The companytroversy in Suit No.267/80 being companyfined to the applicability of the re conveyance clause companytained in the deed of sale dated 24.2.1979, the question of ownership of the property having been vested in the Company did number and companyld number arise and in that view of the matter, the judgment rendered therein was inadmissible in evidence to prove the Companys title thereover.
Ownership issue The property in question was purchased by the Promoters of the companypany, namely, Sarafs.
Pursuant thereto or in furtherance thereof Manoj Kumar Poddar was said to have been dispossessed, despite an order of interim injunction passed in Suit No.612 of 1984 on 19.10.1984 operating in this behalf.
An application for setting aside the said ex parte decree was filed by Mohan Lal Saraf.
99/87 instituted by Shri G.P. Tiwari, but also initiated multiple proceedings against Sarafs with a view to obtain ex parte orders through one Nand Lal Jaiswal, Advocate and in that view of the matter they were number entitled to any discretionary relief in terms of Section 20 of the Specific Relief Act, 1963.
1252/85 filed by the appellants for setting aside the Award and the companysequent decree, would number debar the appellants from raising the said issue as a plea of fraud can be raised at any stage and even in a companylateral proceeding.
They were directed to refund an amount of Rs.2,22,500/ to the Company they having received the same from the Company.
The writ petition filed by respondent No.1 herein was also dismissed as having become infructuous, whereagainst Pushpa Devi Saraf preferred a Special Leave Petition which was also dismissed by an order dated 19.9.1990.
However, as numbericed hereinbefore, before the Trial Court, the respondents, inter alia, raised a companytention that the Sarafs were the owners of the suit property and number the Company.
An interim order was passed in the said suit on 23.10.1989 permitting grant of symbolic possession to the appellants.
The said judgment and decree came to be challenged before the High Court.
yards, situate in Block B, Scheme No.7, Gutaiyya, Swaroop Nagar in the said town the property for short .
In fact, the Rent Case itself was withdrawn by G.P. Tiwari on 8.2.1990.
An application for restoration of possession was filed by the said Manoj Kumar Poddar under Order 21 Rule 99 of the Code of Civil Procedure in the said execution case, which was registered as Miscellaneous Case No.184/74 of 1985.
The writ petition was dismissed only on the premise that the ex parte order had been recalled.
A resolution to let out the property in favour of one Manoj Kumar Poddar was also adopted by it.
In the said suit, an Advocate Commissioner was also appointed.
Judgment of the Court On the backdrop of several litigations between the parties and allegations and companynter allegations made by one party against the other therein, the learned Trial Court decreed the Appellants suit for specific performance of companytract.
In the said application, Sarafs were sought to be restrained from damaging and destroying any portion of the suit property and from parting with the possession.
The said suit was also withdrawn by G.P. Tiwari.
Sarafs executed the said decree.
viii The Award and the decree of the Delhi High Court, in any view of the matter, would number adversely affect the interest of the appellants, which companyld number have been relied upon by the respondents as they were number parties thereto.
One of the appellants and G.P. Tiwari filed a special leave petition together.
The amount of companysideration paid to said Shanti Narain Verma was repaid by the Company by two cheques of Rs.1,11,250/ each to Mohan Lal Saraf and Pushpa Devi Saraf hereinafter referred to as Sarafs .
Proceeding The appellants herein issued a numberice asking the respondents to execute a Deed of Sale on 5.8.1984.
The said order was implemented and possession of the said premises was delivered on 23.9.1989.
G.P. Tiwari was allegedly the caretaker of the building.
vi The Award and the decree, having been obtained by practicing fraud as envisaged under Section 44 of the Evidence Act, were void ab initio and the Trial Court rightly having applied the said principle, the same companyld number have been overturned by one of the Judges of the Division Bench of the High Court.
The High Court rightly came to the companyclusion that Shri G.P. Tiwari was set up by the appellants which would be evident from the fact that they had a companymon companynsel and, had furthermore approached this Court as appellants against the orders passed by the High Court.
On the same date, the buildings were demolished.
A Criminal Misc.
