been shifted on the plaintiffs. He submitted that when the sital value was fixed at Rs. 50,000/- and another Rs. 5,000/- was fixed as the water supply charges, which is 10% of the sital value, totalling Rs. 55,000/- and the said amount had been paid by the plaintiffs, the only thing that remained was for the second defendant to execute the sale deed in the names of the plaintiffs. When the second defendant failed to do so the plaintiffs approached the trial Court which rightly decreed the suit but the first appellate Court was not right in setting aside the judgment of the trial Court and dismissing the suits. He, therefore submits that substantial question of law would arise in these appeals which require admission for a detailed hearing of the matter.
Per contra, learned counsel for the respondent No. 2 supporting the judgment and decree of the first appellate Court contended that the sital value was not fixed at all. The value of the site was Rs. 50,000/-. 10% of the said amount was for the augmentation of the water supply charges, which is Rs. 5,000/-. The said amount was fixed tentatively. No doubt plaintiffs had paid the said amounts on the allotments having been made to them. On the allotment of sites and payment of the sital value possession of the sites had been given to the plaintiffs; lease cum sale agreements had been executed in their favour. But, until the enhanced sital value had been paid by them, plaintiffs were not entitled for registration of lease deed in their names. Learned counsel contended that, all other allottees have paid the enhanced sital value of Rs. 59,500/-, but it is only these appellants who are resisting to pay. He also contended that the first appellate Court was right in taking note of the escalation in the compensation to be paid by the second defendant to the erstwhile owner in scheme No. 13 in which scheme allotment has been made to the appellant and thereby dismissed the suits and directing the appellants to pay balance amount. Reliance was also placed on certain orders passed by this Court in Writ Petitions and a judgment of the Hon''ble Supreme Court in the case of Shimla Development Authority Vs. Asha Rani reported in , (1996) 8 SCC 487. He therefore contended that no substantial question of law arises in these appeals and there is no merit in the appeal and the same may be dismissed in limine.
Having heard learned counsel for the parties at length and on perusal of the material on record as well as the original records, in my opinion, the appeals are required to be admitted to consider the following substantial question of law:
Whether the first appellate Court was justified in dismissing the suit of the plaintiffs on the premise that the plaintiffs had committed breach of contract, by not paying the additional sital value, as stipulated in lease cum sale agreement-Ex. P. 2?
The undisputed facts of the case are that the plaintiffs had made applications to the second defendant for allotment of residential site. The second defendant on considering the said applications had allotted a site to each of the plaintiffs and the allotment letters have been produced by the second defendant and marked as Ex. D1, D3, D5, D9 and D17 respectively. Thereafter Ex. P. 1 and Ex. P. 2 series agreements were executed by the second defendant in favour of each of the plaintiffs. They are lease cum sale deeds executed in favour of the plaintiffs herein pursuant to receipt of the sital value and water supply charges stated to be totally Rs. 55,000/-, as per the allotment letters. Possession of the respective sites were handed over to the plaintiffs. Thereafter, lease cum sale agreement were entered into in the names of the respective plaintiffs.
Learned counsel for respondent No. 2 herein has placed reliance on the expression "tentatively" in Ex. D. 1 series to contend that the sital value was fixed tentatively at the time of allotment of site and the said sital value was subject to enhancement. In this regard he placed reliance on Clause-9 of the lease cum sale agreement, Ex. P. 2 and other similar documents to contend that the second defendant as the lessor, was entitled to give direction to the lessee or purchaser who, on carrying out the said direction would be entitled to the sale deed in his or her favour and if the directions were not complied with, it could be construed as breach of condition of lease cum sale agreement. In the aforesaid context it is contended, that pursuant to the enhancement of compensation awarded to the land owners by the Courts burden had to be borne by the second defendant, the same being shifted on to the allottees as the allotments were in respect of the lands which had been acquired which was now subjected to enhanced compensation, therefore, notices were issued to the plaintiffs to pay additional sital value of Rs. 59,504/-. It was in the aforesaid context that the learned counsel for the second respondent placed reliance on the orders passed by this Court as well as the judgment of the Hon''ble Apex Court with regard to the enhanced sital value.
Ex. D. 1 series is the allotment letter issued to the plaintiffs. Clause 1 to 5 and the clause dealing with the value of the site are extracted as under, for immediate reference.
1) You have to deposit 12 1/2% of the site value shown in Col. 4 below within a period of 15 days from the date of receipt of this communication, to make up 25% of site value. At the same time you must file an affidavit on Stamp Paper of Rs. 10/- in the prescribed form which is enclosed. If no such payment is made and the affidavit is not filed within the said period, the allottee shall be deemed to have declined the allotment.
2) The balance value of 75% of the site, has to be deposited by you within a period of 90 days from the date of receipt of this allotment order, failing which the allotment will be cancelled.
3) Interest at 18% or as applicable shall be levied on the balance amount for the extended period. If the said amount is not paid within the period of 90 days or the extended period, the Earnest Money paid by you will be forfeited and the allotment of site will be cancelled without giving further notice.
4) On payment of the value of the site you will have to execute the lease-cum-sale agreement within forty-five (45) days embodying the conditions subject to which the site is allotted to you. You will thereafter be put in possessions of the site on lease for 10 years. Lease forms may be obtained from this office.
5) The dimensions noted are approximate subject to verification at the time of handing over possession and allottees will have to pay proportionate increase price according to actual measurements.
