# VIDUR IMPEX AND TRADERS PVT. LTD. AND OTHERS v. TOSH APARTMENTS PVT. LTD. AND OTHERS

- **Citation:** [2012] 10 S.C.R. 307
- **Court:** Supreme Court of India
- **Decided:** 2012-08-21
- **Case number:** Civil appeal No. 5918 of 2012
- **Bench:** G.S. Singhvi, Sudhansu Jyoti Mukhopadhaya
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/vidur-impex-and-traders-pvt-ltd-and-others-v-tosh-apartments-pvt-ltd-and-others-27946
- **Pages:** 49

## Headnote

Code of Civil Procedure, 1908 - Or. I r. 10(2) and Or. XL
A
8
- Agreement for sale in respect of suit property by R-2 in
C
favour of R-1 - Thereafter R-2 giving possession of property
to R-4 - Suit for specific performance by R-1, before Delhi
High Court - Interim injunction by Delhi High Court from
transferring or alienating the property - R-2 in violation of
interim order executed sale deeds in favour of appellants -
D
The appellants further executing agreement for sale in favour
of Developers - Delhi High Court appointing Receiver -
Developers filing case against the appellants in Calcutta for
execution of sale deed in their favour - Calcutta High Court
directing the appellants to execute sale deed in favour of E
Developers and also appointed a Receiver- Delhi High Court
restraining the appellants, the Developer and the Receiver
appointed by Calcutta High Court from taking possession of
the property - Calcutta High Court when came to know about
the pending litigation before Delhi High Court, made its order
F
subject to the order of Delhi High Court - Appellant's
application for impleadment in the suit filed by R-1 dismissed
by Delhi High Court - The application of Developer seeking
continuation of Receiver appointed by Calcutta High Court
also dismissed - By impugned order Division Bench of Delhi G
High Court upheld the three orders of Single Judge of Delhi
High Court in rejecting the application for impleadment and
the application for continuation of Receiver appointed by
Calcutta High Court and in appointing the Receiver - On
307
H
308
SUPREME COURT REPORTS
[2012] 10 S.C.R.
A appeal, held: The impleadment df appellant and Developers
in the suit was rightly rejected -
Court can implead a
'necessary party' or a 'proper p~rty' - In a suit for specific
performance, a purchaser can be impleaded, if his conduct
is above board and whose application for impleadment is filed
B within reasonable time - The appellants and the Developers
were neither necessary nor proper parties - They were
strangers to the agreement for sale deed executed in favour
of R-1 - Sale was executed in favour of the appellants and
further by appellants in favour of Developers in violation of
C interim injunction in the suit - The application was also highly
belated - Delhi High Court was right in appointing the
Receiver and in rejecting the continuation of the Receiver
appointed by Calcutta High Court - In the instant case,
doctrine of comity of jurisdictions of courts, cannot be invoked
as the order of Calcutta High Court was obtained by
D concealing the fact of pending litigation before Delhi High
Court - The appellants and the Developers imposed with cost
of Rs. 5 lakhs each for the conduct of suppressing facts from
Calcutta High Court - Doctrine of comity of jurisdiction of
courts.
E
F
Words and Phrases :
'Necessary party' and 'Proper party' - Meaning of, in the
context of Code of Civil Procedure, 1908.
Respondent No. 2 (owner of the suit property)
executed an agreement for sale in favour of respondent
No. 1 on 13.9.1988. In 1992 respondent No. 2 handed over
the possession of the suit property to respondent No. 4.
Respondent No. 1 on coming to know about the
G alienation for the property to respondent No. 4, filed suit
No. 42511993 in Delhi High Court for specific performance
of agreement for sale dated 13.9.1988. The High Court by
interim order dated 18.2.1993 restrained respondent Nos.
2 and 4 from transferring, alienating or part with
H
VIDUR IMPEX AND TRADERS PVT. LTD. v. TOSH
309
APARTMENTS PVT. LTD.
possession or create third party interest in the suit A
property.
On 19.2.1997, respondent No. 2 executed 6
agreements for sale in favour of the 6 appellantCompanies (in Civil Appeal No. 5918/12) and executed 6 B
sale-deeds in their favour on 30.5.1997. In the meantime,
the appellant-Companies executed agreement for sale in
favour of the Developers (appellant in Civil Appeal No.
5917/12) by agreement dated 18.3.1997. Thereupon,
respondent No. 1 filed

## Text

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[2012] 10 S.C.R. 307
VIDUR IMPEX AND TRADERS PVT. LTD. AND OTHERS
v.
TOSH APARTMENTS PVT. LTD. AND OTHERS
(Civil appeal No. 5918 of 2012 etc.)
AUGUST 21, 2012
[G.S. SINGHVI AND SUDHANSU JYOTI
MUKHOPADHAYA, JJ.]
