JUDGMENT

MANMOHAN, J. (Oral):

I.As 17167/2011 & 7184/2012 in CS(OS) 2670/2011

1. While I.A 17167/2011 has been filed seeking an injunction restraining the defendants from interfering in plaintiff's possession and from creating obstacles in plaintiff's ingress and egress to the second floor of 14, Bazar Lane, Babar Road, Bengali Market, New Delhi-110001 (hereinafter referred to as the ‘suit property’), I.A 7184/2012 has been filed by the plaintiff for handing over keys of the suit property as it is the plaintiff's case that defendants had forcibly taken possession of the suit property.

2. The facts of the present case are that on 17th February, 1992, a Collaboration Agreement was executed between late Mr. Darshan Lal Kapil, father and father-in-law of defendant Nos. 1 and 2 respectively and M/s. Ranjit Towers (India) Pvt. Ltd. (hereinafter referred to as ‘developer’) whereby the developer agreed to reconstruct the suit property at its own cost and expense. Upon the construction being completed, father of defendant No. 1 was to own ground floor and receive Rs. 15 lacs from the developer. The rest of the reconstructed property that means, basement, first and second floor was agreed to be sold, transferred and conveyed by the father of defendant No. 1 to the developer or its nominee. The developer was also entitled to enter into an Agreement to Sell/Transfer/Negotiate sale of basement, first floor and second floor.

3. In fact, in pursuance to the said Collaboration Agreement, the developer sold the basement and first floor to Mrs. Madhu Gupta and Mr. and Mrs. Parag P. Tripathi respectively.

4. However, dispute arose between the parties during and after construction and several litigations were filed during the period 1996 to 2001.

5. On 01st October, 2001, a Settlement Deed was executed amongst the developer, purchasers of basement and first floor as well as the legal heirs of Mr. Darshan Lal Kapil. Under the aforesaid Settlement Deed, the developer agreed to pay Rs. 18.50 lacs to the defendants towards compensation, damages, balance and expenses. While a sum of Rs. 6 lacs was paid at the time of signing of the aforesaid Settlement Deed, the balance Rs. 12.5 lacs was to be paid in six months for which a post-dated cheque was also issued. In the event of default of payment of Rs. 12.5 lacs by the developer, the defendants were to have a charge over the basement and was entitled to get basement attached. Under the aforesaid Settlement Deed, the developer was required to construct the Staircase leading to the terrace of the second floor and the Mumty. Defendant No. 1 was also bound to execute a Power of Attorney authorizing the developer to sell the second floor of the suit property.

6. On 03rd October, 2001, a Compromise decree was passed by this Court in terms of the Settlement Deed dated 01 October, 2001.

7. Though there was some dispute and delay with regard to execution of the Power of Attorney by defendant No. 1, yet on 31 January, 2002 an irrevocable Power of Attorney was executed by defendant No. 1 in favour of the developer which was duly registered with the Sub-Registrar.

8. Subsequently, the developer executed a duly registered Sale Deed dated 01 March, 2011 in favour of the plaintiff. Immediately thereafter, on 10 March, 2011, the defendant No. 1 cancelled the irrevocable General Power of Attorney dated 31 January, 2002 executed in favour of the developer.

9. It is pertinent to mention that in the month of February, 2011, the defendant No. 1 had filed an execution petition being Ex.Pet No. 55/2011 against the developer claiming various amounts payable in terms of the Collaboration Agreement dated 17 February, 1992. In the said execution petition, defendant No. 1 had sought attachment of the second floor and sale thereof for recovery of amounts claimed and had also sought keys of the second floor so that he could have access to the terrace.

10. It is the plaintiff's case that after it purchased the second floor of the suit property and took possession thereof, defendants started creating obstruction in plaintiff's ingress and egress. It is further the plaintiff's case that during the pendency of the suit, defendants in complete violation of law forcibly broke open the plaintiff's locks on the second floor and replaced the same by placing their own locks.

11. On 30 November, 2011, the defendants were directed to deposit the keys of the second floor with this Court. As the plaintiff wanted to utilize the second floor purchased by it, plaintiff without prejudice to its rights and contentions, deposited some of the amounts claimed by the defendants totalling to Rs. 1.26 lacs in the execution petition.