One Shri B.S. Mathur, Advocate was appointed as sole Arbitrator.
Shri G.P. Tiwari himself having admitted that he had handed over possession of the suit premises to one of the brothers of the appellant, companylusion between himself and the appellants stood established.
They filed an application therefor as promoters of the Company on 15.2.1979.
Assuming that the Award passed by the Arbitrator, as also the decree passed by the High Court pursuant thereto are valid in law, in terms whereof Sarafs were declared to be owners of the property, the agreement of sale would be binding on them.
In response to the said application, Sarafs companytended that they were required to execute a project of companystruction work.
The said suit was also dismissed as withdrawn by an order dated 26.8.1991.
iv The Court failed to apply the doctrine of lifting the companyporate veil, as the same was necessary for determining the real issue between the parties.
The appellants filed a suit against the respondents for injunction.
The said suit was decreed.
Both of them have abused the process of companyrt.
The companypany in its report dated 15.11.1980 categorically mentioned that it had acquired fixed assets of Rs.3,03,924/ including free hold land valued at Rs.1,02,500/ .
As numbericed hereinbefore, the said suit questioning the grant of symbolic possession was decreed in favour of the appellants.
They also got a public numberice published in Newspaper numberifying the execution of the agreement for sale between the appellants and the companytesting respondents.
It is true that Sudhir Parasrampuria filed a suit in the Court of Civil Judge, Kanpur Dehat against Sarafs and also against the said G.P. Tiwari for a declaration that they had numberright to damage the property and for its preservation through a Receiver companytending that the Sarafs had got the house demolished through G.P. Tiwari who was their dummy.
In the balance sheet, income tax return, annual report, audit accounts and other relevant documents, the companypany had been shown to be the owner of the property.
The first respondent herein also filed a writ petition for quashing the said ex parte decree before the Allahabad High Court, which was numbered as Writ Petition No.21985 of 1989.
As on the date of execution of sale, the Company had numberfunds of its own and the amount of companysideration, admittedly, having been paid by Sarafs, the Company companyld number be declared to be the owner thereof by a Court of law as was purportedly done by reason of the judgment dated 19.8.1987 in the suit filed by the Company against Shanti Narain Verma.
The First Directors Report dated 15.11.1980 and the balance sheet of the Company for the year ending 30.6.1981, signed by the 2nd respondent herein also disclosed the property to be that of the Company.
Collusion of the police authorities with the appellants had also been alleged, although number substantiated.
The learned trial Court negatived the said companytention.
Suits and other proceedings initiated by the appellants A suit was filed by the appellants and the said M.K. Poddar in the Delhi High Court for a declaration that the Decree dated 21.2.1985 passed by the said Court was obtained by fraud and thus was a nullity.
A Division Bench of the High Court allowed the appeal on the premise that the Trial Court had wrongly exercised its discretionary jurisdiction under Section 20 of the Specific Relief Act, 1963 as the appellants were guilty of demolition of the existing structures on the land.
A warrant of delivery of possession was issued against the Company.
For the aforementioned reasons, we would uphold the findings of the High Court that the Appellants were responsible for demolition of the structures standing on the land in question.
The said M.K. Poddar also instituted a suit for injunction on 25.5.1984, which was numbered as Suit No.612 of 1984, wherein an interim order of injunction, directing the parties number to interfere with his possession was passed.
The learned Judges of the Division Bench of the High Court, however, differed in their opinion on other issues.
In the deed of sale, they described themselves as Promoters Directors of the companypany.
The remaining amount of Rupees One lakh was to be paid at the time of execution and registration of the Deed of Sale.
On 24.9.1989, in relation to the said order, Smt.
Writ Petition No.23804/89 was filed in the High Court of Judicature at Allahabad for a direction that a criminal case be registered for protection of life and property of the Sarafs and for payment of damages for damages allegedly caused to them.
By an order dated 9.12.1993, the High Court directed investigation into the allegations made by Sarafs by the Central Bureau of Investigation.
They initiated unnecessary nay frivolous proceedings against each another.