Code of Civil Procedure, 1908 - Or. I r. 10(2) and Or. XL
A
8
- Agreement for sale in respect of suit property by R-2 in
C
favour of R-1 - Thereafter R-2 giving possession of property
to R-4 - Suit for specific performance by R-1, before Delhi
High Court - Interim injunction by Delhi High Court from
transferring or alienating the property - R-2 in violation of
interim order executed sale deeds in favour of appellants -
D
The appellants further executing agreement for sale in favour
of Developers - Delhi High Court appointing Receiver -
Developers filing case against the appellants in Calcutta for
execution of sale deed in their favour - Calcutta High Court
directing the appellants to execute sale deed in favour of E
Developers and also appointed a Receiver- Delhi High Court
restraining the appellants, the Developer and the Receiver
appointed by Calcutta High Court from taking possession of
the property - Calcutta High Court when came to know about
the pending litigation before Delhi High Court, made its order
F
subject to the order of Delhi High Court - Appellant's
application for impleadment in the suit filed by R-1 dismissed
by Delhi High Court - The application of Developer seeking
continuation of Receiver appointed by Calcutta High Court
also dismissed - By impugned order Division Bench of Delhi G
High Court upheld the three orders of Single Judge of Delhi
High Court in rejecting the application for impleadment and
the application for continuation of Receiver appointed by
Calcutta High Court and in appointing the Receiver - On
307
H
308
SUPREME COURT REPORTS
[2012] 10 S.C.R.
A appeal, held: The impleadment df appellant and Developers
in the suit was rightly rejected -
Court can implead a
'necessary party' or a 'proper p~rty' - In a suit for specific
performance, a purchaser can be impleaded, if his conduct
is above board and whose application for impleadment is filed
B within reasonable time - The appellants and the Developers
were neither necessary nor proper parties - They were
strangers to the agreement for sale deed executed in favour
of R-1 - Sale was executed in favour of the appellants and
further by appellants in favour of Developers in violation of
C interim injunction in the suit - The application was also highly
belated - Delhi High Court was right in appointing the
Receiver and in rejecting the continuation of the Receiver
appointed by Calcutta High Court - In the instant case,
doctrine of comity of jurisdictions of courts, cannot be invoked
as the order of Calcutta High Court was obtained by
D concealing the fact of pending litigation before Delhi High
Court - The appellants and the Developers imposed with cost
of Rs. 5 lakhs each for the conduct of suppressing facts from
Calcutta High Court - Doctrine of comity of jurisdiction of
courts.
E
F
Words and Phrases :
'Necessary party' and 'Proper party' - Meaning of, in the
context of Code of Civil Procedure, 1908.
Respondent No. 2 (owner of the suit property)
executed an agreement for sale in favour of respondent
No. 1 on 13.9.1988. In 1992 respondent No. 2 handed over
the possession of the suit property to respondent No. 4.
Respondent No. 1 on coming to know about the
G alienation for the property to respondent No. 4, filed suit
No. 42511993 in Delhi High Court for specific performance
of agreement for sale dated 13.9.1988. The High Court by
interim order dated 18.2.1993 restrained respondent Nos.
2 and 4 from transferring, alienating or part with
H
VIDUR IMPEX AND TRADERS PVT. LTD. v. TOSH
309
APARTMENTS PVT. LTD.
possession or create third party interest in the suit A
property.
On 19.2.1997, respondent No. 2 executed 6
agreements for sale in favour of the 6 appellantCompanies (in Civil Appeal No. 5918/12) and executed 6 B
sale-deeds in their favour on 30.5.1997. In the meantime,
the appellant-Companies executed agreement for sale in
favour of the Developers (appellant in Civil Appeal No.
5917/12) by agreement dated 18.3.1997. Thereupon,
respondent No. 1 filed contempt petition against C
respondent Nos. 2 and 4 and the appellants. High Court
entertained the petition against respondent Nos. 2 and 4
but declined to do so qua the appellants observing that
case was not made out against them. Delhi High Court
appointed Receiver.
D
The Developers opened another front of litigation in
Calcutta against the appellant-companies, alleging that
they failed to execute the sale-deed in terms of the
agreement dated 18.3.1997. The dispute was referred for
arbitration. The sole Arbitrator passed award directing E
the appellant-companies to hand-over the possession of
the property to the Developers and to execute sale-deed
in its favour. As the appellant-companies failed to comply
with the award, Calcutta High Court, in application of the
Developers, directed the appellant-companies to comply
F
with the award. Calcutta High Court also appointed a
Receiver to take possession of the suit property. The
Receiver (appointed by Calcutta High Court), took
symbolic possession of the suit property.
Respondent No. 1 filed application, irhpleading G
respondent Nos. 2 and 4, appellant-companies and the
Developers and prayed for order restraining respondent
Nos. 2 and 4 from handing-over possession and
restraining the appellants from taking possession in the
garb of order passed by Calcutta High Court. H
310
SUPREME COURT REPORTS
(2012] 10 S.C.R.
A Respondent No. 4 also filed application seeking
injunction against dispossession. Delhi High Court
passed interim order in favour of the applicants.
Respondent No. 4 also approached Calcutta High
B Court and brought to the notice of the Court, the order
of Delhi High Court restraining the appellants and
Developers from interfering with his possession. Calcutta
High Court ordered that any order passed by it, if is in
conflict with the order of Delhi High Court, it would be
C subject to the order of Delhi High Court.
In 2008, the appellant-companies filed application for
their impleadment as defendants in the Suit No. 425/1993.
Single Judge of High Court dismissed the application.
o
The Developers, respondent No. 4 and the appellants
filed 3 appeals challenging different orders. Division
Bench of High Court dismissed all the appeals and held
that Single Judge of Delhi High Court was right in
appointing a Receiver and also approved rejection of the
E applications for impleadment and also the application for
continuation of the Receiver appointed by Calcutta High
Court. Hence the present appeals by the appellantCompanies and also the Developers.
