Remanded

M/S Sampada Enterprises v. M/S Tgs Construction Private Limited

Karnataka HC15 Jun 2021RFA/66/2021

Case brief

AI extract

What is this about?

This appeal concerns a partly-decreeed suit for cancellation of a Joint Development Agreement and damages. The High Court allowed the appeal, holding the dismissal of specific prayers was unjustified due to an inadvertent failure to produce the full agreement. The Court remanded the matter for retrial of those issues.

What did the court decide?

Appeal allowed; matter remanded to trial court to reconsider declaration and damages claims after full JDA is produced and fresh notice issued.

M/S Sampada Enterprises Vs M/S Tgs Construction… — Specific Performance | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 15^TH DAY OF JUNE, 2021

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PRESENT

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THE HON’BLE MR.JUSTICE ARAVIND KUMAR

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AND

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THE HON’BLE MR.JUSTICE N.S.SANJAY GOWDA

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R.F.A.No.66/2021(DEC)

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BETWEEN:

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M/S SAMPADA ENTERPRISES, REGISTERED PARTNERSHIP FIRM HAVING ITS OFFICE AT G-16, RAVI HILL VIEW LAYOUT, ITTAMADU, BSK III STAGE, BENGALURU – 560 085 REPRESENTED BY ITS PARTNER, J.PRAVEEN KUMAR SINGH, SON OF SRI. G.JAYAPAL SINGH, AGED ABOUT 47 YEARS, RESIDING AT No.FF-1, SUMUKHA ENCLAVE, No.1, 1^ST MAIN, 1^ST CROSS, VIVEKANANDA NAGAR, BENGALURU – 560 085. … APPELLANT

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(BY SRI. ASHOK HARANAHALLI, SENIOR COUNSEL FOR SRI. VENKATESH S.ARABATTI, ADV.)

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AND:

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M/S TGS CONSTRUCTION PRIVATE LIMITED, HAVING ITS OFFICE AT No.142, GROUND FLOOR, 5^TH AVENUE,

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5^TH MAIN, 6^TH SECTOR, HSR LAYOUT, BENGALURU – 560102 REPRESENTED BY ITS MANAGING DIRECTOR, DR. MANDEEPKAUR. … RESPONDENT

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(VIDE ORDER DATED:24.02.2021, NOTICE TO RESPONDENT IS DISPENSED WITH)

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THIS APPEAL IS FILED UNDER SECTION 96 OF THE CPC, AGAINST THE JUDGMENT AND DECREE DATED 15.10.2020 PASSED IN O.S.No.1546/2019 ON THE FILE OF THE V ADDL. CITY CIVIL AND SESSIONS JUDGE BENGALURU, PARTLY DECREEING THE SUIT FOR DECLARATION AND DAMAGES.

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THIS APPEAL COMING ON FOR DICTATING JUDGMENT THIS DAY, SANJAY GOWDA , J. , DELIVERED THE FOLLOWING:

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JUDGMENT

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The appellant is the plaintiff.

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The appellant filed a suit seeking for a declaration that the registered Joint Development Agreement (JDA) dated 09.11.2015 executed by the plaintiff in favour of the defendant as cancelled. A declaration was also sought for that plaintiff was the absolute owner of the suit schedule property and a direction to the defendant to pay damages in a sum of `95,00,000/- was also sought for. Lastly, the appellant sought for a declaration that all the agreements

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entered into by the defendant in respect of the suit schedule property were not binding on the plaintiff.

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The facts stated in the plaint was that the plaintiff, a registered Partnership Firm was the owner of the property bearing No.21/2 formed in Sy.No.21 measuring 18,833 sq. ft. situated at Pattanagere Village, Kengeri Hobli, Bengaluru South Taluk. It was stated that the plaintiff had purchased the said property under a registered Sale Deed dated 07.10.2013. It was also stated that permission had been obtained from the Deputy Commissioner for using the land for non-agricultural purposes.

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It was stated that the plaintiff had decided to develop the suit property by way of a joint development with the defendant, whereby a multistoried residential complex was agreed to be constructed by the defendant and the plaintiff and defendant would share the apartments in the ratio of 42% and 58%. In other words, the plaintiff was to be given constructed area of 42%, while the defendant, who would undertake to construct the complex at its own cost, would

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get 58% of the constructed area. In addition, it was stated that under the agreement, the defendant had paid the plaintiff a sum of 52,00,000/- as goodwill and it had also paid a sum of 45,00,000/- as refundable security deposit. In other words, a total sum of `97,00,000/- was paid by the defendant to the plaintiff as per the averment in the plaint. It was stated that the terms of the JDA were recorded in writing and also registered as a Joint Development Agreement dated 09.11.2015.

