Thakkar Vs. M/S. Kiran Construction Co. & Ors.  INSC 1079 (15 May
JURISDICTION I.A. NOS.4, 6, 7 & 8 IN CIVIL APPEAL NO.2573 OF 2008 Bharat
Karsondas Thakkar ... Appellant M/s Kiran Construction Co. & Others ...
CIVIL APPEAL NOs.________ OF 2009 (Arising out of S.L.P.(C)Nos.28267-28268 of
2008 and 28270-28271 of 2008)
ALTAMAS KABIR, J.
granted in Special Leave Petition (Civil) Nos.28267-28268 of 2008 and
28270-28271 of 2008.
All the Appeals were
taken up together for disposal as they arise out of the same set of facts and
common questions of law are involved. Five 2 interlocutory applications, being
I.A.Nos.4,5,6,7 and 8, filed in connection with the Special Leave Petition, for
clarification of the judgment dated 9th April, 2008, passed in Civil Appeal
No.2573 of 2008 and for deletion of the names of some of the parties and for
filing additional documents, were also taken up for disposal along with the
of 2008 have been filed by the Official Receiver against the order dated 17th
November, 2006, passed by the Division Bench of the Bombay High Court in Appeal
No.748/2001 challenging the order dated 21st June, 2001, passed by the learned Single
Judge and restoring Notice of Motion No.140/99 for fresh hearing before the
learned Single Judge and SLP(C)Nos.28270-28271 of 2008 have been filed by the
Vaitys against the same order in Appeal No.747/2001 in Notice of Motion
No.2700/99, claiming the self-same reliefs. As indicated hereinabove, three of
the interlocutory applications have been filed in Civil Appeal 3 No.2573/2008,
for clarification of the Judgment dated 9th April, 2008, passed in Civil Appeal
No.2573/2008, disposing of Appeal No.741 of 2001.
also been filed by the petitioners in both the set of Special Leave Petitions
(now appeals) for condonation of delay in filing the same on account of the
fact that the subject matter of the said Special Leave Petitions was also the
subject matter of SLP(C)No.2328/2007, which was subsequently renumbered as
Civil Appeal No.2573/2008, but had remained undisposed of when the appeal
against the order dated 16th November, 2006, was finally disposed of by the
judgment and order dated 9th April, 2008. There being substance in explanation
given for condonation of delay in filing the Special Leave Petition, such delay
27th May, 1949, the Collector of Thane recorded a grant in favour of Mr. Sowar
Ramji Vaity entitling him to lease of lands relating to Survey Nos.83 to 91 in
Village Mulund for a term of 999 years. Mr. Sowar Ramji Vaity died in the year
1965, leaving behind him surviving Jagannath, Babu, Vishnu and Bhaskar
(hereinafter referred to as `the Vaitys') as his legal representatives to
succeed to his estate. On 1st October, 1973, the Vaitys entered into an
agreement to sell their rights and interests in the aforesaid lands to one Mr.
K.L. Danani (the Respondent No.44 herein) for a total consideration of Rs.2
lakhs. Under the Agreement, Mr. Danani was required to obtain lease of the suit
lands from the Collector in favour of the Vaitys within a period of two years.
During the months of April and June, 1974, Mr. Danani constituted a partnership
firm with Mr. K.V. Thakkar and Mr. S.S. Thakkar under the name of M/s Swas
Construction Company. The Appellant herein, who was then a minor, was admitted
to the benefits of the partnership firm. The time for completion of the 5 sale
under the agreement dated 1st October, 1973, was extended by two months till
after the land was converted to non-agricultural use or the Vaitys made a clear
and marketable title to the suit land, whichever was later. It was recorded
that M/s Swas Construction Company had been put in possession of the suit lands
in part performance of the agreement dated 1.10.1973.
the meantime, the Urban Land (Ceiling and Regulation) Act, 1976, was enacted
and Mr. K.L. Danani claiming possession under the said Agreement filed a
statement with the Urban Land Ceiling Authorities in terms of Section 6(1) of
On 12th June, 1979,
pursuant to a decision arrived at in April, 1978, the Government of Maharashtra
executed a lease in favour of the Vaitys for a period of 60 years. Immediately
thereafter, on 18th June, 1979, the Vaitys entered into an Agreement with M/s
Modern Development Corporation, the Respondent No.24 herein, granting them
development rights in respect of the suit lands. On 24th August, 1979, M/s
Modern Development Corporation is alleged to have entered into an agreement
with the Respondent No.1, M/s Kiran Construction Company, to transfer its
beneficial interests in the suit lands, except for Serial No.91, in favour of
the Respondent No.1. Clause 12 of the Agreement specifically required M/s
Modern Development Corporation to obtain confirmation from M/s Thakkar &
Associates that there was no subsisting agreement for sale in their favour in
respect of the property agreed to be sold.