The questions for consideration before this Court
F were whether the appellants were entitled to be
impleaded as parties in Suit No. 425/1993 on the ground
that during the pendency of the suit, they had purchased
the suit property; and whether the Delhi High Court was
justified in appointing the Receiver and directing him to
G take possession of the property in dispute.
Dismissing the appeals, the Court
HELD: 1.1 The broad principles which should govern
disposal of an application for impleadment are: The court
H can, at any stage of the proceedings, either on an
VIDUR IMPEX AND TRADERS PVT. LTD. v. TOSH
311
APARTMENTS PVT. LTD.
application made by the parties or otherwise, direct A
impleadment of any person as party, who ought to have
been joined as plaintiff or defendant or whose presence
before the court is necessary for effective and complete
adjudication of the issues involved in the suit. A
necessary party is the person who ought to be joined as
B
party to the suit and in whose absence an effective
decree cannot be passed by the court. A proper party is
a person whose presence would enable the court to
completely, effectively and properly adjudicate upon all
matters and issues, though he may not be a person in c
favour of or against whom a decree is to be made. If a
person is not found to be a proper or necessary party,
the court does not have the jurisdiction to order his
impleadment against the wishes of the plaintiff. In a suit
for specific performance, the court can order D
impleadment of a purchaser whose conduct is above
board, and who files application for being joined as party
within reasonable time of his acquiring knowledge about
the pending litigation. However, if the applicant is guilty
of contumacious conduct or is beneficiary of a
E
clandestine transaction or a transaction made by the
owner of the suit property in violation of the restraint
order passed by the court or the application is unduly
delayed then the court will be fully justified in declining
the prayer for impleadment. [Para 36] [350-B-H; 351-A-B]
F
Ramesh
Hirachand
Kundanmal
v.
Municipal
Corporation of Greater Bombay (1992) 2 SCC 524: 1992 (2)
SCR 1; Anil Kumar Singh v. Shivnath Mishra (1995) 3 SCC
147: 1994 (5) Suppl. SCR 135; Mumbai International
Airport (P) Ltd. v. Regency Convention Centre and Hotels (P)
G
Ltd. (2010) 7 SCC 417: 2010 (7) SCR 790; Kasturi v.
lyyamperumal (2005) 6 SCC 733: 2005 (3) SCR 864; Amit
Kumar Shaw v. Farida Khatoon (2005) 11 SCC 403: 2005
(3) SCR 509; Savitri Devi v. DJ, Gorakhpur (1999) 2 SCC
577: 1999(1) SCR 725; Vinod Seth v. Devinder Bajaj (2010)
H
312
SUPREME COURT REPORTS
[2012] 10 S.C.R.
A 8 SCC 1: 2010 (7) SCR 424; Surjit Singh v. Harbans Singh
(1995) 6 SCC 50: 1995 (3) Suppl. SCR 354 ; Sarvinder
Singh v. Dalip Sisngh (1996) 5 SCC 539: 1996 (4)
Suppl. SCR 271 ; Bibi Zubaida Khatoon v. Nabi Hassan
(2004) 1 SCC 191: 2003 (5) Suppl. SCR 290 - relied on.
B
1.2 Respondent No.1 had filed suit for specific
performance of agreement dated 13.9.1988 executed by
respondent No.2. The appellants and the Developers are
total strangers to that agreement. They came into the
picture only when respondent No.2 entered into a
C clandestine transaction with the appellants for sale of the
suit property and executed the agreements for sale,
which were followed by registered sale deeds and the
appellants executed agreement for sale in favour of the
Developers. These transactions were in clear violation of
D the order of injunction passed by the Delhi High Court
which had restrained respondent No.2 from alienating the
suit property or creating third party interest. The
agreements for sale and the sale deeds executed by
respondent No.2 in favour of the appellants did not have
E any legal sanctity. The status of the agreement for sale
executed by the appellants in favour of the Developers
was no different. These transactions did not confer any
right upon the appellants or the Developers. Therefore,
their presence is not at all necessary for adjudication of
F the question whether respondent Nos.1 and 2 had
entered into a binding agreement and whether
respondent No.1 is entitled to a decree of specific
performance of the said agreement. That apart, after
executing agreement for sale dated 18.3.1997 in favour
G of the Developers, the appellants cannot claim to have
any subsisting legal or commercial interest in the suit
property and they cannot take benefit of the order
passed by the Calcutta High Court for appointment of an
arbitrator which was followed by an order for
H appointment of receiver because the parties to the
VIDUR IMPEX AND TRADERS PVT. LTD. v. TOSH
313
APARTMENTS PVT. LTD.
proceedings instituted before that court deliberately A
suppressed the facts relating to Suit No.425/1993
pending before the Delhi High Court and the orders of
injunction passed in that suit. [Para 37] (351-D-H; 352-AB]
1.3 The application for impleadment filed by the
B
appellants was highly belated. Although, the appellants
have pleaded that at the time of execution of the
agreements for sale by respondent No.2 in their favour
in February 1997, they did not know about the suit filed
by respondent No.1, it is difficult, if not impossible, to C
accept their statement because the smallness of time
gap between the agreements for sale and the sale deeds
executed by respondent No.2 in favour of the appellants
and the execution of agreement for sale by the appellants
in favour of the Developers would make any person of D
ordinary prudence to believe that respondent No.2, the
appellants and the Developers had entered into these
transactions with the sole object of frustrating agreement
for sale dated 13.9.1988 executed in favour of respondent
No.1 and the suit pending before the Delhi High Court.