12. Mr. Anil Sapra, learned senior counsel for plaintiff stated that to avoid unnecessary litigation, plaintiff had also written to the NDMC, seeking its permission to construct a Staircase and Mumti as desired by the defendant No. 1. However, NDMC replied that only a spiral Staircase without riser could be erected and that construction of Mumti on the terrace was not permissible in view of Lutyens' Bungalow Zone norm which did not allow construction above the existing height of the building. Mr. Sapra submitted that the plaintiff was willing to construct the spiral staircase on its own costs even though it was the obligation of the developer.

13. Ms. Sapna S. Kapil, Advocate, for the defendants submitted that plaintiff was not entitled to any relief in the present applications as Rs. 10 lacs was yet to be paid by the developer under the initial Collaboration Agreement dated 17 February, 1992. In this connection, she placed reliance upon Clause 5(b) of the Collaboration Agreement dated 17 February, 1992 which is reproduced hereinbelow:-

“5. That at the time of execution of this Agreement, the Developers have paid by sum of Rs. One lakhs (Rupees One lakh) vide cheque No. 093633 dated 17.2.1992 drawn on Andhra Bank, Green Park, to the Owners. That this is the initial instalment of the total amount of Rs. 15,00,000/- (Rupees Fifteen lakhs only) payable to the owners. That the developers will pay the balance sum of Rs. 14,00,000/- (Rupees Fourteen lakhs only) to the Owner as mentioned below.

xxx xxx xxx

b) Rs. 10,00,000/- (Rupees Ten lakhs only) in three equal instalments at the time of transfer of ownership/registration of sale deed of the basement, first and second floor each of the said building in favour of the developers or his nominee(s) or any prospective buyer(s) (as per the developers instructions) and handing over possession of the ground floor back to the owner.”

14. She further submitted that the developer had no power to execute a Sale Deed as according to her the Power of Attorney dated 31 January, 2002 was a Special Power of Attorney only to do a special act that means, to execute an Agreement to Sell. According to her, though the nomenclature of the Power of Attorney stated that the Power of Attorney was irrevocable, yet as the same was executed without consideration, the defendant No. 1 always had the power to revoke it.

15. She also contended that as the Mumti and the Staircase had not been constructed by the developer, the developer had no right to execute a Sale Deed in favour of the plaintiff of the second floor.

16. Ms. Kapil lastly submitted that plaintiff was never in possession of the suit property and therefore, this Court at the interim stage without a trial could not put the plaintiff in possession of the suit premises.

17. Having heard the learned counsel for the parties, this Court is of the opinion that the contention of the defendants that Rs. 10 lacs was to be paid in accordance with the Collaboration Agreement dated 17 February, 1992 over and above Rs. 18.50 lacs mentioned in the Settlement Deed is not correct. The relevant portion of the Settlement Deed dated 01 October, 2001 executed much after the Collaboration Agreement reads as under:

“1. That all the parties to the litigation mentioned above hereby confirm the collaboration agreement dated 17.2.1992 entered into between the First Party and the Second Party with the additions contained in this settlement.

2. That the second party hereby undertakes to pay to the first party a total sum of Rs. 18,50,000/- (Rupees Eighteen Lacs and Fifty Thousand only) in lieu of compensation, damages, balance and the expenses incurred to the First party, namely, Sh. Mukesh Kapil, who solemnly assures and represents that he has been duly empowered/authorised by all the legal heirs of late Shri Darshan Lal Kapil by virtue of a registered Will dated 20.10.1997 executed by Late Sh. Darshan lal Kapil in favour of Sh. Mukesh Kapil and that he alone is entitled to receive the above mentioned amount. The first party solemnly assures that all the rights of his late father on his death have devolved upon him and each one of the other legal heirs of his father have already filed no objection certificates before L & DO thereby confirming that they have no objection to the mutation in favour of the first party to the exclusion of all other legal heirs on the death of their late father. However, Mukesh Kapil on his own and unilaterally agrees to pay a part of it to the legal heirs in the interest of peace and harmony in the family. On receipt of the sum of Rs. 18,50,000/- (Rupees Eighteen Lac Fifty Thousand only) on or before 2.4.2002 from the second party, the first party shall have no claim whatsoever against the second party except that is stated herein below.”

(emphasis supplied)

18. Consequently, in the opinion this Court, in view of the subsequent Settlement Deed, the contention of Ms. Sapna S. Kapil, Advocate, that after payment of Rs. 18.50 lakhs, another amount of Rs. 10 lacs was to be paid, is contrary to facts and untenable in law.

