In the suit seeking decree of declarations [(i) that the collaboration agreement dated 23-4-87 stands cancelled and is inoperative and not binding on the plaintiff and that the plaintiff has, therefore, no obligations thereunder to the defendants and that the defendants have no right subsisting thereunder or arising out of that agreement, (ii) that the various agreements to sell used by defendants 1 and 2 for the purposes of entering into further contracts with third parties including defendants 5 to 13 and on which the plaintiff's signatures were obtained as a confirming party are vitiated, inoperative and void and that the plaintiff is not bound by the terms of any of these agreements used by defendants 1 and 2, (iii) that the documents being agreements to sell executed by the plaintiff in blank on 28-8-89 and which have been used for purposes of signing a contract for sale of flats B-2 and E-1 to defendants 1 and 3 respectively are duly cancelled and are vitiated by fraud and misrepresentations and are void and as such not binding on the plaintiff and creates no rights in favour of defendants 1-3, (iv) that the plaintiff has a right to immediately undertake demolition of the building and structures put up by defendant No. 2 pursuant to the agreement dated 21-4-87 or alternatively order, the demolition of the said structures constructed by defendants 1 and 2 in view of the fact that the said structures are in violation of the sanctioned plans and are in violation of the building byelaws and also in violation of the conditions imposed by the competent authority under the Urban Land (Ceiling and Regulation) Act, the Municipal Corporation of Delhi and Delhi Administration] and for consequential relief of perpetual injunctions [(i) restraining defendants 1-13 from entering upon the plaintiff's property 20-A, Friends Colony, New Delhi or any part thereof and further restraining the said defendants, from in any way directly or indirectly interfering with the peaceful use and enjoyment of the said property by the plaintiff, (ii) restraining the defendants from exercising or asserting any rights under or pursuant to any of the agreements executed by the plaintiff and referred to in the plaint, (iii) restraining the defendants from interfering with or obstructing the demolition of the structures, presently existing on the property 20-A, Friends Colony, New Delhi by the plaintiff AND a preliminary decree for rendition of accounts and on taking of accounts to pass a final decree for the amount found payable to the plaintiff on settlement of accounts, by IA No.(sic)/90 the plaintiff prays for the appointment of a receiver and committing the suit property i.e property 20-A, Friends Colony, New Delhi to the possession, custody and management of the receiver, by IA No. 7420/90 the plaintiff prays for appointment of a receiver and commit the suit property to the possession, custody and management of the receiver, pending the disposal of the suit, by IA No. 8565/95, defendants 5-13 pray for appointment of the nominee of these defendants as a receiver in respect of dwelling units A-1, A-2, C-1, C-2, B-1 and portion of B-2 in the suit property for the purpose of doing everything necessary to complete the construction of these dwelling units including getting plans revalidated, signing of all relevant applications and for the purpose of obtaining occupation and completion certificates also authorising receiver to hand over the possession of these dwelling units to defendants 5-13 after obtaining completion certificate, by IA No. 11266/95 under Order 23 Rule 1 and 3 CPC, plaintiff and defendants 5 to 13 have stated that at the request of these defendants the plaintiff has agreed to their nominee Mr. Vijay Bagla son of Shri S.N Bagla r/o 30A/1, Friends Colony (West), New Delhi being appointed as receiver on the said defendants' jointly and severally agreeing to (a) bear all costs of receiver, (b) bear all costs relating to the construction and completion of the plaintiff's flats and paying the charges/interest, fees and other demands of the MCD and other local/statutory authorities, (c) keep the plaintiff fully indemnified against all costs of the receiver and against all losses and damages suffered by the plaintiff on account of any action or inaction on the part of the receiver. Thus, the plaintiff and defendants 5-13 jointly pray for the appointment of the receiver with powers to the receiver, enumerated in para 6(i), (ii) and (iii).

Since all these four applications involve a common question of appointment of receiver under Order 40 Rule 1 CPC in relation to the property 20-A, Friends Colony (West), New Delhi which is the subject matter of the suit, I have heard the learned counsel representing the plaintiff, defendants 1 to 3 and defendants 5 to 13 in all these IAs and decide all these IAs by this common order.