E
In the application for impleadment filed by them, the
appellants did not offer any tangible explanation as to
why the application for impleadment was filed only on
4.2.2008 i.e. after 7 years of the passing of injunction
order dated 22.1.2001 and, this constituted a valid ground
F
for declining their prayer for impleadment as parties to
Suit No.425/1993. [Para 38] (352-C-H; 353-A-B]
Surjit Singh v. Harbans Singh (1995) 6 SCC 50 - relied
on.
Kasturi v. lyyamperumal (2005) 6 SCC 733: 2005 (3)
SCR 864 -
held inapplicable.
G
Nagubai Ammal v. B Shama Rao AIR 1956 SC 593:
1956 SCR 451 ;Khemchand S. Choudhari v. Vishnu Hari
H
314
SUPREME COURT REPORTS
[2012) 10 S.C.R.
A (1983) 1 SCC 18: 1983 (1 )SCR 898 - referred to.
2.1 Delhi High Court was justified in appointing the
receiver and directing him to take possession of the
property. The plea of the Developers to invoke the
8 doctrine of comity of jurisdictions of the court~ for
continuance of the receiver appointed by the Calcutta
High Court has no merit. When the Developers
approached the Calcutta High Court, the Delhi High Court
was already seized with the suit involving the subject
C matter of the award. The contention of the appellants and
the Developers that they were unaware of the
proceedings before the Delhi High Court cannot be
accepted because in Suit No.161/1999 filed by
respondent No.2 for declaring that the agreements for
sale and the sale deeds relied upon by the appellants
D were false and fabricated, a specific reference was made
to the suit filed by respondent No.1. That apart, in its
order dated 15.2.2001 passed in the application filed by
respond9nt No.4 in EC No.10/2000, the Single Judge of
the Calcutta High Court categorically observed that the
E said court had not been apprised of the facts relating to
the suit pending before the Delhi High Court and the
injunction orders passed therein including order dated
8.2.2001 restraining the receiver of the Calcutta High
· Court from taking possession of the property and that if
F these facts had been disclosed, the Court would have
been slow in passing the order that it had passed earlier
and hence the order passed by it, if it is in conflict with
the order passed by the Delhi High Court, would be
subject to that order and the Developers who is a party
G to the proceedings before the Delhi High Court can
approach the said court for obtaining appropriate orders.
This shows that on being apprised of the correct facts,
the Single Judge of the Calcutta High Court had shown
due respect to the orders passed by the Delhi High Court
H and directed that the same should operate till they are
VIDUR IMPEX AND TRADERS PVT. LTD. v. TOSH
315
APARTMENTS PVT. LTD.
modified or vacated at the instance of the appellants or A
the Developers. The course of action adopted by the
Calcutta High Court was in consonance with the notion
of judicial propriety. Therefore, the Developers cannot
invoke the doctrine of comity of jurisdictions of the courts
for seeking continuance of the receiver appointed by the
B
Calcutta High Court. [Para 40) [353-F-H; 354-A-H; 355-A]
2.2 The Single Judge and the Division Bench of the
Delhi High Court have assigned detailed and cogent
reasons for appointing a receiver to take care of the suit C
property. The clandestine nature of the transactions
entered into between respondent No.2 and the appellants
on the one hand and the appellants and the Developers
on the other, would give rise to strong presumption that
if a receiver is not appointed, further attempts would be
made to alienate the property in similar fashion. D
Therefore, there is no justification to interfere with the
impugned order or the one passed by the Single Judge
of the Delhi High Court. [Para 41) [355-B-D]
Jayaram Mudaliar v. Ayyaswamia and Ors. (1972) 2
E
SCC 200: 1973(1) SCR 139 ; Rajender Singh and Ors. v.
Santa Singh and Ors.(1973) 2 SCC 705: 1974 (1) SCR
381 ; Joginder Singh Bedi v. Sardar Singh and Ors. 26 (1984)
DLT 162 Del (DB); Sanjay Gupta v. Kalawati and Ors. (1992)
53 DRJ 653 - referred to.
F
3. For the contumacious conduct of suppressing
facts from the Calcutta High Court and thereby
prolonging the litigation, the appellants and the
Developers are saddled with cost of Rs.5 lakhs each. The
amount of cost shall be deposited by them with the G
Supreme Court Legal Services Committee. [Para 43) [355E-F]
Case Law Reference:
1973 (1) SCR 139
Referred to
Para 20
H
316
SUPREME COURT REPORTS
[2012] 10 S.C.R.