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It was stated that though a sanctioned plan had been obtained from the BBMP and handed over to the defendant and a General Power of Attorney (GPA) had also been executed in favour of the defendant as per the terms of the JDA, defendant did not undertake any work except some excavation work. It was stated that since the defendant failed to start the development of the property, the plaintiff was forced to issue numerous reminders asking him to discharge its obligations under the JDA. However, the said request were of no avail and consequently, the plaintiff was constrained to issue a notice dated

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14.12.2016 proposing to cancel the GPA executed in favour of the defendant. It was stated that public notice regarding cancellation of GPA was also published on 16.12.2016 and thereafter, the plaintiff had revoked the GPA executed in favour of the defendant by execution of a registered cancellation deed on 28.12.2016. It was stated that the defendant was avoiding the plaintiff and had refused to compensate the damages suffered by the plaintiff. Consequently, left with no other alternative, the plaintiff was constrained to file a suit seeking for the aforementioned reliefs.

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On suit being registered, summons were ordered to be issued to the defendant. However, the said summons sent through Court and by registered post were returned with an endorsement that ‘the defendant had vacated the address’. Substituted service was also taken out by way of paper publication and even to this, there was no response and consequently, defendant came to be placed ex parte.

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The plaintiff, in order to prove his case, examined one of its partners as P.W.1 and through her, got exhibited nine documents.

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Trial Court thereafter framed the following points for consideration:

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“1. Whether the Plaintiff firm proves its title and possession over the suit schedule property as on the date of the suit?

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Whether the plaintiff further proves that registered General Power of Attorney dated 09/11/2015 came to be cancelled in accordance with terms of JDA dated 09/11/2015?

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Whether registered JDA dated 09/11/2015 is liable to be cancelled?

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Whether the plaintiff is entitled for the relief of damages?

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Whether the plaintiff is entitled for the relief as sought for?

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What Order or decree?”

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Trial Court, on consideration of the evidence, arrived

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at a conclusion that plaintiff had proved that it had title

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over the suit schedule property. However, it came to be held that plaintiff had not proved that the registered GPA

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had been cancelled in accordance with the registered terms of the JDA and it also came to the conclusion that JDA was not liable to be cancelled. Trial Court also held that plaintiff was not entitled for the relief of damages and it proceeded to decree the suit in part.

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Trial Court in conclusion has held that plaintiff was the absolute owner of the suit schedule property. However, it held that plaintiff was not entitled to the relief of declaration that JDA was cancelled; declaration that plaintiff was not bound by the agreements entered into by the defendant in respect of the suit schedule property and for damages and has accordingly passed the decree.

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Being aggrieved by the dismissal of the prayer for declaration that the JDA was cancelled, the plaintiff was not entitled for damages and the declaration that the plaintiff was not bound by the agreements entered into by the defendant in respect of the suit schedule property, the appellant is in appeal.

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In this appeal, the learned Senior Counsel Sri Ashok Haranahalli appearing for the appellant contended that the Trial Court has fundamentally arrived at a conclusion that the suit was liable for dismissal in respect of the prayer for declaration and damages only on the ground that the plaintiff had not produced page Nos.19 and 20 of the JDA and this according to the Trial Court was a deliberate suppression of material facts which disentitled the plaintiff from any relief. He submitted that non production of two pages of the JDA was an inadvertent error and the appellant had in fact filed an application in this appeal seeking for permission to produce the entire JDA. He submitted that since the entire JDA had now been produced, including the missing pages, the decree could not be sustained.

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In this appeal, since the respondent was placed ex parte in the Court below, notice of this appeal was dispensed with as provided under Order XLI Rule 14 of CPC.

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We have heard the learned Senior Counsel appearing

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for the appellant and perused not only the Trial Court records but also the entire material produced before us.

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The points that arise for consideration in this appeal

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are:

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(i) Whether the Trial Court was justified in dismissing the suit in respect of the remaining two declaratory prayers and damages sought for principally on the ground that entire JDA had not been produced?

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(ii) Whether the prayer of the appellant for production of entire JDA including the missing pages could be admitted as additional evidence in this appeal?

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Whether I.A.1/2021 filed by appellant for production of JDA dated:09.11.2015 (marked as Ex.P.1) deserves to be allowed?

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As stated above, the simple case of the appellant was that it had entered into a JDA on 09.11.2015 with the defendant with the objective of ensuring a multistoried

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apartment complex was constructed on the suit schedule property at the cost of the defendant and after the apartments were constructed, the plaintiff and the defendant would share the constructed area in the ratio of 42% and 58% respectively.

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It was the case of the plaintiff that the defendant did not undertake any work and it was therefore constrained to issue a notice to cancel the GPA and since there was no response even thereafter, it was constrained to file the suit.

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It is not in dispute that the defendant was served with the summons in the Trial Court through substituted service namely paper publication, but chose to remain absent and was therefore placed ex parte . It is therefore clear that claim made by the plaintiff remained unchallenged.

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However, Trial Court proceeded to decree the suit partly for the following reasons:

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“17. In this regard, on perusal of Ex.P.1 certified copy of JDA dated 09/11/2015 we can find that though plaintiff has sought the relief

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of declaration to cancel the alleged JDA dated 09/11/2015 as per prayer column No.i of the plaint, the plaintiff has not furnished complete document i.e. complete copy of JDA, because the relevant and important paragraphs from para 19 to 24 i.e. page 19 and 20 of the said document are not available in Ex.P.1, which indicates that plaintiff has deliberately suppressed the material facts before this court and not come to the court with clean hands. Even otherwise if we go through in continuation of para 24.b of Ex.P.1 abundantly makes it clear that the said agreement shall not be terminated unilaterally by any of the parties herein and appointment of the builder shall be irrevocable till the completion of the project.

