TaxTMI 
TaxTMI 
2010 (7) TMI 1181
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....within 2-3 months the defendants will handover vacant physical possession of the above property to the plaintiff. b) The plaintiff will reconstruct the above property from his own money/funds with three storeys i.e. ground floor, first floor and second floor. c) Out of the said reconstructed three storeyed building, the plaintiff shall be entitled to own and possess the ground floor; and the first and second floors will be owned and possessed by the defendants. d) Besides bearing the expenses of construction and furnishing etc. of the proposed three storeyed building, the plaintiff shall also pay a sum of Rs. 3,71,000/- to the defendants at the time of handing over possession of the above house for reconstruction. e) Out of the agreed consideration of Rs. 3,71,000/-, a sum of Rs. 51,000/- was paid to the defendants in cash and the remaining consideration of Rs. 3,20,000/- was to be paid to the defendants at the time of handing over possession of the above house for reconstruction. In token of the same a Receipt for Rs. 51,000/- was duly executed by defendant No. 1. f) On getting conversion of the above property from leasehold to freehold, the above agreement/proposed coll....
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.... d) out of the said reconstructed three storeyed building the plaintiff shall be entitled to own and possess its ground floor only, and the first and second floors will be owned and possessed by the defendants. e) besides to bear the expenses of construction etc. of the proposed 3 storeyed complete building, the plaintiff shall also pay a sum of Rs. 3,20,000/- to the defendants at the time of handing over possession of the above house for reconstruction. f) the defendants will not transfer the title or possession of the suit property till execution of the collaboration Agreement but after its execution, the defendants would be within their full rights to enjoy lawfully the title and possession of the first floor and second floor of the building. g) the plaintiff will be fully entitled for the full title and possession of the ground floor of the building and the defendants would be left with no right, title or interest in the property of the ground floor of the building, however, he would not be entitled for any exclusive rights in the property of ground floor till the first and second floor of the building are duly constructed, as per the specifications and quality as that o....
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....annot be silent spectators to the parties being put on such unequal footing. The remedy of defendants suing the plaintiffs for damages caused to them, after succeeding in the present suit is not efficacious. Affluent speculators in immovable properties cannot be permitted to misuse the process of the court to compel owners to transact with them only. In the circumstances, it is deemed expedient to direct the plaintiff to file an affidavit/undertaking to this Court to, in the event of not succeeding in the suit pay a sum of Rs. 25 lacs by way of damages to the defendants. If the plaintiff is reasonably confident of the genuineness of his case, the plaintiff ought not to suffer any harm by giving such undertaking. The said amount has been arrived at because of the averments in the plaint that the plaintiff was to spend Rs. 20 lacs in development of the property and in lieu thereof was to become the owner of the ground floor of the newly constructed property. The plaintiff to file the affidavit in terms of above within four weeks from today. List on 27th January, 2009 for framing of issues. (emphasis supplied) 5. The appellant filed an intra-court appeal contending that every pers....
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....s and interlocutory orders. Order 39 Rule 2(2) authorizes the court to grant injunction on such terms as deems proper including giving of security. Thus, when the prayer for interim relief has to be granted, provision has been specifically made authorizing the court to make orders for keeping accounts, giving security or otherwise as the court thinks fit. The appellant has conveniently not filed an interim application to avoid the rigour of such an order. Normally in a suit for specific performance and that too dealing with an immovable property, a party would seek interim protection. The appellant has not done so. It is an ingenious method of keeping a suit alive without claiming interlocutory relief and creating a cloud over a property in view of the provisions of Section 52 of Transfer of Property Act. We do think that the courts cannot look helplessly at such tactics and ignore the problem of huge docket, which arises on account of meritless claims being filed. The heavy docket does not permit early disposal of suits and thus parties may take advantage of keeping frivolous claims alive. We also cannot ignore the ground realities of the market which would persuade third part....
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....t, he shall pay Rs. 25 lakhs (or any other sum) by way of damages to the defendant? 8. We are broadly in agreement with the High Court that on the material presently on record, the likelihood of appellant succeeding in the suit or securing any interim relief against the defendants is remote. We may briefly set out the reasons therefor. 8.1 It is doubtful whether the collaboration agreement, as alleged by the appellant, is specifically enforceable, having regard to the prohibition contained in Section 14(1)(b) and (d) of the Specific Relief Act, 1963. The agreement propounded by the appellant is not an usual agreement for sale/transfer, where the contract is enforceable and if the defendant fails to comply with the decree for specific performance, the court can have the contract performed by appointing a person to execute the deed of sale/transfer under Order XXI Rule 32(5) of the Code of Civil Procedure ('Code' for short). The agreement alleged by the appellant is termed by him as a commercial collaboration agreement for development of a residential property of the respondents. Under the alleged agreement, the obligations of the respondents are limited, that is, to apply ....