A
1974 (1) SCR 381
Referred to
Para 20
Para 20
Para 20
Para 22
Para 22
Para 26
Para 27
Para 28
Para 29
Para 39
Para 30
Para 31
Para 32
Paras 33
and 39
B
c
D
26 (1984) DLT 162 Del (DB) Referred to
(1992) 53 DRJ 653
Referred to
1956 SCR 451
1983 (1) SCR 898
1992 (2) SCR 1
Referred to
Referred to
Relied on
1994 (5) Suppl. SCR 135
Relied on
2010 (7) SCR 790
Relied on
2005 (3) SCR 864
2005 (3) SCR 509
1999 (1) SCR 725
2010 (7) SCR 424
Relied on
Held inapplicable
Relied on
Relied on
Relied on
E
1995 (3) Suppl. SCR 354
Relied on
F
G
1996 (4) Suppl. SCR 271
Relied on
2003 (5) Suppl. SCR 290
Relied on
Para 34
Para 35
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
5918 of 2012.
From the Judgment & Order dated 20.02.2009 of the High
Court "Of Delhi at New Delhi in FAO (OS) No. 324 of 2008.
WITH
C.A. No. 5917 of 2012.
Sunil Gupta, Dr. Abhishek Manu Singhvi, Sanjay Jain,
H Manoj, Aparna Sinha, Bijoy Kumar Jian, C. Mukund. P.V.
VIDUR IMPEX AND TRADERS PVT. LTD. v. TOSH 317
APARTMENTS PVT. LTD.
Saravana Raja, Dr. Kailash Chand, Mandeep Singh Vinaik, A
Rohan Thawani, Vandana Sehgal, Hardeep Singh Anand, D.K.
Thakur, Anil Katiyar, Sanjeev Anand, Yakesh Anand, Murari
Kumar, Prateek K., Nimit Mathur for the appearing parties.
The Judgment of the Court delivered by
B
G.S. SINGHVI, J. 1. Leave granted.
2. Whether M/s. Vidur lmpex and Traders Pvt. Ltd., and five
other companies (hereinafter described as the appellants), who
are said to have purchased the suit property, i.e. 21, Aurangzeb c
Road, New Delhi in violation of the order of injunction passed
by the learned Single Judge of the Delhi High Court are entitled
to be impleaded as parties to Suit No.425/1993 filed by
respondent No.1 - M/s. Tosh Apartments Pvt. Ltd. is one of the
two questions which arises for consideration in these appeals D
filed against judgment dated 20.2.2009 of the Division Bench
of the Delhi High Court. The other question which needs
consideration is whether the Delhi High Court was justified in
appointing a receiver with a direction to take possession of the
suit property despite the fact that the Calcutta High Court had E
already appointed a receiver at the instance of M/s. Bhagwati
Developers Pvt. Ltd. (for short, 'Bhagwati Developers').
3. The suit property was leased by the Secretary of State
for India to Sidh Nath Khanna and Sukh Nath Khanna sometime
in 1930. After 12 years, the Governor General in Council F
sanctioned the grant of perpetual lease in favour of one of them,
namely, Sidh Nath Khanna. In the family partition which took
place in December 1955, the suit property fell to the share of
Shri Devi Prasad Khanna, who was one of the heirs of Sidh
Nath Khanna. He rented out the same to the Sudan Embassy G
on 12.9.1962. In October 1977, the name of respondent No.2Pradeep Kumar Khanna (son of Devi Prasad Khanna), who died
during the pendency of the litigation before the High Court and
is represented by his legal representatives, was entered in the
records of the Ministry of Works and Housing, Land and H
318
SUPREME COURT REPORTS
[2012] 10 S.C.R.
A
Development Office and the lease was transferred in his name.
4. In March 1980, respondent No.2 mortgaged the suit
property to Shri S.N. Tondon. After 5 years, he entered into a
collaboration agreement with Shri Arun Kumar Bhatia
8
(respondent No.3} for construction of a multi-storied building. He
also executed an agreement for sale in favour of respondent
No.3. In November 1987, respondent No.2 took loan from Shri
Avtar Singh and created an equitable mortgage in his favour.
On 13.9.1988, respondent No.2 executed an agreement for sale
in favour of respondent No.1 for a consideration of Rs.2.5
C
crores. After some time, respondent No.3 executed assignment ·
deed dated 13.12.1988 in favour of respondent No.2.
Simultaneously, the parties cancelled the collaboration
agreement. After 3 months, respondent No.2 mortgaged the suit
property in favour of respondent No.4. In 1992, respondent Nos.
D 2 and 4 entered into an agreement whereby the latter agreed
to provide various services including the one that he will get the
suit property vacated from the Sudan Embassy and for that he
will charge Rs.4 crores.
E
5. The Sudan Embassy vacated the suit property on
12.5.1992 and handed over possession to respondent No.2,
who is said to have handed over the same to respondent No.4.
On coming to know about the proposed alienation of property
by respondent No.2, respondent No.1 filed Suit No.425/1993
F
in the Delhi High Court for specific performance of agreement
for sale dated 13.9.1988, award of damages and injunction. It
also filed IA No.1947/1993 under Order 39 Rules 1 and 2 CPC.
The learned Single Judge passed order dated 18.2.1993 and
directed that defendant Nos. 1 and 3 (respondent Nos. 2 and
G 4 herein) shall not transfer, alienate or part with possession in
any manner or create third party rights in respect of the suit
property. After receiving summons, respondent Nos.2 and 4
filed IA No. 10730/1993 under Order 7 Rule 11 for rejection of
the plaint on the ground that the same was barred by time. The
learned Single Judge dismissed the application vide order
H
dated 5.4.1994 and directed that interim order dated 18.2.1993
VIDUR IMPEX AND TRADERS PVT. LTD. v. TOSH
319
APARTMENTS PVT. LTD. [G.S. SINGHVI, J.]
shall continue.