2. The facts giving rise to the present dispute, briefly stated are, that the plaintiff owns property bearing municipal No. 20-A, Friends Colony, New Delhi (plot of land) comprising of freehold land admeasuring 4300 sq. yds.; that the plaintiff entered into an agreement dated 23-4-1987 with defendant No. 1, whereby 54% of the total saleable space in the residential building proportionately was allocated to the builder by the owner on each floor/basement of the building in consideration of the builder developing, constructing and building the residential building and for doing all acts, deeds and things and undertaking the obligations, as contained in agreement; that 46% of the total saleable space in the said residential building was to remain with the plaintiff as the owner whereas 54% of the total saleable space of the said building was to be with defendant No. 1 with all rights to develop and construct the property in question; that defendants 1-4 commenced the construction on the suit property on the basis of the agreement dated 23-4-87 with the plaintiff and defendant No. 1-4 pursuant to the allocation of 54% of the total saleable space, as aforestated, entered into different agreements with defendants 5-13 in September, 1989 in respect of various apartments allocated to each of these defendants and to these agreements, plaintiff, as the owner of the property, is also the party; that under the agreement dated 23-4-87, the construction was to be completed by November, 1989 by defendant No. 1; that 46% of the total saleable space in the residential building proportionately on each floor of such building, allocated to the plaintiff was to be constructed by defendant No. 1 for the plaintiff.

3. The plaintiff and defendants 5-13 have jointly filed IA No. 11266/95 under Order 23 Rules 1 and 3 CPC requesting the appointment of the nominee of these defendants as the receiver, as aforestated, which prayer has been vehemently objected to by defendants 1 to 3. It has been submitted by Mr. Shanti Bhushan, counsel for defendants 5 to 13, that the plaintiff is a party to the agreements executed in favour of these defendants; whereby the construction of the apartments for these defendants was to be completed by defendant No. 1 by November, 1989; for which almost the entire consideration has been paid by defendants 5 to 13; that six years' delay in the completion of the construction of the building has been for no fault of these defendants; that these defendants are prepared to get completed the construction on their cost and that to protect the interest of defendants 1-3 these defendants would furnish the bank guarantee for the amount of Rs. 13,04,000/- which could be the only entitlement of defendant Nos. 1-3 in respect of the eight flats/apartments and that the nominee of these defendants be appointed as the receiver to complete the remaining construction work and hand over the possession to these defendants of the eight flats/apartments, for which there is no dispute; that the two flats (Flats Nos. E-1 and B-2) for which there is a dispute between the plaintiff and defendants 1 to 4 and civil suit is pending in this court, these defendants would not be touching those flats; that the contractor does not have any right but have only obligations under the agreement and that the contractor has no locus standi to oppose the appointment of the receiver; that to minimise the loss, joint application under Order 23, Rules 1 and 3 CPC has been submitted.

It is submitted by Mr. Rajiv Sawhney, counsel for the plaintiff that 46% of the total saleable space in the residential buildings proportionately on each floor of the said buildings was to be constructed by defendant No. 1 at its cost for the plaintiff and that the plaintiffs 46% has been partly constructed; that the portion constructed against the bye-laws and contract, which is non-compoundable has to be demolished; that it is the right of the plaintiff to select the flats and allocation; that the plaintiff does not have any confidence in defendant Nos. 1-3 and that they have lost the credibility for appointment at the receiver; that defendant No. 1 would not be adversely affected or prejudiced if the receiver is appointed, as jointly requested; that the non-compoundable deviations suggest the breach of contract; that the disputes between the plaintiff and defendants 5-13 have been settled by the joint request for the appointment of the nominee of defendants 5-13 as the receiver and the plaintiff accepts the transactions entered into in favour of defendants 5-13; that from 1990 defendant No. 1 did nothing; that defendant No. 1, if appointed as a receiver, will not use good material for completing the remaining construction and would create further complications in view of the serious disputes between the plaintiff and defendants 1-4; that IA under Order 23 Rules 1 and 3 CPC is for partial compromise qua defendants 5-13; that 54% of the total saleable space in the residential buildings proportionately on each floor of the said buildings to defendant No. 1, under the agreement, is accepted in compromise; that nothing remains payable to defendant No. 1; that there are no rights in favour of defendant No. 1 but only obligations under the contract; that the past conduct of the plaintiff is not relevant; that the outsider receiver would be liable for damages, if any, for his acts.

As against this, it is contended by Mr. Rawal, counsel for defendants 1-3 that the construction has been raised by these defendants by putting in Rs. 2.00 crores; that there is no reason as to why the receiver should be appointed for completing the construction; that appointment of the receiver would be prejudicial to these defendants; that the suit is frivolous; that rights of these defendants under the contract be considered; that it is not a matter of charity to these defendants, it is a right of these defendants to complete construction under the contract when the defendants have already spent about Rs. 2.00 crores; that these defendants are ready to complete the construction in the manner and on the terms fixed by the court on plaintiff's signing the plans/applications for revalidation of the sanction; that substantial construction has been put up at the site; that the plaintiff had option to choose the flats; that the agreements between the plaintiff and defendants 5-13 have been acted upon; that the plaintiff unilaterally made the alteration in the construction; that these defendants' bona fides are suggested from the fact that there is no reply filed by the plaintiff to IA No. 12021/92; that the delay in completion of construction has not occasioned because of defendants 1-4; that defendants' money is involved and that the plaintiff does not co-operate; that the purpose of the joint request for appointment of the arbitrator is not to get the work completed but to drive away these defendants; that no suit has been filed by defendants 5-13 on the basis of the agreements in their favour; that IA No. 8565/95 is beyond the purview of this suit; that the prayer sought in this IA is not contemplated under the law; that neither the plaintiff nor defendants 5 to 13 moved the court from September 1990 to August, 1995; that these defendants want to complete the construction under the directions of this court and that the equities be considered and the controversy between the plaintiff and the defendants be avoided; that if there are deviations, as defendants' money is sunk, defendant should be allowed to rectify the deviations and complete the work; that plaintiff is guilty of suppression of facts, which would disentitle him to equitable relief.

