Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment Reserved on : February 02, 2016
% Judgment Delivered on : February 08, 2016
+ FAO(OS) 364/2015
KAMLENDRA SINH ..... Appellant
Represented by: Mr.Harish Malhotra, Sr.Advocate
instructed by Mr.Vijay K.Singh and
Mr.Nilava Bandyopadhyay,
Advocates
versus
SANGHI BROS (INDOR) LTD.& ANR ..... Respondents
Represented by: Mr.Jayant Bhushan, Sr.Advocate
instructed by Mr.Atul Shanker
Mathur, Ms.Nimita Kaul, Mr.Vivek
Mathur and Ms.Sweta Singh,
Advocates.
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MS. JUSTICE MUKTA GUPTA
PRADEEP NANDRAJOG, J.
1. On December 02, 1998 a Memorandum of Understanding was
executed between Sanghi Bros (Indore) Pvt.Ltd. and Kamlendra Sinh. As
per the recitals thereof, Surendra Sinhji of Alirajpur, the elder brother of
Kamlendra Sinh owned a large number of properties including A-9/29,
Vasant Vihar, New Delhi. Surendra Sinhji died in the intervening night of
th th
29 and 30 March, 1996 leaving behind a will dated November 05, 1984
as per which 55% share in the property at Vasant Vihar was bequeathed to
FAO(OS) 364/2015 Page 1 of 8
Kamlendra Singh and the remaining 45% to other persons. The recitals
record that Kamlendra Sinh had applied for the will to be probated to which
there was opposition by one Jyoti Rathore who claimed that a day prior to
his death Surendra Sinhji had executed a will, probate whereof she had
sought. The recitals further record that Kamlendra Sinh lacked resources to
maintain the properties of his elder brother and had requested Sanghi Bros
(Indore) Pvt.Ltd to incur expenditure in the upkeep of the properties and
being unable to repay the same had proposed to transfer his interest in the
property at Vasant Vihar for consideration and upon the terms and
conditions recorded in the memorandum.
2. With the aforesaid recitals, vide clause-1 of the MOU it was recorded
that Kamlendra Sinh had agreed to sell his interest acquired under the will
dated November 05, 1994 from his brother in house No.A-9/29, Vasant
Vihar, New Delhi in favour of Sanghi Bros (Indore) Pvt.Ltd. Vide clause-2
the agreed sale consideration was mentioned at ` 2.5 crores. Vide clause-3 it
was recorded that Sanghi Bros (Indore) Pvt.Ltd shall continue to pay such
money as would be needed to preserve the said property to be adjusted
against the sale consideration. Vide clause-4 it was recorded that the Sanghi
Bros (Indore) Pvt.Ltd shall pay to Kamlendra Sinh ` 15,000/- as
remuneration to act as a consultant and that said money would be treated as
consideration in the event the property is acquired by Kamlendra Sinh.
Vide clause-5 it was recorded that for renovation and maintenance of the
said property Sanghi Bros (Indore) Pvt.Ltd shall pay money to Kamlendra
Sinh. Vide clause-6 it was recorded that Sanghi Bros (Indore) Pvt.Ltd shall
help Kamlendra Sinh in pursing the probate petition and money paid would
FAO(OS) 364/2015 Page 2 of 8
be treated as part sale consideration. Vide clause-7 it was recorded that a
Special Power of Attorney shall be executed by Kamlendra Sinh in favour of
Sharad Kumar Sanghi to deal with the said property. Vide clause-8
Kamlendra Sinh agreed not to sell, mortgage, gift or transfer any property
belonging to him or comprised in the estate of his elder brother including the
residential house at Vasant Vihar. Vide clause-9 it was agreed that
Kamlendra Sinh shall identify a property of his own or out of his entitlement
to the satisfaction of the company as security in favour of the company.