18th February, 1980, the Appellant and Mr. K.V. Thakkar filed Suit No.252 of
1980 in the Bombay High Court against Mr. K.L. Danani (the Respondent No.44)
and Mr. S.S. Thakkar, inter alia, praying for a declaration that a partnership
had existed between them and that Mr. K.L. Danani and 7 Mr. S.S. Thakkar had
retired from M/s Swas Construction Company.
appears that in February, 1980, in Notice of Motion No.283 of 1980 filed in the
said Suit, Mr. K.L. Danani undertook not to part with possession of the suit
lands pending disposal of the Notice of Motion, which was disposed of on 9th
October, 1980, by the Bombay High Court by appointing the Court Receiver over
15th May, 1981, the Vaitys terminated the Agreement dated 18th June, 1979,
entered into with M/s Modern Development Corporation (the Respondent No.24).
This prompted the Respondent No.1 to file Suit No.1578 of 1981 against the
Vaitys and the partners of M/s Modern Development Corporation on 7th September,
1981, for specific performance of the purported Agreements dated 18th June,
1979 and 24th August, 1979. On 1st July, 1982, the Bombay High Court passed an
order restraining the Vaitys and 8 the partners of the Respondent No.4 from
selling, transferring, encumbering, alienating or further parting with
possession of the suit lands pending disposal of Suit No.1578 of 1981. After
the death of Mr. Babu Vaity on 1st May, 1994, all the parties to Suit No.252 of
1980, entered into a comprehensive settlement with the Vaitys, Mr. K.L. Danani
(the Respondent No.44) and one Mulchand G. Mehta (the Respondent No.47) and in
order to give effect to the settlement, the Vaitys and the Respondent No.47
were joined as defendants in Suit No.252 of 1980. On the very same day, the
Bombay High Court decreed the suit on consent terms.
Pursuant to the terms
and conditions arrived at between the parties, the Respondent No.48 took out
Notice of Motion No.140 of 1999 in Suit No.1578 of 1981, praying that the order
dated 1st July, 1982, be vacated. The Vaitys also took out Notice of Motion
No.2700 of 1999 in the said Suit, praying for the same order. In August, 2000,
M/s Kiran 9 Construction Company took out Chamber Summons No.1203 of 2000 in
Suit No.1578 of 1981, seeking to amend the plaint so as to join the Respondent
Nos.13 to 19 as defendants and also to incorporate a challenge to the decree
dated 6.5.1998 passed by the Bombay High Court in Suit No.252 of 1980. The said
Chamber Summons was dismissed by the learned Single Judge of the Bombay High
Court on 21st June, 2001, and the injunction granted on 1st July, 1982, was
vacated. The said order of injunction was also vacated by a common order of
even date passed in Notices of Motion No.140 and No.2700 of 1999.
Appeals were filed by the Respondent No.1 herein before the Division Bench of
the Bombay High Court, being Appeal Nos.745, 747 and 748 of 2001, all
challenging the order dated 21st June, 2001, passed by the Bombay High Court,
vacating the interim order of injunction dated 1st July, 1982.
The Division Bench of
the Bombay High Court allowed all the three Appeals by its orders dated 16th
November, 2006 and 17th November, 2006, passed in Appeal No.745 of 2001 in
Chamber Summons No.1203/2000 in Suit No.1578/1981 filed by Kiran Construction
Company and in Appeal Nos.747 and 748 of 2001 in Notices of Motion Nos.2700 and
140 of 1999 respectively, filed in the said Suit. The amendment of the plaint
was allowed and the order of injunction passed on 1st July, 1982, was restored.