19. Upon a conjoint reading of Clause 5 of the Settlement Deed dated 01 October, 2001 and the irrevocable Special Power of Attorney dated 31 January, 2002 executed by the defendant No. 1, this Court is of the opinion that the developer was entitled in law to execute a Sale Deed in favour of the plaintiff. The relevant terms of the Settlement Deed dated 01 October, 2001 and irrevocable Special Power of Attorney dated 31 January, 2002 are as under:-

Settlement Deed dated 01 October, 2001

“5. The first party shall execute a Power of Attorney as contemplated in the Collaboration Agreement dated 17.2.92 authorising the second party to negotiate and enter into an Agreement to Sell/sell the second floor. A copy of the Power of Attorney is enclosed herewith. This Power of Attorney shall be executed/registered within one week of the signing of the present agreement. If at any time prior to 2.4.2002, the party of the Second Part is able to sell the second floor of the property, then the balance amount of Rs. 12,50,000/- shall be paid to the First Party by the Second Party within 15 days of handing over possession of the second floor of the premises to the new buyer. As soon as the balance of Rs. 12.50 Lacs is paid by the second party, the first party shall also execute a Power of Attorney authorising the second party to sell the basement, if so required by the second party.

Irrevocable Special Power of Attorney dated 31 January, 2002

“3. That under the aforesaid settlement vide clause 5, the First Party is bound to execute a Power of Attorney enabling the Second Party to sell the second floor of the premises situated at 14, Bazar Lane, Babar Road, New Delhi. The present Special Power of Attorney is being executed by the First Party in favour of the Second Party in accordance with the aforementioned settlement. Both the parties shall remain bound by the decree passed by the Hon'ble High Court on 3.10.2001

NOW THIS DEED WITNESSETH AS UNDER

1. That Sh. Mukesh Kapil, the party of the First Part constitutes the party of the Second Part as the Special Attorney in his name and on his behalf to do or execute any of the following acts or things with regard to the Second Floor of 14, Bazar Lane, Babar Road, New Delhi.

2. To negotiate, finalize and enter into an agreement to sell/transfer with any prospective buyer in respect of the Second Floor of premises bearing No. 14, Bazar Lane, Bengali Market, Babar Road, New Delhi with common usage of terrace right.

xxx xxx xxx

5. That the party of the First Part shall also remain bound to join and execute into any sale deeds that may be required by the prospective buyers of the second floor of premises bearing No. 14, Bazar Lane, Babar Road, Bengali Market, New Delhi and the Second Party shall be free and fully empowered, authorised and competent to get these instruments registered in the office of the Sub-Registrar.”

(emphasis supplied)

20. In the opinion of this Court, the expression ‘transfer’ as used in Clause 2 of the Special Power of Attorney is of extremely wide amplitude. In Black's Law Dictionary, Ninth Edition, the expression ‘transfer’ is stated to mean “any mode of disposing of or parting with an asset or an interest in an asset, including a gift, the payment of money, release, lease, or creation

of a lien or other encumbrance……..the term embraces every method’ direct or indirect, absolute or conditional, voluntary or involuntary-of disposing of or parting with property or with an interest in property.”

21. Consequently, this Court is of the view that the Special Power of Attorney executed in the present case gives the power to the developer to execute not just an Agreement to Sell, but a Sale Deed also.

22. Further, the submission of Ms. Sapna S. Kapil, Advocate, that the Power of Attorney is revocable as it is without consideration, is contrary to facts. In fact, upon a composite reading of the Settlement Deed dated 01 October, 2001, it is apparent that the Power of Attorney has been executed by the defendant No. 1 in view of the consideration mentioned in the Settlement Deed dated 01 October, 2001.

23. In Chitty on Contracts under the heading of “Irrevocable authority” it is observed as under:-

“Irrevocable authority. Though an agent's authority is, as stated above, normally revocable at will (without prejudice to his right, if any, to damages for breach of contract) there are some cases where this is not so. If there is an interest coupled with the authority, that is, if an agreement is entered into by deed or on a sufficient consideration, whereby an authority is given for the purpose of providing a security, such an authority is irrevocable, even by death, mental disorder or bankruptcy……”

(emphasis supplied)

24. Consequently, defendant No. 1 had no right or authority to revoke the Power of Attorney as it has purportedly done in the present case.