Vide clause-10 it was agreed that Kamlendra Sinh shall execute a lease or a
deed of assignment/transfer/sale with respect to the property at Vasant Vihar
to convey the interest in favour of the Sanghi Bros (Indore) Pvt.Ltd. Vide
clause-11 it was agreed that the Sanghi Bros (Indore) Pvt.Ltd shall charge
and debit all monies paid to Kamlendra Sinh on account of the said property
towards taxes, maintenance, repairs, security, insurance etc. Vide clause-12
it was agreed that in the event the Sanghi Bros (Indore) Pvt.Ltd takes
possession of the said property under orders of the Court or under any
arrangement, rent paid or expenses incurred by the company shall be treated
as part of the sale consideration. Vide clause-13 it was agreed that as and
when Kamlendra Sinh realises his interest in the said property he shall
execute a conveyance deed and at that stage the remaining amount shall be
paid by Sanghi Bros (Indore) Pvt.Ltd to him. Vide clause-14 it was agreed
that Kamlendra Sinh may negotiate, settle or acquire any interest of the
beneficiary in the said property. Vide clause-15 it was agreed that
Kamlendra Sinh would execute further documents required to give effect to
clauses-10 and 13. Vide clause -16 it was agreed that if Kamlendra Sinh
FAO(OS) 364/2015 Page 3 of 8
failed to acquire any interest in the property the company would be entitled
to realize all the loans and amount paid to Surendra Sinhji by recourse to the
properties of Kamlendra Sinh. Vide clause-17 it was agreed that Kamlendra
Sinh would obtain necessary permission to convey title to Sanghi Bros
(Indore) Pvt.Ltd. Vide clause-18 it was stipulated :-
“That in the event of any party avoiding the obligation
under the Memorandum of Understanding the other party
shall have the right to compel him to perform under the
Specific Relief Act.”
3. Vide clause-21 it was stipulated:-
“That this agreement shall remain valid until it is cancelled
by the parties or at the instance of either party giving three
months notice, provided however, that the parties shall
review the agreement after every year”
4. In May 2004 the Sanghi Bros (Indore) Pvt.Ltd filed a suit seeking
specific performance of the Memorandum of Understanding pleading that
Kamlendra Sinh had intimated his intention to resile the Memorandum of
Understanding in May 2003. Alternative prayer made was to pass a decree
in sum of ` 20,79,049/- statedly paid from time to time to Kamlendra Sinh.
5. Admitting having executed the Memorandum of Understanding dated
December 02, 1998, Kamlendra Sinh pleaded he being a victim of
misrepresentation and inducement. He denied having received ` 20,79,049/-
but admitted certain payments received by him. Necessary would it be to
highlight that he did not raise the plea that in view of clause-21 of the
agreement, the same being determinable, no specific performance would lie
in view of Section 14(1)(c) of the Specific Relief Act.
FAO(OS) 364/2015 Page 4 of 8
6. Kamlendra Sinh filed IA No.3744/2005 praying for the rejection of
the plaint on the ground that the Memorandum of Understanding was
voidable at his option and for which he relied upon clause-21 of the
agreement.
7. With reference to clause-18, contents whereof we have reproduced
hereinabove, and various other clauses, vide order dated February 02, 2006
a learned Single Judge this Court held that in the face of clause-18 it cannot
be said that the contract is determinable.
8. Said order has attained finality.
9. Therefore, Surendera Sinhji cannot reurged at this stage the issue of
the contract being determinable and hence incapable of specific
performance.
10. It is in the aforesaid backdrop we need to consider the legality of the
impugned order dated April 27, 2015, which has restrained Kamlendra Sinh
from encumbering, apart from the suit property even other properties in
which he has an interest, and for which we would highlight that it is clause-
8 of the Memorandum of Understanding which has been used against him.
The learned Single Judge has highlighted said clause.
11. Whilst it may be true that the suit seeks specific performance of the
Memorandum of Understanding concerning property at Vasant Vihar but at
the same time it cannot be ignored that there is a prayer made in the suit to
restrain Kamlendra Sinh from encumbering other properties in which he has
been conferred a benefit by his elder brother as per the will dated November
05, 1984.