4. It will be seen from the above that pursuant to the agreement dated 23-4-87 46% and 34% of the total saleable space in the residential buildings proportionately on each floor of the said buildings has been allocated to the plaintiff and defendant No. 1 respectively. Defendant No. 1 commenced the construction pursuant to the said agreement, plaintiff and defendants 1-4 entered into agreements with defendants 5-13 allocating different apartments to each of these defendants in the residential building block C' According to defendants 5-13 defendant No. 1 has spent about Rs. 1.00 crore for the construction whereas according to defendants 1-4, Rs. 2.00 crores have been sunk by them for the construction pursuant to the agreement dated 23-4-1987. Plans were admittedly got sanctioned by the local authority as well as the concerned authorities for the purpose of said construction. It is suggested from the pleadings and the other record of the case that serious disputes arose between the plaintiff and defendants 1-3 for the building being constructed at plot No. 20- A, Friends Colony, New Delhi. It is suggested from the record that there is, however, no dispute that there have been deviations from the sanction accorded by the local authority and also the bye laws governing the building construction. Vide order dated 14-2-1991, this Court issued a direction to the Commissioner, Municipal Corporation of Delhi, to depute an engineer of the department to visit the site of plot No. 20-A, Friends Colony, New Delhi and to report if the construction made thereon is as per building bye laws and within the compoundable limits, also requiring to indicate as to how much would be the compounding fee if the deviations are permissible under the bye-laws. The report of the Commissioner under the said order was required to be submitted within four weeks from the date of the order.

Consequent upon the order dated 14-2-1991, referred to above, Mr. R.N Gupta, Zonal Engineer (Bldg.), New Delhi Zone of the MCD filed his report on 22-4-1991 on behalf of the MCD by way of affidavit. It is testified in the affidavit-cum-report that he is aware of the deviations carried out against the sanctioned building plans for building on plot No. 20-A, Friends Colony, New Delhi; that the building plans for the aforesaid property were sanctioned by MCD and the sanction released on 13-11-1987; that the building plans are valid for two years, that the sanction accorded expired on 12-11-1989; that no application for revalidation or extension of time of validity period has so far been submitted by anyone in respect of the sanctioned plan of aforesaid plot with MCD; that the building is still incomplete in as much as the finishing work, sanitary work etc. etc. are still to be done. In para 8, the deponent has testified that the details of compoundable deviations cannot be accurately worked out at this stage because of the reasons mentioned therein. Non-compoundable deviations have been pointed out in Annexure “A”. Para 1 of Annexure A provides that “at the site, construction has been carried out entirely against the drawings approved by DUAC and sanctioned by MCD. The size, shape and architectural features, elevations, height of the building have been totally changed. Fresh approval of Delhi Urban Art Commission is required after removal/rectification of non-compoundable deviation”. In para 2, it is stated that through some agreement, the property has been subdivided between the owner and the developer which subdeviation is in violation of the provisions of Sections 312 and 313 of the D.M.C Act. Moreover, at site, building has been constructed in four independent blocks with no link between each other which are again against the sanctioned plan. In para 3 it is provided that eight dwelling units on ground floor and three on first floor have been provided against sanction of 5 dwelling units on ground floor and 5 on first floor.

It is not the say either of the plaintiff or defendants 1-3 or defendants 5-13 that any of the non-compoundable deviation shown in Annexure A cannot be rectified by removal/modification/alteration, meaning thereby that these non-compoundable deviations are not such, the removal of any of which would render the rest of the constructed portion useless for all/any purposes of that they are not removeable at all in any manner. It cannot be denied that the completion and occupancy certificate can be obtained only after bringing the construction within the requirements of the building bye laws of the MCD by removing the non-compoundable deviations, and which is the last thing to be done in the matter of construction of building. The work is at a stand-still since last several years on account of disputes between plaintiff and defendant Nos. 1-3, and the sufferers are defendants 5-13, whose interest also needs to be protected, as they are not concerned with the disputes inter-se plaintiff and defendants 1-3, as defendants 5-13 are no party to the agreement dated 23-4-1987. It may also be seen that counsel for defendants 1-3, has, in course of arguments stated that these defendants, on the terms fixed by the Court, are wrong to complete the construction. The delay in completion of the disputed construction work is attributed to the plaintiff by defendants 1-3. Be it what it is, defendants 5-13, for no fault of theirs are the sufferers and looking to the facts and circumstances, the work must be completed and defendants 5-13 put in possession of the apartments-concerned. The plaintiff and defendants 1-3 may go on with their inter-se disputes leisurely especially when defendants 5 to 13 have also paid substantial amounts to defendants 1-3 and were to get possession of the respective apartment/flat by November, 1989, pursuant to the contract in their favour by defendants 1-3 to which the plaintiff is also a party.