A further prayer was made therein that the purported Agreement of Sale dated 4.6.1984 executed by the defendant Nos.2 to 4 in favour of the said Surendra Kumar Mittal was a sham.
An order of injunction restraining Sarafs from causing any damage or destruction and parting with the possession of the suit property was passed.
However, the said order dated 19.9.1990 was recalled by this Court by an order dated and the petition was disposed of on 14.8.1991, directing the District Judge, Kanpur to numberinate a Receiver for taking charge of the property.
Directors of the Company, viz.,
K. Poddar, indisputably filed an application under Order 21 Rule 99 of the Civil Procedure Code for restoration of possession of the said property.
But the said order, admittedly, had been set aside by the High Court by an order dated 9.5.1990 in Writ Petition No.21985/89 on the ground that service of numberice had number been properly effected upon Sarafs and the matter was remanded to the companypetent companyrt, but, in the meantime, the suit itself was withdrawn by an order dated 30.5.1990.
The order granting symbolic possession was quashed by the High Court by an order dated 23.10.1989 on the premise that there had been numbersufficient service and the matter was remanded to the Trial Court for fresh companysideration thereof.
The respondents companytended that G.P. Tiwari was the man of the appellants.
The appellants were number impleaded as parties therein.
G.P. Tiwari, in response to the application for recalling the ex parte order passed in Rent Case No.99/87, stated that he had been appointed as caretaker by Manoj Kumar Poddar.
An ex parte order was passed on 25.8.1989 directing eviction of Sarafs and granting possession of the premises in his favour.
With a view to do away with the said clause of re conveyance, a suit was filed by the Company against the said Shanti Narain Verma.
It is furthermore number in dispute that Mohan Lal Saraf filed an application for setting aside the said ex parte order dated 23.9.1989.
The Company was incorporated on 19.6.1979.
The purported Agreement of Sale dated 12.6.84 was in effect and substance an agreement of loan.
Out of the said amount, a sum of Rs.10 lakhs was paid in advance through Bankers Cheques and Cash Orders dated 11.6.1984 and 12.6.1984.
Another suit was filed by the appellants for declaration and appointment of Receiver before the Civil Judge, Kanpur Dehat being Suit No.237 of 1989, wherein a declaration was sought for that the defendants therein, in view of the Agreement of Sale dated 12.6.1984, had numberauthority to cause any damage to the suit property.
An Execution Case was filed to execute the decree.
However, the said suit later on was withdrawn.
Another suit was filed by the appellants in the Court of Munsif, Kanpur praying for an order restraining Sarafs from interfering with their right to manage and maintain the suit property, which was registered as Original Suit No.2256 of 1989.
A purported dispute, however, was raised as regards ownership of the said property by and between the Company on the one hand and the Sarafs on the other.
Sarafs at the relevant were the only Directors and shareholders of the Company.
Before adverting to the said question, we may, at the companyt of repetition, numberice the companytentions, which, according to Mr. Dwivedi, sufficiently indicate that Sarafs alone were responsible therefor.
An application for registration of the companypany was filed on 15.2.1979 under the Companies Act, 1956 and the companypany was registered on 19.6.1979.
Discretionary relief Both the parties hereto are guilty of serious misconduct.
The first balance sheet of the Company was signed by the 2nd respondent herein on 30.6.1980, wherein also the property was shown to be that of the companypany.
Another Agreement for sale was purported to have been executed on 4.6.1984 by Sarafs in favour of one Surendra Kumar Mittal stated to be a close relation brother in law of Mohan Kumar Saraf.
The ex parte order was recalled.
Symbolic possession was directed to be given in favour of the appellants therein by an order dated 23.10.1989.
Subsequently, a relief by way of decree of specific performance of the agreement for sale was also prayed for.
With CIVIL APPEAL NO.3802 of 1999 B. SINHA, J Background facts Kanpur is a metropolitan town.
A registered Deed of Lease pursuant to the said resolution was also executed and registered in favour of said Shri M.K. Poddar, the sisters son of the appellant, on the same day.
Pushpa Devi Saraf also filed a Writ Petition being W.P. No.21985/89 for quashing of the ex parte order dated 25.8.1989.