12. A perusal of the Memorandum of Understanding arrived at between
FAO(OS) 364/2015 Page 5 of 8
the parties, contents whereof we have briefly summarized hereinabove,
evinces that the parties are conscious of the fact that Kamlendra Sinh may
or may not perfect title to the suit property. Aware of the fact that
Kamlendra Sinh was to receive money from Sanghi Bros (Indore) Pvt.Ltd
for not only the repair, maintenance and upkeep of the suit property but
even other properties left behind by his elder brother Surendra Sinhji, the
agreement, envisaging that Surendra Sinhji may ultimately lose the battle
with Jyoti Rathore, has provided for a security in the form of personal
properties of Kamlendra Sinh being available to satisfy the return of such
monies which Sanghi Bros (Indore) Pvt.Ltd has advanced from time to time
to Surendra Sinhji.
13. Thus, the argument of learned senior counsel for Surendra Sinhji that
since the suit sought specific performance concerning the property at Vasant
Vihar therefore personal properties of Surendra Sinhji could not be the
subject matter of a restraint order is to be reject, and we do so.
14. The conduct of Kamledra Sinh also justifies the impugned order.
Notwithstanding he being under a restraint order to create any right, title or
interest in the property at Vasant Vihar, he appointed an attorney who
negotiated the sale of the property and on behalf of Kamlendra Sinh even
executed a sale-deed. The sale-deed was thereafter presented for registration
before the Sub-Registrar and it required a judicial order for the Sub-Register
not to register the sale-deed. In this connection we may note that on January
31, 2005 Kamlendra Sinh was directed not to create any third party interest
in the property at Vasant Vihar and this order was confirmed on January 22,
2008. In violation thereof Kamlendra Sinh is alleged to have executed an
FAO(OS) 364/2015 Page 6 of 8
agreement to sell on February 04, 2011 to sell to the vendee his interest in
the property at Vasant Vihar acknowledging Rs.4.5 crores. In spite of
various orders passed he did not produce the agreement to sell in the Court.
Sanghi Bros (Indore) Pvt.Ltd learnt about the same and filed IA
No.1564/2012 pleading that Kamlendra Sinh had executed an agreement to
sell concerning his share in the property at Vasant Vihar to which in the
reply filed Kamlendra Sinh positively stated that he had not created any
third party interest. He pleaded that without substantiating the nature of the
documents executed by him it could not be alleged that he had violated the
order dated January 22, 2008. In para 14 of the reply Kamlendra Sinh very
cleverly pleaded that being an old man he had executed some documents
with regard to the maintenance of the property. He denied having executed
the agreement to sell dated February 04, 2011. But to his misfortune,
Sanghi Bros (Indore) Pvt.Ltd managed to obtain a certified copy thereof
because the document was registered. Not only that. Through his attorney,
Kamlendra Sinh presented for registration a sale-deed in favour of one
R.C.Aggarwal and this required judicial intervention once again by Sanghi
Bros (Indore) Pvt.Ltd which had to file another interim application in which
on August 30, 2012 the Court had to direct the Sub-Registrar to forward the
documents for registration by the attorney of Kamlendra Sinh pertaining to
the property at Vasant Vihar. It is also relevant to note that that firstly
Kamlendra Sinh inducted R.C.Aggarwal as a licencee in the property at
Vasant Vihar and thereafter has proceeded to present for registration a sale-
deed concerning the property at Vasant Vihar in the name of a company of
which R.C.Aggarwal is a Managing Director.
FAO(OS) 364/2015 Page 7 of 8
15. We therefore find no merit in the appeal and specially keeping in view
the conduct of Kamlendra Sinh.