The present Appeals have been filed against the said orders of the High Court
allowing the amendment of the plaint and joining the Respondent Nos.13 to 19 as
additional defendants in the suit.
for the appellants in these appeals, Mr. Mukul Rohtagi, Senior Advocate,
submitted that there is no dispute that the lands forming the subject matter of
these proceedings originally belonged to the Vaitys and that on 1st October,
11 1973, the Vaitys entered into an agreement for sale of the said lands with
Mr. K.L. Danani, who later on brought the benefits of the said agreement to M/s
Swas Construction Company of which the appellants are partners.
is also not disputed that on 18th June, 1979, the Vaitys entered into a
development agreement with M/s Modern Development Corporation which was an
unregistered partnership firm. The said partnership firm, in its turn, entered
into an agreement with M/s Kiran Construction Company on 24th August, 1979. Mr.
Rohtagi submitted that both Modern Development Corporation and Kiran
Construction Company had knowledge of the existing agreements entered into by
the Vaitys for sale of the lands. It is on account of such knowledge that the
Respondent No.1 in its agreement with Modern Development Corporation included a
clause that the latter would cause the Vaitys to make out a 12 marketable
title to the property, and if they failed to make out a marketable title, all
the monies paid to Kiran Construction Company would be returned to it with
interest at the rate of 12% per annum. As indicated hereinbefore, the agreement
which was entered into between the Vaitys and Modern Development Corporation on
18th June, 1979, was terminated by the Vaitys on 15th May, 1981, prompting
Kiran Construction Company to file Suit No.1578 of 1981 in the Bombay High
Court in which an interim order was passed by the Bombay High Court restraining
the Vaitys and the partners of Modern Development Corporation from selling,
transferring or further parting with possession of the suit lands.
Rohtagi submitted that in view of the said order of injunction, on 10th
November, 1981, Babu Vaity filed an affidavit in Notice of Motion No.1271 of 1981
indicating that on 15th May, 1981, 13 the Vaitys had terminated the agreement
dated 18th June, 1979, with Modern Development Corporation and that a separate
agreement had been executed in favour of one Mr. Ashok Kumar Goyal and Mr.
Gosalia granting them development rights in respect of the suit lands. Despite
the above, on 1st July, 1982, the Bombay High Court passed an order in Notice
of Motion No.12671 of 1981 in the suit filed by the Respondent No.1 and
restrained the Vaitys and the partners of Modern Development Corporation from
selling, transferring, encumbering, alienating or from further parting with
possession of the suit lands, pending disposal of the suit filed by the
Respondent No.1 herein. Mr. Rohtagi submitted that on 27th March, 1984, the
Respondent No.1 was informed by a letter written on behalf of the appellants
regarding the claims of the appellants herein, the filing of Suit No.252 of
1980 and the appointment of the Court Receiver who had taken over possession of
the suit properties.
indicated hereinbefore, on the death of Babu Vaity, all the parties to Suit
No.252 of 1980 arrived at a comprehensive settlement with the Vaitys, the
Respondent No.44 and one Mulchand G. Mehta, the Respondent No.47. On the same
day, the Bombay High Court passed a decree on the consent terms arrived at
between the parties in Suit No.252 of 1980. Mr. Rohtagi submitted that the High
Court vide order dated 21st June, 2001, dismissed the Chamber Summons taken out
by the Respondent No.1 and also vacated the injunction granted in Suit No.1578
of 1981 on 1st July, 1982. Mr. Rohtagi submitted that the order of the learned
Single Judge was challenged in Appeal and was ultimately set aside and the
prayer for amendment of the plaint made by the Respondent No.1 was allowed.
Rohtagi submitted that Kiran Construction Company did not have any privity of
contract with the Vaitys. Furthermore, the Vaitys had terminated their
agreement with Modern Development Corporation with whom Kiran Construction Company
had entered into an agreement and such termination had not been challenged by
Modern Development Corporation, particularly since it is an unregistered firm
and, therefore, could not sue or be sued under the provisions of Section 64 of
the Partnership Act.
Mr. Rohtagi submitted
that when Modern Development Corporation was unable to compel the Vaitys to
perform their part of the contract, Kiran Construction Company, whose claim, if
any, to the suit properties, was through Modern Development Corporation, could
not compel the Vaitys to specifically enforce the contract between the Vaitys
and Modern Development Corporation.
entire exercise undertaken by the Respondent No.1 was but an exercise in
futility and the Division Bench while allowing the prayer for impleadment made
on behalf of Kiran Construction Company erred in injuncting the Vaitys and also
the Thakkars from taking steps to develop the property.