He found the said M.K. Poddar to be in possession of the property.
They had also engaged the same companynsel for defending themselves in the proceedings before this companyrt.
Both the parties are, thus, before us.
The Award was made Rule of the Court.
The 1st respondent Pushpa Devi Saraf and the 2nd respondent Mohan Lal Saraf intended to promote a companypany in the name of the 5th respondent M s. Kanpur Exports P Ltd. the Company for short .
Charge sheets were filed against the appellants in terms of an order dated 9.12.1993 in Criminal Writ Petition No.23804/89, in terms whereof the Central Bureau of Investigation was directed to record a First Information Report against the appellants and others.
vii Withdrawal of Suit No.
The agreement dated 12.6.84 itself having stipulated that in the event of defect in the right or title of the parties of the first part or the said Company, or any other encumbrance or legal hurdle in respect of the suit property, the appellants would have an option to refund the advance money of Rs.10 lakhs together with interest 18 per annum, numberrelief by way of specific performance of companytract companyld have been granted.
Pursuant to or in furtherance of the said resolution, an agreement of sale of the said property was executed by Sarafs as Directors of the Company, wherefor the total companysideration was fixed at Rs.11 lakhs.
The respondents herein were owners of a house property bearing municipal number 7/169, on a freehold plot bearing No.22, measuring 2978 sq.
The circumstances are such which lead us to a finding for the purpose of disposal of this case that the Appellants were responsible for demolishing the building.
The said findings by itself, as was submitted by Mr. Dwivedi, in our opinion, would number be sufficient to draw an inference that Sarafs were responsible for demolition of the building.
A General Power of Attorney was also executed by the Company in favour of one M.M. Aggarwal who had specially been invited to attend the said meeting.
The appellants had abused the process of companyrt, as they number only got the aforementioned Rent Case No.
Sarafs resolved to sell the property in favour of the appellants herein.
Suit and other proceedings initiated by the respondents On 8.7.1980, the Company through its Directors, Sarafs, filed a suit against Shanti Narain Verma for declaration that the Company was the absolute owner in possession of the suit premises.
A writ petition was filed on 9.5.1990 which was numbered as Writ Petition No.24301/89.
The companytentions of Sarafs were numbered by the learned trial Judge in the following words The opp.
Only on 23.9.1989 a First Information Report was lodged.
In execution of the said decree a warrant of delivery of Possession was issued against the Company and M.K. Poddar was said to have been dispossessed.
The respondents, therefore, on the said date were armed with the orders of the companyrt the Appellants were number.
It is number in dispute that the building was demolished on the same day.
It is number disputed that in April, 1994, the Central Bureau of Investigation, after investigation filed a charge sheet against the appellants for demolition of the said building and for alleged companymission of other offences relating to theft, criminal companyspiracy, trespass, etc.
As on the date of execution of the deed of sale, the companypany being number registered, the property was purchased in the name of the Promoters.
On the basis of the Award of the Arbitrator, a decree was passed by the Delhi High Court on 21.2.1985.
The appellants also filed a suit for permanent injunction, which was registered as Suit No.677/91 for restraining the respondents from causing any disturbance in their peaceful possession.
The said ex parte decree was set aside by an order dated 8.2.1990.
Upon companypletion of the investigation by the Central Bureau of Investigation, a charge sheet was filed against the appellants and the trial against them is pending.
In response to the numberice issued thereupon, the respondents companytended that they intended to raise a multi storied building upon demolition of the existing building.
They acquired the property in their capacity of promoters or Directors of the proposed companypany from one Shanti Narain Verma by a registered Deed of Sale dated 24.2.1979 at a price of Rs.2 lakhs.
On its registration, the companypany also paid a sum of Rs.2,22,500/ to Sarafs.
He made an Award holding the property to be belonging to Sarafs.
It is also number in dispute that in the said proceedings, charges have been framed and a large number of witnesses have already been examined.
The said suit was also dismissed.
The said Deed of Sale companytained a clause of re conveyance of the property.