16. The appeal is dismissed but without any order as to costs.
(PRADEEP NANDRAJOG)
JUDGE
(MUKTA GUPTA)
JUDGE
FEBRUARY 08, 2016
skb
FAO(OS) 364/2015 Page 8 of 8
Judgment Reserved on : February 02, 2016
% Judgment Delivered on : February 08, 2016
+ FAO(OS) 364/2015
KAMLENDRA SINH ..... Appellant
Represented by: Mr.Harish Malhotra, Sr.Advocate
instructed by Mr.Vijay K.Singh and
Mr.Nilava Bandyopadhyay,
Advocates
versus
SANGHI BROS (INDOR) LTD.& ANR ..... Respondents
Represented by: Mr.Jayant Bhushan, Sr.Advocate
instructed by Mr.Atul Shanker
Mathur, Ms.Nimita Kaul, Mr.Vivek
Mathur and Ms.Sweta Singh,
Advocates.
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MS. JUSTICE MUKTA GUPTA
PRADEEP NANDRAJOG, J.
1. On December 02, 1998 a Memorandum of Understanding was
executed between Sanghi Bros (Indore) Pvt.Ltd. and Kamlendra Sinh. As
per the recitals thereof, Surendra Sinhji of Alirajpur, the elder brother of
Kamlendra Sinh owned a large number of properties including A-9/29,
Vasant Vihar, New Delhi. Surendra Sinhji died in the intervening night of
th th
29 and 30 March, 1996 leaving behind a will dated November 05, 1984
as per which 55% share in the property at Vasant Vihar was bequeathed to
FAO(OS) 364/2015 Page 1 of 8
Kamlendra Singh and the remaining 45% to other persons. The recitals
record that Kamlendra Sinh had applied for the will to be probated to which
there was opposition by one Jyoti Rathore who claimed that a day prior to
his death Surendra Sinhji had executed a will, probate whereof she had
sought. The recitals further record that Kamlendra Sinh lacked resources to
maintain the properties of his elder brother and had requested Sanghi Bros
(Indore) Pvt.Ltd to incur expenditure in the upkeep of the properties and
being unable to repay the same had proposed to transfer his interest in the
property at Vasant Vihar for consideration and upon the terms and
conditions recorded in the memorandum.
2. With the aforesaid recitals, vide clause-1 of the MOU it was recorded
that Kamlendra Sinh had agreed to sell his interest acquired under the will
dated November 05, 1994 from his brother in house No.A-9/29, Vasant
Vihar, New Delhi in favour of Sanghi Bros (Indore) Pvt.Ltd. Vide clause-2
the agreed sale consideration was mentioned at ` 2.5 crores. Vide clause-3 it
was recorded that Sanghi Bros (Indore) Pvt.Ltd shall continue to pay such
money as would be needed to preserve the said property to be adjusted
against the sale consideration. Vide clause-4 it was recorded that the Sanghi
Bros (Indore) Pvt.Ltd shall pay to Kamlendra Sinh ` 15,000/- as
remuneration to act as a consultant and that said money would be treated as
consideration in the event the property is acquired by Kamlendra Sinh.
Vide clause-5 it was recorded that for renovation and maintenance of the
said property Sanghi Bros (Indore) Pvt.Ltd shall pay money to Kamlendra
Sinh. Vide clause-6 it was recorded that Sanghi Bros (Indore) Pvt.Ltd shall
help Kamlendra Sinh in pursing the probate petition and money paid would
FAO(OS) 364/2015 Page 2 of 8
be treated as part sale consideration. Vide clause-7 it was recorded that a
Special Power of Attorney shall be executed by Kamlendra Sinh in favour of
Sharad Kumar Sanghi to deal with the said property. Vide clause-8
Kamlendra Sinh agreed not to sell, mortgage, gift or transfer any property
belonging to him or comprised in the estate of his elder brother including the
residential house at Vasant Vihar. Vide clause-9 it was agreed that
Kamlendra Sinh shall identify a property of his own or out of his entitlement
to the satisfaction of the company as security in favour of the company.