Rohtagi urged that even the fact that a Receiver had been appointed over the
suit properties and the properties were, therefore, in custodia legis had been
suppressed, and, in any event, since the properties were in custodia legis, the
order of injunction could not have been passed.
Mr. Rohtagi submitted
that since Kiran Construction Company had no privity of contract with the
Vaitys and Modern Development Corporation being an unregistered partnership,
there was no possibility whatsoever of the suit filed by Kiran Construction
Company ever being decreed. For such reason also, the order of injunction
passed by the Division Bench was liable to be vacated.
Rohtagi submitted that from the orders passed by the Division Bench of the
Bombay High Court on 17th November, 2006, disposing of Appeal Nos. 747 and 748
of 2001 arising out of the orders 17 passed by the learned Single Judge in
Notices of Motion No.2700 and 140 of 1999, it would be evident that the said
appeals were allowed merely as a consequence of the order passed earlier on
16th November, 2006, in Appeal No.745/2001 in connection with the Chamber
Summons No.1203/2000 taken out by Kiran Construction Company. Mr. Rohtagi
submitted that no reasons, other than what has been indicated hereinabove, were
given for allowing the said appeals and accordingly, while Civil Appeal
No.2573/2008 was disposed of, consequential orders were passed whereby the
other appeals were also disposed of.
Rohtagi submitted that since this Court had earlier on 9th April, 2008,
affirmed the order of the learned Single Judge and had rejected the Chamber
Summons for impleadment, consequential orders were required to be passed for
setting aside the order dated 17th November, 2006, passed by the 18 Division
Bench of the Bombay High Court in Appeal Nos.747 and 748 of 2001 and also to
vacate the interim order dated 1st July, 1982, passed in Suit No.1578 of 1981
filed by the Respondent No.1 herein.
adopting Mr. Rohtagi's submissions, Mr. Ranjit Kumar, learned Senior Advocate
appearing for Respondent Nos.2A to 2E, 3 to 16, 18, 19 and 31 in IA No.6 of
2008, prayed for clarification of the judgment and order passed by this Court
on 9th April, 2008, in Civil Appeal No.2573 of 2008 to the extent that as a
consequence of the order dated 16th November, 2006, passed in Appeal no.745 of
2001 being set aside, the order dated 17th November, 2006, passed by the
Division Bench in Appeal No.747 of 2001 and Appeal no.748 of 2001 were also set
Ranjit Kumar submitted that after the prayer for amendment of the plaint was
disallowed 19 by this Court, it was only through inadvertence that
consequential orders were not recorded as far as the two appeals are concerned
and that when the Vaitys were not before the Court in the suit filed by it, the
Respondent No.1 could have no justification for submitting that the interim
order passed by the Division Bench of the High Court should be allowed to
remain. He also reiterated Mr. Rohtagi's submissions that when there was no
privity of contract between the Respondent No.1, Kiran Construction Company,
and the Vaitys and its suit was for relief only against Modern Development
Corporation, the agreement entered into between Modern Development Corporation
and the Vaitys could not be specifically enforced by the said Respondent and
the Division Bench of the High Court had committed an error in allowing the
interim order of injunction to continue against the appeals.
the other hand, Mr. Buddy A. Ranganadhan, learned Advocate appearing for Kiran
Construction Company, urged that the rejection of the prayer made on behalf of
the Respondent No.1 for leave to amend the plaint did not mean that the orders
prayed for in these appeals would follow as a matter of consequence. It was
urged that the judgment delivered by this Court on 9th April, 2008, was only
concerned with the challenge to the amendment and that the scope of the appeal
was limited to the amendment of the plaint. According to learned counsel, the
prayer for injunction was made on account of the decision of the Respondent
No.1 to file a separate suit and it was in that context that the prayer for
injunction to continue till the hearing of the new suit could be taken up.
submitted that, in any event, at no point of time was any indication given that
any argument was to be advanced on the question of remand to the Division
Ranganadhan also urged that the prayer for vacating the interim order that had
lasted for 16 years should not have been entertained. He submitted that the
appeals were misconceived and were liable to be dismissed.