6. On 19.2.1997, respondent No.2 executed 6 agreements
A
for sale in favour of the appellants for a total consideration of
Rs.2.88 crores. In furtherance of those agreements, six sale
deeds were executed and registered on 30.5.1997. In the
8
meanwhile, the appellants executed agreement for sale dated
18.3.1997 in favour of Bhagwati Developers for a consideration
of Rs.4.26 crores and received Rs.3.05 crores.
7. At that stage, respondent No.1 filed IA No. 8145/1998
for restraining respondent Nos.2 and 4 from handing over C
possession of the suit property to any other person. Respondent
No.2 contested the application by asserting that he had not
executed any sale deed in favour of the appellants and that
possession of the suit property had already been handed over
to respondent No.4. Thereupon, respondent No.1 filed CCP No.
D
118/1998 under Order 39 Rule 2A CPC with the allegation that
the non-applicants including the appellants herein had entered
into a conspiracy for the purpose of grabbing the property in
violation of the order of injunction passed by the High Court.
The learned Single Judge entertained the contempt petition
E
against respondent Nos. 2 and 4 but declined to do so qua the
appellants by observing that no prima facie case had been
made out against those who were not parties to the suit.
Respondent No.1 also filed IA No.8146/1998 under Order 26
Rule 9 read with Order 39 Rule 7 and Section 151 CPC for
F
appointment of Local Commissioner and IA No.8147/1998
under Order 40 Rule 1 read with Section 151 CPC for
appointment of a receiver. The Court Commissioner appointed
by the High Court to ascertain whether respondent Nos. 2 and
4 were in possession of the suit property, submitted report G
dated 10.2.2000 with the finding that respondent No.4 was in
actual possession.
8. Respondent No.2 filed application dated 16.12.1998 for
vacating interim order dated 18.2.1993. He pleaded that the
agreement for sale executed in favour of respondent No.1 was,
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A
in fact, a loan agreement and the same was violative of Section
24 read with Section 23 of the Indian Contract Act, 1872. He
further pleaded that the agreement was void and unenforceable
because the requisite permission had not been obtained under
Section 269 UC of the Income-Tax Act. Respondent No.2 also
B
filed Suit No. 16111999 for grant of a declaration that sale
deeds executed in favour of the appellants were fictitious and
were not binding on him. After about 2 years, Shri Bhupinder
Singh, Advocate filed IA No. 255/2001 for withdrawal of the suit
on the ground that the parties have amicably settled their
c dispute. Soon thereafter, the advocate who had instituted the
suit, filed IA No.1537/2001 for restoration of the suit by
asserting that IA No.255/2001 had been filed by an advocate
who was not authorised to do so. The learned Single Judge
directed that the application be listed only after filing of an
D
affidavit by respondent No.2 that he had not authorised Shri
Bhupinder Singh, Advocate to file I.A. No.255/2001.
Respondent No.2 did not file the required affidavit till his death
and as a result, I.A. No.1537/2001 is said to be still pending.
9. Another front of litigation was opened by Bhagwati
E
Developers with the allegation that the appellants have failed
to execute the sale deed in terms of agreement dated
18.3.1997. The dispute between Bhagwati Developers and the
appellants was referred to the sole arbitration of Dr. Debasis
Kundu, an Advocate of the Calcutta High Court. The Arbitrator
F
passed award dated 7.1.1999 and directed the appellants to
hand over vacant possession of the suit property along with the
building to Bhagwati Developers on or before 31.1.1999 and
also execute the sale deed after securing requisite permission
and no objection certificate from the competent authorities.
G
Simultaneously, Bhagwati Developers was directed to pay the
balance amount of Rs.1,20,90,000/-.
10. As the appellants failed to act in consonance with the
arbitral award, Bhagwati Developers filed an application under
Section 36 of the Arbitration and Conciliation Act, 1996 in the
H
Calcutta High Court, which was allowed by the learned Single
VIDUR IMPEX AND TRADERS PVT. LTD. v. TOSH 321
APARTMENTS PVT. LTD. [G.S. SINGHVI, J.]
Judge of that High Court vide order dated 17.8.2000 and a A
direction was issued to the appellants to comply with the arbitral
award. The learned Single Judge also appointed Shri Nar
Narayan Ganguli, Advocate as receiver and directed him to
take possession of the suit property. When the receiver came
to Delhi for execution of the award, respondent No.4 refused
B
to hand over possession. Thereupon, the Calcutta High Court
directed the police authorities at Delhi to assist the receiver for
ensuring compliance of order dated 17 .8.2000. Armed with that
direction, the receiver visited Delhi on 19.1.2001 and 5.2.2001
and took symbolic possession of the suit property by putting c
locks and seals on all the inner and outer gates.