Vide clause-10 it was agreed that Kamlendra Sinh shall execute a lease or a
deed of assignment/transfer/sale with respect to the property at Vasant Vihar
to convey the interest in favour of the Sanghi Bros (Indore) Pvt.Ltd. Vide
clause-11 it was agreed that the Sanghi Bros (Indore) Pvt.Ltd shall charge
and debit all monies paid to Kamlendra Sinh on account of the said property
towards taxes, maintenance, repairs, security, insurance etc. Vide clause-12
it was agreed that in the event the Sanghi Bros (Indore) Pvt.Ltd takes
possession of the said property under orders of the Court or under any
arrangement, rent paid or expenses incurred by the company shall be treated
as part of the sale consideration. Vide clause-13 it was agreed that as and
when Kamlendra Sinh realises his interest in the said property he shall
execute a conveyance deed and at that stage the remaining amount shall be
paid by Sanghi Bros (Indore) Pvt.Ltd to him. Vide clause-14 it was agreed
that Kamlendra Sinh may negotiate, settle or acquire any interest of the
beneficiary in the said property. Vide clause-15 it was agreed that
Kamlendra Sinh would execute further documents required to give effect to
clauses-10 and 13. Vide clause -16 it was agreed that if Kamlendra Sinh
FAO(OS) 364/2015 Page 3 of 8
failed to acquire any interest in the property the company would be entitled
to realize all the loans and amount paid to Surendra Sinhji by recourse to the
properties of Kamlendra Sinh. Vide clause-17 it was agreed that Kamlendra
Sinh would obtain necessary permission to convey title to Sanghi Bros
(Indore) Pvt.Ltd. Vide clause-18 it was stipulated :-
“That in the event of any party avoiding the obligation
under the Memorandum of Understanding the other party
shall have the right to compel him to perform under the
Specific Relief Act.”
3. Vide clause-21 it was stipulated:-
“That this agreement shall remain valid until it is cancelled
by the parties or at the instance of either party giving three
months notice, provided however, that the parties shall
review the agreement after every year”
4. In May 2004 the Sanghi Bros (Indore) Pvt.Ltd filed a suit seeking
specific performance of the Memorandum of Understanding pleading that
Kamlendra Sinh had intimated his intention to resile the Memorandum of
Understanding in May 2003. Alternative prayer made was to pass a decree
in sum of ` 20,79,049/- statedly paid from time to time to Kamlendra Sinh.
5. Admitting having executed the Memorandum of Understanding dated
December 02, 1998, Kamlendra Sinh pleaded he being a victim of
misrepresentation and inducement. He denied having received ` 20,79,049/-
but admitted certain payments received by him. Necessary would it be to
highlight that he did not raise the plea that in view of clause-21 of the
agreement, the same being determinable, no specific performance would lie
in view of Section 14(1)(c) of the Specific Relief Act.
FAO(OS) 364/2015 Page 4 of 8
6. Kamlendra Sinh filed IA No.3744/2005 praying for the rejection of
the plaint on the ground that the Memorandum of Understanding was
voidable at his option and for which he relied upon clause-21 of the
agreement.
7. With reference to clause-18, contents whereof we have reproduced
hereinabove, and various other clauses, vide order dated February 02, 2006
a learned Single Judge this Court held that in the face of clause-18 it cannot
be said that the contract is determinable.
8. Said order has attained finality.
9. Therefore, Surendera Sinhji cannot reurged at this stage the issue of
the contract being determinable and hence incapable of specific
performance.
10. It is in the aforesaid backdrop we need to consider the legality of the
impugned order dated April 27, 2015, which has restrained Kamlendra Sinh
from encumbering, apart from the suit property even other properties in
which he has an interest, and for which we would highlight that it is clause-
8 of the Memorandum of Understanding which has been used against him.
The learned Single Judge has highlighted said clause.
11. Whilst it may be true that the suit seeks specific performance of the
Memorandum of Understanding concerning property at Vasant Vihar but at
the same time it cannot be ignored that there is a prayer made in the suit to
restrain Kamlendra Sinh from encumbering other properties in which he has
been conferred a benefit by his elder brother as per the will dated November
05, 1984.