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....is also a bar in regard to award of any compensation under Section 21 of the Specific Relief Act. 8.2 The appellant claims to be a builder and real estate dealer. If the appellant entered into a collaboration agreement orally with numerous details as set out in the plaint (extracted in Para (2) above) and could secure a receipt in writing for Rs. 51,000/-, nothing prevented him from reducing the said terms of the alleged collaboration agreement in the form of an agreement or Memorandum of Understanding and have it signed by the owners of the property. No reason is forthcoming as to why that was not done. 8.3 The property stands in the name of second respondent (Defendant No. 2), but she did not sign the receipt. There is nothing to show that the second respondent participated in the alleged negotiations or authorized her husband-the first respondent to enter into any collaboration agreement in respect of the suit property. The receipt is not signed by the first respondent as Attorney Holder or as the authorized representative of the owner of the property. From the plaint averments it is evident that appellant did not even know who the owner was, at the time of the alleged negotia....
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....ther in such a situation, the High Court could have issued the impugned interim direction. 10. Every person has a right to approach a court of law if he has a grievance for which law provides a remedy. Certain safeguards are built into the Code to prevent and discourage frivolous, speculative and vexatious suits. Section 35 of the Code provides for levy of costs. Section 35A of the Code provides for levy of compensatory costs in respect of any false or vexatious claim. Order 7 Rule 11 of the Code provides for rejection of plaint, if the plaint does not disclose a cause of action or is barred by any law. Order 14 Rule 2 of the Code enables the court to dispose of a suit by hearing any issue of law relating to jurisdiction or bar created by any law, as a preliminary issue. Even if a case has to be decided on all issues, the court has the inherent power to expedite the trial/hearing in appropriate cases, if it is of the view that either party is abusing the process of court or that the suit is vexatious. The court can secure the evidence (examination-in-chief) of witnesses by way of affidavits and where necessary, appoint a commissioner for recording the cross examination so that it ....
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....ere authorizes or empowers the court to issue a direction to a plaintiff to file an undertaking to pay damages to the defendant in the event of being unsuccessful in the suit. The Code also does not contain any provision to assess the damages payable by a plaintiff to defendant, when the plaintiff's suit is still pending, without any application by defendant, and without a finding of any breach or wrongful act and without an inquiry into the quantum of damages. There is also no contract between the parties which requires the appellant to furnish such undertaking. None of the provisions of either TP Act or Specific Relief Act or any other substantive law enables the court to issue such an interim direction to a plaintiff to furnish an undertaking to pay damages. In the absence of an enabling provision in the contract or in the Code or in any substantive laws a court trying a civil suit, has no power or jurisdiction to direct the plaintiff, to file an affidavit undertaking to pay any specified sum to the defendant, by way of damages, if the plaintiff does not succeed in the suit. In short, law does not contemplate a plaintiff indemnifying a defendant for all or any losses sustain....
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....ld: ...that the inherent powers are not in any way controlled by the provisions of the Code as has been specifically stated in Section 151 itself. But those powers are not to be exercised when their exercised may be in conflict with what had been expressly provided in the Code or against the intentions of the legislature. 13.3 In Ram Chand and Sons Sugar Mills Pvt. Ltd. v. Kanhayalal Bhargav AIR 1966 SC 1899 this Court reiterated that the inherent power of the court is in addition to and complementary to the powers expressly conferred under the Code but that power will not be exercised if its exercise is inconsistent with, or comes into conflict with any of the powers expressly or by necessary implication conferred by the other provisions of the Code. Section 151 however is not intended to create a new procedure or any new right or obligation. In Nainsingh v. Koonwarjee AIR 1970 SC 997, this Court observed: Under the inherent power of Courts recognized by Section 151 CPC, a Court has no power to do that which is prohibited by the Code. Inherent jurisdiction of the Court must be exercised subject to the rule that if the Code does contain specific provisions which would meet th....