25. Further, defendants submission that till a Mumty and staircase is constructed, plaintiff cannot be granted any relief, is not correct. Firstly, the alleged non-construction of the staircase and Mumty cannot be attributed to the plaintiff. Secondly, from the documents on record, it is apparent that NDMC has declined permission for construction of Mumty and staircase with step riser as desired by defendants. However, permission was granted by NDMC only for spiral staircase, to which defendants are not agreeable. This Court is prima facie of the view that as the said obligation cannot be performed due to operation of law, plaintiff cannot be denied relief on this ground. Moreover, both the plaintiff and developer have given an undertaking in their pleadings to construct the staircase and Mumty as and when defendant No. 1 gets the requisite permission from NDMC.

26. As far as the defendants' contention that plaintiff is not in possession of the second floor of the suit property, this Court finds that the registered Sale Deed executed by the builder admits that possession has been handed over to the plaintiff. Further, the Local Commissioner in his report has stated that though locks opened using keys provided by defendants, but the entrance door contained marks which suggested that another latch/lock had existed, but which had been removed. It is pertinent to mention that the defendant No. 1 in his own execution petition No. 55/2011 has sought relief of possession of the second floor. The defendant No. 1 in his own letter dated 02nd March, 2011 has admitted, “On 01 March, 2011 a woman with her two children who did not disclose her name with the key of second floor entrance door and entered into second floor and informed that she has purchased the second floor from you. She stayed in the second floor flat for couple of hours and then left in her Santro car bearing no. DL-2C AP 9817 which was parked in front of 19, Central Lane, New Delhi - 110 001. The house number 19, Central Lane, belongs to Mrs. and Mr. Parag P. Tripathi……” Consequently, it will have to be presumed at this stage that plaintiff was in settled possession prior to the defendants' forcibly taking over possession.

27. This Court is also of the opinion that defendants under the Compromise Decree have no right, title or interest whatsoever in the second floor of the suit property and no default of any nature by the developer would entitle the defendants to seek attachment or claim lien on the second floor of the suit property.

28. This Court is of the view that the plaintiff has a strong case for trial and the balance of convenience is entirely in favour of the plaintiff. Further, this Court is of the view that the defences raised by defendant No. 1 are without any merit and the defendant No. 1 has with malafide intent dispossessed the plaintiff from the settled legal position. Consequently, in the opinion of this Court, plaintiff is entitled to the keys of the second floor of the suit property.

29. The Supreme Court in Dorab Cawasji Warden v. Coomi Sorab Warden, (1990) 2 SCC 117 has held that even status quo ante order can be passed by the Courts at the interim stage. The relevant paragraphs of the said judgment are reproduced hereinbelow:-

“10. The trial court gave an interim mandatory injunction directing respondent 4 not to continue in possession. There could be no doubt that the courts can grant such interlocutory mandatory injunction in certain special circumstances. It would be very useful to refer to some of the English cases which have given some guidelines in granting such injunctions.

11. In Shepherd Homes Ltd. v. Sandham [(1970) 3 All ER 402 : (1970) 3 WLR 348] Megarry J. observed:

“(iii) On motion, as contrasted with the trial, the court was far more reluctant to grant a mandatory injunction; in a normal case the court must, inter alia, feel a high degree of assurance that at the trial it will appear that the injunction was rightly granted; and this was a higher standard than was required for a prohibitory injunction.”

12. In Evans Marshall & Co. Ltd. v. Bertola SA [(1973) 1 All ER 992 : (1973) 1 WLR 349] the Court of Appeal held that:

“Although the failure of a plaintiff to show that he had a reasonable prospect of obtaining a permanent injunction at the trial was a factor which would normally weigh heavily against the grant of an interlocutory injunction, it was not a factor which, as a matter of law, precluded its grant;”

The case law on the subject was fully considered in the latest judgment in Films Rover International Ltd. v. Cannon Film Sales Ltd. [(1986) 3 All ER 772], Hoffmann, J. observed in that case: (All ER pp. 780-81)

“But I think it is important in this area to distinguish between fundamental principles and what are sometimes described as ‘guidelines’, i.e useful generalisations about the way to deal with the normal run of cases falling within a particular category. The principal dilemma about the grant of interlocutory injunctions, whether prohibitory or mandatory, is that there is by definition a risk that the court may make the ‘wrong’ decision, in the sense of granting an injunction to a party who fails to establish his right at the trial (or would fail if there was a trial) or alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial. A fundamental principle is therefore that the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been ‘wrong’ in the sense I have described. The guidelines for the grant of both kinds of interlocutory injunctions are derived from this principle.”