12. A perusal of the Memorandum of Understanding arrived at between
FAO(OS) 364/2015 Page 5 of 8
the parties, contents whereof we have briefly summarized hereinabove,
evinces that the parties are conscious of the fact that Kamlendra Sinh may
or may not perfect title to the suit property. Aware of the fact that
Kamlendra Sinh was to receive money from Sanghi Bros (Indore) Pvt.Ltd
for not only the repair, maintenance and upkeep of the suit property but
even other properties left behind by his elder brother Surendra Sinhji, the
agreement, envisaging that Surendra Sinhji may ultimately lose the battle
with Jyoti Rathore, has provided for a security in the form of personal
properties of Kamlendra Sinh being available to satisfy the return of such
monies which Sanghi Bros (Indore) Pvt.Ltd has advanced from time to time
to Surendra Sinhji.
13. Thus, the argument of learned senior counsel for Surendra Sinhji that
since the suit sought specific performance concerning the property at Vasant
Vihar therefore personal properties of Surendra Sinhji could not be the
subject matter of a restraint order is to be reject, and we do so.
14. The conduct of Kamledra Sinh also justifies the impugned order.
Notwithstanding he being under a restraint order to create any right, title or
interest in the property at Vasant Vihar, he appointed an attorney who
negotiated the sale of the property and on behalf of Kamlendra Sinh even
executed a sale-deed. The sale-deed was thereafter presented for registration
before the Sub-Registrar and it required a judicial order for the Sub-Register
not to register the sale-deed. In this connection we may note that on January
31, 2005 Kamlendra Sinh was directed not to create any third party interest
in the property at Vasant Vihar and this order was confirmed on January 22,
2008. In violation thereof Kamlendra Sinh is alleged to have executed an
FAO(OS) 364/2015 Page 6 of 8
agreement to sell on February 04, 2011 to sell to the vendee his interest in
the property at Vasant Vihar acknowledging Rs.4.5 crores. In spite of
various orders passed he did not produce the agreement to sell in the Court.
Sanghi Bros (Indore) Pvt.Ltd learnt about the same and filed IA
No.1564/2012 pleading that Kamlendra Sinh had executed an agreement to
sell concerning his share in the property at Vasant Vihar to which in the
reply filed Kamlendra Sinh positively stated that he had not created any
third party interest. He pleaded that without substantiating the nature of the
documents executed by him it could not be alleged that he had violated the
order dated January 22, 2008. In para 14 of the reply Kamlendra Sinh very
cleverly pleaded that being an old man he had executed some documents
with regard to the maintenance of the property. He denied having executed
the agreement to sell dated February 04, 2011. But to his misfortune,
Sanghi Bros (Indore) Pvt.Ltd managed to obtain a certified copy thereof
because the document was registered. Not only that. Through his attorney,
Kamlendra Sinh presented for registration a sale-deed in favour of one
R.C.Aggarwal and this required judicial intervention once again by Sanghi
Bros (Indore) Pvt.Ltd which had to file another interim application in which
on August 30, 2012 the Court had to direct the Sub-Registrar to forward the
documents for registration by the attorney of Kamlendra Sinh pertaining to
the property at Vasant Vihar. It is also relevant to note that that firstly
Kamlendra Sinh inducted R.C.Aggarwal as a licencee in the property at
Vasant Vihar and thereafter has proceeded to present for registration a sale-
deed concerning the property at Vasant Vihar in the name of a company of
which R.C.Aggarwal is a Managing Director.
FAO(OS) 364/2015 Page 7 of 8
15. We therefore find no merit in the appeal and specially keeping in view
the conduct of Kamlendra Sinh.
16. The appeal is dismissed but without any order as to costs.
(PRADEEP NANDRAJOG)
JUDGE
(MUKTA GUPTA)
JUDGE
FEBRUARY 08, 2016
skb
FAO(OS) 364/2015 Page 8 of 8