the submissions made on behalf of the respective parties and the materials on
record, it is quite apparent that the Chamber Summons No.1203 of 2000 taken out
by Kiran Construction Company for leave to amend its suit to incorporate a
challenge to the consent decree passed in Suit No.252 of 1980 and also to
implead the appellants herein, Mr. K.L. Danani and Mr. Mulchand G. Mehta as
defendants in the suit, was heard along with and Notice of Motion No.140 of
1999 filed by the Receiver and Notice of Motion No.2700 of 1999 filed by Vaitys
for vacating the order of injunction dated 1st July, 1982, were taken up for
hearing together. While Chamber Summons filed by Kiran Construction Company was
dismissed, the Notices of Motion filed by the Receiver and the Vaitys were
allowed and the order of injunction dated 1st July, 1982, was vacated.
the three appeals before the High Court were filed by Kiran Construction
Company against the orders passed by the learned Single judge on the Chamber
Summons and the two Notices of Motion, the Division Bench of the High Court,
while considering the said appeals, allowed the prayer for amendment of the
plaint and as a consequence reversed the learned Single Judge's order on the two
Notices of Motion and remanded the Notice of Motion for fresh hearing.
the Civil Appeal filed by the appellants herein against the three orders passed
by the Division Bench, although, by order dated 9th April, 2008, the Appeal was
allowed and the order of the Division Bench allowing the amendment prayed for
by the Respondent No.1 was set aside, through 23 inadvertence, no orders were
passed in respect of the appeals against the orders passed on the two Notices
of Motion for vacating the interim order dated 1st July, 1982. It is for
clarification of the said order that the interim applications have been filed
which are under consideration.
the prayer for amendment of the plaint to include the challenge to the consent
decree passed in Suit No.252 of 1980 was disallowed by this Court, the question
of restraining them from dealing with the suit properties over which the
Respondent No.1 has no established claim would be completely unreasonable and
merely because the same had been in force for a long time, would be no ground
to allow the same to continue.
as pointed out by Mr. Mukul Rohtagi and Mr. Ranjit Kumar, learned Senior
Advocates, there is no privity of contract between Kiran Construction Company
and the Vaitys, its claim is, 24 therefore, restricted to Modern Development
Corporation alone and is also dependent upon the right of Modern Development
Corporation to specific performance of its agreement with the Vaitys. In other
words, until and unless Modern Development Corporation is able to establish a
right over the suit properties, Kiran Construction Company can have no claim in
respect thereof. Furthermore, since the Receiver continues to be in possession
of the suit properties and the properties continue to be in custodia legis,
Kiran Construction Company cannot ask for possession of the said properties.
our view, the claim attempted to be set up by Kiran Construction Company is
highly tenuous and is entirely dependent upon the claim of Modern Development
Corporation which has so far not attempted to establish such claim. In such
circumstances it would be wholly inequitable to 25 allow the interim order to
continue. The same is accordingly vacated.
the appeals filed by the Official Receiver and the Vaitys must succeed and are
allowed. Simultaneously, Interlocutory Application Nos.4, 6 and 7 for
clarification of the judgment and order dated 9th April, 2008, passed in Civil
Appeal No.2573/2008 and Interlocutory Application No.8 for filing additional documents
are also disposed of by virtue of this judgment. Further more, the following
clerical mistakes have been pointed out in paragraph 7 of the I.A.No. 4 with
regard to the judgment dated 9.4.2008 passed in Civil Appeal No. 2573 of 2008:
a. "In paragraph
2, page 1, line 3, the word "Serial" ought to be "Survey".
b. The reference to
"K.B. Thakkar" in paragraph 2, paragraph 4 and paragraph 11 ought to
c. The submission at
paragraph 21 was in fact the submission made on behalf of the Petitioner and
not on behalf of Respondent No.1.; and d. In paragraph 16, page 15, line 1 the
word "respondent" is to be read as "Respondent No.1."
Let a Corrigendum be
issued with regard to the errors indicated above. As far as Interlocutory
Application No.5 for deletion of the names of the Respondent Nos.17, 20, 22,
25(a), 25(b), 25(c), 25(d) and 27, is concerned, the same is allowed at the
risk of the appellant.
as, these appeals have been taken from interlocutory orders and the suit of the
Respondent No.1 is still pending, we make it clear that the observations made
in this order are only for the purpose of disposal of the applications for
vacating the interim orders and such observations should not influence the
learned Trial Court from disposing of the pending suits, in accordance with
will, however, be no order as to costs.