Again at page 781 the learned Judge observed:

“The question of substance is whether the granting of the injunction would carry that higher risk of injustice which is normally associated with the grant of a mandatory injunction. The second point is that in cases in which there can be no dispute about the use of the term ‘mandatory’ to describe the injunction, the same question of substance will determine whether the case is ‘normal’ and therefore within the guideline or ‘exceptional’ and therefore requiring special treatment. If it appears to the court that, exceptionally, the case is one in which withholding a mandatory interlocutory injunction would in fact carry a greater risk of injustice than granting it even though the court does not feel a ‘high degree of assurance’ about the plaintiff's chances of establishing his right, there cannot be any rational basis for withholding the injunction.”

and concluded that: (All ER p.782)

“These considerations lead me to conclude that the Court of Appeal in Locabail International Finance Ltd. v. Agroexport [(1986) 1 All ER 901, 906: (1986) 1 WLR 657, 664] was not intending to ‘fetter the court's discretion by laying down any rules which would have the effect of limiting the flexibility of the remedy’, to quote Lord Diplock in the Cyanamid case [American Cyanamid Co. v. Ethicon Ltd., (1975) 1 All ER 504, 510: 1975 AC 396, 407]. Just as the Cyanamid [American Cyanamid Co. v. Ethicon Ltd., (1975) 1 All ER 504, 510: 1975 AC 396, 407] guidelines for prohibitory injunctions which require a plaintiff to show no more than an arguable case recognise the existence of exceptions in which more is required (compare Cayne v. Global Natural Resources plc [(1984) 1 All ER 225]), so the guideline approved for mandatory injunctions in Locabail [(1986) 1 All ER 901, 906: (1986) 1 WLR 657, 664] recognises that there may be cases in which less is sufficient.”

On the test to be applied in granting mandatory injunctions on interlocutory applications in Halsbury's Laws of England, 4 edn., Vol. 24, para 948 it is stated:

“A mandatory injunction can be granted on an interlocutory application as well as at the hearing, but, in the absence of special circumstances, it will not normally be granted. However, if the case is clear and one which the court thinks ought to be decided at once, or if the act done is a simple and summary one which can be easily remedied, or if the defendant attempts to steal a march on the plaintiff, such as where, on receipt of notice that an injunction is about to be applied for, the defendant hurries on the work in respect of which complaint is made so that when he receives notice of an interim injunction it is completed, a mandatory injunction will be granted on an interlocutory application.”

13. The law in United States is the same and it may be found in 42 American Jurisprudence 2d page 745 et seq.

xxx xxx xxx

30. These facts in our view clearly establish that not only a refusal to grant an interim mandatory injunction will do irreparable injury to the appellant but also balance of convenience is in favour of the appellant for the grant of such injunction. In the result we allow the appeal, set aside the judgment of the High Court and restore that of the trial court with costs in this appeal.”

(emphasis supplied)

30. Consequently, to prevent irreparable and serious injury, present applications are allowed and the reliefs claimed for by the plaintiff in the present applications are granted.

31. The Joint Registrar of this Court, who has the keys of the suit property, is directed to hand over the keys to the learned counsel for plaintiff within one week against a receipt. For this purpose, list the matter before Registrar General on 15 May, 2013.

32. This Court may mention that after the arguments in the present applications had been concluded and this Court was hearing a connected execution petition filed by Mr. Parag P. Tripathi and Mrs. Neelima Tripathi, Ms. Sapna S. Kapil, who happens to be defendant No. 2 and wife of defendant No. 1, stated that she had no faith in this Court as all the Courts were under the control of Mr. Parag P. Tripathi. This Court reluctantly wishes to place on record that with great difficulty arguments were heard in the present part-heard case as Ms. Sapna S. Kapil continuously kept on interrupting the proceedings. Though this Court was inclined to initiate criminal contempt of Court proceedings against Ms. Sapna S. Kapil, as being a lawyer she is supposed to be fully familiar with Court etiquette and procedure, but keeping in view the fact that she is defendant No. 2 and wife of defendant No. 1 and could be emotionally involved with the present case, has refrained from doing so.

33. With the aforesaid observations, present applications stand allowed.

I.A 20837/2011 in CS(OS) 2670/2011

Mr. Anil Sapra, learned senior counsel for plaintiff/applicant states that the present application has become infructuous in view of the deposit of the keys by the defendants.

Accordingly, the same is dismissed.

CS(OS) 2670/2011 & I.A 2505/2012

List the matter on 22 October, 2013.

Matter need not be treated as part heard.