11. When the representative of respondent No.1 learnt
about the award of the arbitrator and the order passed by the
Calcutta High Court, he filed IA No.625/2001 in the Delhi High
Court under Order 39 Rules 1 and 2 read with Section 151
D
CPC impleading respondent Nos. 2 and 4, the appellants and
Bhagwati Developers as parties and prayed that respondent
Nos. 2 and 4 be restrained from handing over possession of
the suit property and that the appellants be restrained from
taking forcible possession in the garb of some order passed
E
by the Calcutta High Court. The learned Single Judge of the
Delhi High Court passed an ex-parte interim order dated
22.1.2001 and restrained respondent Nos. 2 and 4 from
delivering possession of the suit property to the appellants and
also restrained the latter from taking possession. Bhagwati
F
Developers challenged that order in FAO (OS) No.90/2001,
which was dismissed by the Division Bench of the High Court
on 2.3.2001 with liberty to approach the learned Single Judge
for appropriate order.
12. Respondent No.4 also filed IA No. 121112001 in the G
Delhi High Court for grant of injunction by alleging that an
attempt is being made to dispossess him in the garb of an
order passed by the Calcutta High Court. The learned Single
Judge passed ex-parte interim order dated 8.2.2001 and
restrained the appellants, Bhagwati Developers, the receiver H
322
SUPREME COURT REPORTS
[2012] 10 S.C.R.
A appointed by the Calcutta High Court and Delhi Police from
interfering with the possession of respondent No.4. Some of
the observations made in that order, which have bearing on the
disposal of these appeals, are extracted below:
8
c
D
E
F
G
H
"Quite clearly Respondents No.4 to 9 in this application
were aware of the fact that Defendant No. 1 had filed Suit
No.161199. A mention was made in the plaint in Suit No.
161199 that tne present suit, that is, Suit No.425193 was
pending in this Court. So, Respondents No.4 to in this
application were also aware of the pendency of this suit.
It appears that Respondents No.4 to 9 in this application
did not bother to find out the correct factual position with
regard to the possession of the suit property or with regard
to the interim orders passed by this Court.
Well before all this, and apparently expecting Defendant
No.1 to perform the Agreement to sell, these 6 persons
who are Respondents No.4 to 9 in this application entered
into an agreement to sell the suit property to Respondent
No.10 in this application.
There appear to have been some disputes between
Respondents No.4 to 9 in this application and Respondent
No.10 in the application in respect of the suit property.
Since there was an arbitration clause in the agreement
between them, they referred the matter to arbitration. The
learned Arbitrator gave an Award dated 7th January, 1999
wherein he directed Respondents No. 4 to 9 in this
application to hand over peaceful vacant possession of the
suit property to Respondent No.10 in this application. No
objections appear to have been filed to this Award with the
result that Respondent No.10 in this application filed
proceedings in the Calcutta High Court praying for a
direction for the appointment of a Receiver to take physical
possession of the suit property. The Calcutta High Court
passed an order apparently directing the Receiver to take
possession of the suit property. On 13th December, 2000
VIDUR IMPEX AND TRADERS PVT. LTD. v. TOSH
323
APARTMENTS PVT. LTD. [G.S. SINGHVI, J.]
the Calcutta High Court directed the police authorities to
A
render all assistance to the Receiver to take steps in
accordance with the earlier order passed by the Calcutta
High Court.
When the Receiver and the police authorities came to take
8
possession of the suit property, L.K. Kaul became aware
of the proceedings in the Calcutta High Court.
It is submitted that there has been gross concealment
and misrepresentation of facts by Defendant No. 1 in the
suit to Respondents No.4 to 9 in this application. There C
has also been gross misrepresentation and concealment
of fact by Respondents No.4 to 9 in this application to
Respondent No.10 in this application. It is also submitted
that there is also a gross concealment and, therefore, a
misrepresentation of facts by Respondents No.4 to 10 in D
this application insofar as the learned Arbitrator is
concerned. Consequently, there has also been a gross
concealment and, therefore, a misrepresentation of the
facts so far as Calcutta High Court is concerned. It is
submitted that had all these facts been brought to the E
notice of the concerned parties as well as to the teamed
Arbitrator and the Calcutta High Court, there would have
been no question of any appointment of a Receiver in
violation of the orders passed by this Court on 18th
February, 1993 read with order dated 31st January, 2000.
F
I am prima facie satisfied that Defendant No. 1 and
Respondents No.4 to 10 in this application are playing
a cat and mouse game with this Court. There has been
a serious concealment and misrepresentation of facts by
Defendant No. 1 in this suit. There has also been a G
serious concealment and misrepresentation of facts by
Respondents No. 4 to 9 in this application insofar as
Respondent No. 10 in this application is concerned.
Respondents No. 4 to 10 are at fault in not finding out
what the correct facts are and making necessary H
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[2012] 10 S.C.R.
A
enquiries in this regard. They appear to have
deliberately misled the learned Arbitrator and the
Calcutta High Court."