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....erned by the Code, no court can, merely because it considers it just and equitable, issue directions which are contrary to or not authorized by law. Courts will do well to keep in mind the warning given by Benjamin N. Cardozo in The Nature of the Judicial Process: (Yale University Press -1921 Edition Page 114): The Judge even when he is free, is still not wholly free. He is not to innovate at pleasure. He is not a knight-errant roaming at will in pursuit of his own ideal of beauty or of goodness. He is to draw his inspiration from consecrated principles. He is not to yield to spasmodic sentiment, to vague and unregulated benevolence. He is to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to "the primordial necessity of order in social life. The High Court can certainly innovate, to discipline those whom it considers to be adventurers in litigation, but it has to do so within the four corners of law. 16. This case reminds us of the adage: "Hard cases make bad law". Black's Law Dictionary defines a 'hard case' thus: "A law suit involving equities that tempt a judge to stretch or even disregard a principle o....
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....d under Section 14(1)(b) and (d) of the Specific Relief Act, or because it decides not to exercise discretion to grant specific performance under Section 20(2) of the Specific Relief Act, should the plaintiff be made liable to pay Rs. 25 lakhs as compensation to the defendants? 18. The attempt of the Division Bench to support the order of the learned Single Judge with reference to Order XXV Rule 1 of the Code is clearly erroneous. The said provision, as noticed above, only enables the court to require the plaintiff to furnish security for payment of costs incurred or likely to be incurred by the defendant. 19. If the High Court felt that the prayer in the suit was vexatious or not maintainable, it could have considered whether it could reject the suit under Order 7 Rule 11 of the Code holding that the plaint did not disclose the cause of action for grant of the relief sought or that the prayer was barred by section 14(1)(b) and (d) of the Specific Relief Act. Alternatively, the court could have framed issues and heard the issue relating to maintainability as a preliminary issue and dismiss the suit if it was of the view that it had no jurisdiction to grant specific performance as....
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....operty or the consequential acquisition of any right, title or interest, during the pendency of the suit will be subject to the decision in the suit. 21. The principle underlying Section 52 of TP Act is based on justice and equity. The operation of the bar under Section 52 is however subject to the power of the court to exempt the suit property from the operation of section 52 subject to such conditions it may impose. That means that the court in which the suit is pending, has the power, in appropriate cases, to permit a party to transfer the property which is the subject-matter of the suit without being subjected to the rights of any part to the suit, by imposing such terms as it deems fit. Having regard to the facts and circumstances, we are of the view that this is a fit case where the suit property should be exempted from the operation of Section 52 of the TP Act, subject to a condition relating to reasonable security, so that the defendants will have the liberty to deal with the property in any manner they may deem fit, inspite of the pendency of the suit. The appellant-plaintiff has alleged that he is a builder and real estate dealer. It is admitted by him that he has entere....
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....plaintiff sued him without cause; costs are thus in the nature of incidental damages allowed to indemnify a party against the expense of successfully vindicating his rights in court and consequently the party to blame pays costs to the party without fault. These principles apply, not merely in the award of costs, but also in the award of extra allowance or special costs. Courts are authorized to allow such special allowances, not to inflict a penalty on the un-successful party, but to indemnify the successful litigant for actual expenses necessarily or reasonably incurred in what are designated as important cases or difficult and extraordinary cases. In Salem Advocate Bar Association v. Union of India 2005 (6) SCC 344 this after noticing that the award of costs is in the discretion of the court and that there is no upper limit in respect of the costs awardable under Section 35 of the Code, observed thus: Judicial notice can be taken of the fact that many unscrupulous parties take advantage of the fact that either the costs are not awarded or nominal costs are awarded against the unsuccessful party. Unfortunately, it has become a practice to direct parties to bear their own costs....
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.... the costs should be a deterrent, to a citizen with a genuine or bonafide claim, or to any person belonging to the weaker sections whose rights have been affected, from approaching the courts. 24. At present these goals are sought to be achieved mainly by sections 35, 35A and 35B read with the relevant civil rules of practice relating to taxing of costs. Section 35 of the Code vests the discretion to award costs in the courts. It provides that normally the costs should follow the event and court shall have full power to determine by whom or out of what property, and to what extent such costs are to be paid. Most of the costs taxing rules, including the rules in force in Delhi provide each party should file a bill of cost immediately after the judgment is delivered setting out: (a) the court fee paid; (b) process fee spent; (c) expenses of witnesses; (d) advocate's fee; and (e) such other amount as may be allowable under the rules or as may be directed by the court as costs. We are informed that in Delhi, the advocate's fee in regard to suits the value of which exceeds Rs. 5 lakhs is: Rs. 14,500/- plus 1% of the amount in excess of Rs. 5 lakhs subject to a ceiling of Rs. 50....