On a conjoint reading of the said clauses it is noted that the sital value was determined at Rs. 50,000/- and 12 1/2% of that value had to be paid within a period of 15 days from the date of receipt of the allotment letter to make up 25% of the sital value as initial 12 1/2% was received at the time of receipt of application for allotment of site from the intending allottee. Balance 75% of the sital value was to be paid within the period of 90 days from the date of receipt of allotment order, failing which, the allotment was to be cancelled. Of course clause No. 3 deals with levy of interest for delayed payment and on the payment of the value of the site, lease cum sale agreement was to be executed, embodying condition subject to which the site was allotted, the allottee was to be put in possession for 10 years initially and thereafter a sale deed was to be executed by defendant No. 2. In the instant case it is only on compliance of the aforesaid terms and conditions that the second defendant handed over possession of the suit sites to the respective plaintiffs and thereafter lease cum sale agreements were entered into with the plaintiffs. Though the expression "tentatively" has been used in the allotment letters, in reality the second defendant had accepted Rs. 50,000/- to be the sital value and, on being satisfied of the said amount being paid by the plaintiffs herein executed lease cum sale agreement by handing over possession of the respective sites to the plaintiffs herein. The allotment letters were issued in the year 1990 (12.11.1990), lease cum sale agreements were executed in the year 1991 in favour of each of the plaintiffs.
Clauses 9 and 15 of the lease cum sale agreement read as under:
On matters not specifically stipulated in these presents the Lessor/Vendor shall be entitled to give directions to the Lessee/Purchaser which the Lessee/Purchaser shall carry out and default in carrying out such directions will be a breach of conditions of these presents.
It is also agreed between the parties hereto that Rs. 50,000/- (Rupees fifty thousand only) in the hands of the Lessor/Vendor received by them from the Lessee/Purchaser shall be held by them as security for any loss or expense that the Lessor/Vendor may be put to in connection with any legal proceedings including eviction proceedings that may be taken against the Lessee/Purchaser and all such expenses shall be appropriated by the Lessor/Vendor from and out of the moneys of the Lessee/Purchaser held in their hands.
On a conjoint reading of those clauses all that emerges is the fact that any direction issued to the allottee or intending purchaser must be carried out or it would be considered to be a breach of the conditions. In clause 15 it is stated that Rs. 50,000/- which has been received is to be held as security for any loss or expenses, even that may be used in connection with any legal proceeding, etc.
Thus the interpretation that could be given to clause No. 15 is that, in case any legal complication arose with regard to the allotment of site, then the sital value would ultimately be forfeited and utilized for legal expenses, etc. Clause 9 r/w. Clause 15 have been interpreted by the second defendant to imply that it could enhance the sital value at the time of execution of the sale deed. But, nowhere in these documents is any reference made to there being any enhancement in the sital value on account of the enhancement of compensation to be paid to the erstwhile land owners from whom land was to be acquired for the purpose of formation of house sites to be allotted to applicants who had applied to the second defendant for allotment of residential sites. Therefore, the notices issued by the second defendant to the plaintiffs seeking payment of additional sital value to an extent of Rs. 59,504/- as per Ex. D. 2, 4, 6, 10 and 18 respectively to the plaintiffs herein as demand notices were rightly not given effect to by the trial Court and the suits of the plaintiffs were decreed directing the second defendant to execute the sale deeds. But the first appellate Court has placed great reliance on Ex. D. 25, 26 and 27, in order to justify enhancement of sital value made by the second defendant on the plaintiffs. It may be that the compensation with regard to the acquired lands was enhanced by the Courts and there was additional financial burden placed on the second defendant to pay enhanced compensation to the land owners. But in the absence of there being any reference to that aspect in Ex. D. 1, 3, 5, 9 and 17 respectively, the allotment letters or in Ex. P. 1 and Ex. P. 2 lease cum sale deeds, the second defendant had no right or authority to demand additional sital value from the plaintiffs prior to execution of sale deeds in their favour. This becomes apparent on the conjoint reading of the allotment letters and the lease cum sale deeds referred to above.
Reliance placed on the orders passed by this Court in writ petitions and also on the judgment of the Hon''ble Supreme Court, are of no assistance to the second defendant having regard to the specific clauses in the allotment letters and the lease cum sale agreements in the instant case. Therefore, the first appellate Court was not right in setting aside the judgment and decree of the trial Court and dismissing the suits of the plaintiffs.
In the circumstances, the substantial question of law is answered in favour of the appellants. In the result, the judgment and decree of the first appellate Court in R.A. Nos. 144/2006, 146/2006, 154/2006, 145/2006 and 152/2006 are hereby set aside. The appeals are allowed in the aforesaid terms.
At this stage, learned counsel for the second respondent submits that appellants in R.S.A. No. 759/2008 and R.S.A. No. 760/2008 have deposited the additional sital value and consequently sale deeds have been executed in their name. Since they have succeeded in these appeals, second respondent is directed to refund the additional sital value paid by them within a period of one month from the date of receipt of the certified copy of this judgment.
Insofar as the other appellants are concerned, the second respondent is directed to execute the sale deed in the name of those appellants within a period of two months from the date of receipt of the certified copy of this judgment, if the sale deeds have not yet been executed. It is, however, clarified that if any of the appellants herein have got the sale deed executed in their favour by payment of additional sital value, then they are entitled to refund of the same within a period of one month the date of receipt of the certified copy of this judgment.
Parties to bear their respective costs.