B
(emphasis supplied)
13. Respondent No.4 filed another application (IA No.
9576/2001) for restraining the appellants from executing the
sale deed in favour of Bhagwati Developers. The learned
Single Judge entertained the application and passed interim
order in terms of the prayer made. The same respondent filed
C
an application in EC No.10/2000 pending before the Calcutta
High Court and brought to the notice of that High Court, order
dated 8.2.2001 passed by the Delhi High Court in Suit No. 425/
1993. After taking cognizance of the rival submissions, the
learned Judge of the Calcutta High Court passed order dated
D
15.2.2001 and made it clear that the order passed by that
Court will be subject to the order which may be passed by the
Delhi High Court. The relevant portions of that order are
reproduced below:
E
F
G
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"The facts remain that these facts were neither disclosed
to the decree-holder nor to the Arbitrator and this question
was not necessary to be gone into while executing the
decree and, as such, it was also not placed before this
Court and this Court having not been apprised of such
facts had passed an order for taking over possession of
the property. In the order dated 8.2.2001 the Delhi High
Court had taken a note of this position. Be that as it may,
it is not necessary to make any observation with regard
to the findings made therein, nor this Court can comment
on the order passed by another Court on the basis of the
materials placed before it. But it appears that there is
every possibility of conflicting orders being passed in
respect of the self-same properties between the parties
or those claiming through one or the other of them by two
High Courts. Judicial propriety demands that the court
should maintain its decorum and dignity and should not
VIDUR IMPEX AND TRADERS PVT. LTD. v. TOSH
325
APARTMENTS PVT. LTD. [G.S. SINGHVI, J.]
pass any order which will lie in conflict with each other. It A
is the parties who may fight each other but not the Courts.
If some order is passed, it is expected that another Court
should pay proper regards and respect to such order.
Since it is pointed out that these facts were not disclosed
before this Court, therefore what would have been the
B
effect if these facts would have been disclosed before
this Court is a question which cannot now be presumed,
but in all probabilities it sees that if these facts were
disclosed before this Court, this Court might have been
slow in passing the order that had been passed earlier. c
Therefore, the order passed by this Court, if it is in conflict
with the order passed by the Delhi High Court, the same
shall always be subject to the order that might be passed
by the Delhi High Court.
Since Delhi High Court has also passed an order by which
D
certain direction was given to the Receiver appointed by
this Court, therefore, it is no more necessary to pass any
further order. In my view, the decree-holder in this
proceedings who is added as Defendant No.10 in the
Delhi High Court suit should approach the Delhi High
E
Court for obtaining the appropriate orders if he is so
advised. If there is a conflict of decree which might affect
a proceeding in another High Court, in that event the
same has to be thrashed out in an appropriate
proceeding. It is very difficult to enter into such question
F
in an execution proceeding unless such question be raised
in a proceeding under Order XXI Rule 97 C.P.C. From the
records of this Court, it does not appear that any such
application under Order XXI Rule 97 has ever been made
in order to enable the parties to resisting possession in
G
execution of the decree, so that they would have an
opportunity to place their cases about the executability of
the decree against them."
(emphasis supplied)
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[2012] 10 S.C.R.
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14. Thereafter, Bhagwati Developers filed IA No. 2268/
2003 in Suit No.425/1993 pending before the Delhi High Court
with the prayer that the receiver appointed by the Calcutta High
Court be continued. Respondent No.1, who had already filed
IA No.8147/1998 for appointment of receiver, contested the
B application of Bhagwati Developers by asserting that it had no
locus standi in the matter because the agreement by which it
purchased the property from the appellants was fraudulent in
nature. Respondent No.1 also reiterated its prayer for
appointment of a receiver by the Delhi High Court by contending
c that respondent No.4 was a ranked trespasser and there was
every possibility of his entering into clandestine deals and
alienating the property. On his part, respondent No.4 pleaded
that his possession was lawful because respondent No.2 had
put him in possession in furtherance of the agreement executed
D in 1992.
15. At this stage, we may mention that respondent No.4
also filed ~A No.7373/2006 in Suit No.425/1993 for grant of
leave to amend the written statement by incorporating the fact
that respondent No.2 had agreed to pay Rs.4 crores as service
E charges for getting the property vacated from the Sudan
Embassy with a stipulation that in the event of non-payment of
the amount, vacant and peaceful possession of the suit property
will be handed over to him; that even though he got the property
vacated from the Sudan Embassy, respondent No.2 did not
F pay the amount and handed over possession of the property
as security for the same. Respondent No.4 claimed that these
facts could not be incorporated in the original written statement
because his earlier lawyer thought that the same were not
necessary for deciding the suit filed by respondent No.1 for
G specific performance and permanent injunction. Respondent
No.4 also sought incorporation of the fact that the property had
been mortgaged to him and he was in possession as a
mortgagee. Respondent No.1 opposed the prayer for
amendment by asserting that respondent No.4 was seeking to
H make out a new case which was contrary to the defence set
VIDUR IMPEX AND TRADERS PVT. LTD. v. TOSH
327
APARTMENTS PVT. LTD. [G.S. SINGHVI, J.]
up in the original written statement.
16. By an order dated 3.9.2007, the learned Single Judge
of the Delhi High Court dismissed IA No. 2268/2003 and IA No.
7373/2006 and allowed IA No.8147/1998. He first considered
A
the applications filed by respondent No.1 and Bhagwati
Developers in the matter of appointment of receiver and held:
8
"26. Undoubtedly the initial agreement to sell is between
the plaintiff and defendant No.I (since deceased) now being
represented by his legal heirs. However, yet another
agreement to sell come into existence on 18th March, C
1977 between Bhagwati Developers Private Limited and
respondents 4 to 9 by which 6 companies agreed to sell
the said property in favour of Bhagwati Developers with
arbitration clause contained in the agreement and that
dispute shall be subject to the jurisdiction of Calcutta High
D
Court.