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It is to be noticed that unilateral contract means-in which only one party makes an express promise or undertakes a performance without first securing a reciprocal agreement from the other party. So an unilateral contract differs from a bilateral contract, in which the parties exchange mutual promises and commonly used in business transactions. In this connection as could be seen from perusal of Ex.P.6 and 7 that though the plaintiff firm got issued legal notice by notifying about the decision to revoke and cancel the GPA executed by the plaintiff firm dated 09/11/2015 (wrongly mentioned in para 2 as 09/11/2016) and it is revoked, but no bit of document viz., postal acknowledgment for having served notice with intimation to the decision of cancellation of GPA is forth coming before this court. Ex.P.9 is nothing but public notice issued in a daily news paper dated 20/12/2016, but again Ex.P.5 cancellation of GPA also does not disclose the participation of the defendant M/s TGS constructions Pvt. Ltd., which also would indicate that the said registered cancellation of GPA is nothing but unilateral and not bilateral, one sided and

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contrary to the terms and conditions of Ex.P.1 JDA dated 09/11/2015.”

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As could be seen from the aforesaid reasoning, Trial

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Court was of the view that the relevant and most important pages i.e., page Nos.19 and 20 containing paragraphs 19 to 24 of the JDA had not been produced along with certified copy of JDA marked as Ex.P.1 and therefore this indicated that the appellant had deliberately suppressed material fact before the Court and he had not come to the Court with clean hands.

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The appellant, in this appeal, has produced the entire JDA along with an application seeking permission to produce it as additional evidence. We have perused the entire agreement and we have noticed that the missing pages i.e., page Nos.19 and 20 containing paragraphs 19 to 24 are also produced in this appeal. We are of the view that non production of two pages, which was an obvious inadvertent error, was not a reason for which, the Trial Court could have penalized the plaintiff by dismissing the other two declaratory prayers and also the claim for

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damages itself. In our considered view, the Trial Court could have called upon the plaintiff to produce the missing pages and if the same had not been produced then it could have proceeded to dismiss the suit. However, the Trial Court has not chosen to follow this path and this has caused serious prejudice to the appellant.

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We are of the view this inadvertent error on the part of the plaintiff-appellant should not have resulted in nonconsideration of the claim of the plaintiff for a declaration that the JDA was cancelled. Further, non-production of JDA with two missing pages being an inadvertent error on the part of the appellant which is now sought to be rectified by filing an application seeking for permission to produce the entire JDA, we are of the view that the said application deserves to be allowed and the same is accordingly allowed. Consequently point No.2 formulated is answered in the affirmative namely in favour of appellant.

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As a consequence of the entire JDA having been produced before this Court, in our view, it would be just and necessary to remand the matter to the trial court since trial court has proceeded on the footing non production of the entire JDA had created an impression that plaintiff had suppressed material facts, which in turn, disentitled the plaintiff for consideration of three of its claims. The error of not producing the entire JDA having been rectified by production of the entire JDA in this appeal thus entitles the appellant to an order of remand with a direction to the trial court to reconsider the remaining tow declaratory prayers and the claim for damages afresh and come to an appropriate conclusion in accordance with law.

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We accordingly answer both the points of determination in favour of the appellant and hold that the judgment and decree of the trial court insofar as the dismissal of the suit in relation to the remaining two declaratory prayers and claims for damages cannot be sustained.

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We make it clear that we are not expressing any opinion on the merits of the case. We also make it clear that trial court shall issue a fresh notice to the defendant/respondent and thereafter decide the matter in accordance with law.

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Thus, we hereby allow this appeal, set aside the impugned judgment and decree dated:15.10.2020 passed in O.S.No.1546/2019 on the file of the V Additional City Civil and Sessions Judge, Bengaluru and remand the matter to the trial court with a direction to the trial court to permit the appellant to produce the entire JDA dated 09.11.2015 as an exhibit and then consider the matter afresh in accordance with law after issuing fresh summons to the defendant. The appellant shall also be permitted to adduce further evidence, if it so desires.

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It is however made clear that the decree of the suit insofar as grant of declaration that the plaintiff was the owner of the suit property remains unaffected by this order.

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In view of the this order of remand, the appellant would be entitled for refund of the entire Court fee as provided under Section 66 of the Karnataka Court Fees and Suits Valuation Act. Registry to issue cheque in favour of the appellant forthwith.

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The appellant shall appear before trial court on 12.07.2021 without expecting a notice and shall take further instruction from the Trial court.

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Sd/JUDGE

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Sd/JUDGE

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PKS

M/S Sampada Enterprises v. M/S Tgs Construction Private Limited

Case brief

What is this about?

What did the court decide?

M/S Sampada Enterprises v. M/S Tgs Construction Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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