5. Admittedly, defendants 1-3, pursuant to the agreement dtd. 23-4-1987, with the plaintiff and pursuant to the agreements in favour of defendants 5-13 respectively, have constructed the substantial part of the buildings. In the report-cum-affidavit by the Zonal Engineer(B), New Delhi Zone of the MCD in para 6 has stated that the building is still incomplete inasmuch as finishing works, sanitary fittings etc. etc. are still to be done. So according to this report-cum-affidavit, the building is incomplete as the finishing work, sanitary fittings etc. are still to be done meaning thereby as far as construction part of building is concerned, the same is completed or at least substantially completed. It is a matter of common experience that as far as construction of immoveable property is concerned, while obtaining completion certificate, revised plans suggesting the changes/alterations/modifications/deviations within the Building Bye-Laws are required to be submitted as there would always be some changes/modifications/deviations etc. in course of construction of the building and for which the signatures on the revised plan etc. of the owner, architect/engineer would be necessary. Now, taking the report, especially, para 5 thereof reproduced above, indicate the construction of the work executed at the site only leaving finishing work, sanitary fittings and such other works to be done. This would pose a question whether it would be just and convenient to appoint an outsider received under Order 40, Rule 1, C.P.C as jointly requested by plaintiff and defendants 5-13 for removing the non-compoundable deviations, getting re-validation of the sanction, completing the remaining work, submitting the revised plans, and also obtaining the completion certificate and occupancy certificate in respect of eight flats allocated to defendants 5-13 respectively under the agreement in their favour especially considering the fact that defendants 1-3, according to Mr. Rawal have sunk Rs. 2.00 crores for the disputed construction whereas according to Mr. Shanti Bhushan, defendants have spent about Rs. 1.00 crore for the construction. Even Rs. 1.00 crore would be a substantial amount and defendants 1-3 having put up compoundable as well as non-compoundable structure at the site and responsible for the same.

6. By virtue of the agreement dated 23-4-1987, the plaintiff brought defendant No. 1 on the suit property and by the said agreement, defendant No. 1 agreed and undertook to construct 46% of the total saleable space in the residential buildings proportionately on each floor of the said building at its own cost over and above 54% of the total saleable space in the said residential building, as aforestated. Thus, defendants 1-3 are in possession of disputed property by virtue of agreement dated 23-4-1987 and an interest has been created in immovable property i.e the suit property in favour of defendant No. 1. Defendants 1-3 are also in de facto possession of the suit property and an interest in the immoveable property, as aforestated, has been created in favour of defendants 1-3 by agreement dated 23-4-1987. Thus, possession of defendants 1-3 is more than the possession of an ordinary building contractor who is in possesion of the site for construction purpose only. The effect of appointing the nominee of defendants 5-13 as the receiver, as jointly prayed by the plaintiff and defendants 5-13 would be to deprive defendants 1-3 of their de facto possession of the suit property.

7. One of the settled principles governing the appointment of the receiver, under Order 40 Rule 1, C.P.C, as laid down in the case of T. Krishnaswamy Chetty v. Thangavelu Chetty reported in AIR 1955 Madras page 430, followed in 1993 (i) Delhi Lawyer page 453, is, that “an order appointing a receiver will not be made where it has the effect of depriving a defendant of a ‘de fact’ possession since that might cause irreparable wrong. It would be different where the property is shown to be ‘in media’ that is to say, in the enjoyment of no one.” In the instant case, defendant No. 1, as the organiser/developer/builder, is in de facto possession of the suit property pursuant to the agreement dated 23-4-1987, as pointed out above.

8. It is suggested from the pleadings on record that there are serious disputes between the plaintiff and defendants 1-3 if the building being constructed at the plot bearing No. 20A, Friends Colony, New Delhi. Defendants have alleged in the written statement that it is the plaintiff who did not sign the plan and the application for revalidation of sanction for completion the remaining construction and obtaining completion and occupancy certificate in respect of the disputed structure. It cannot be said, at this stage, on facts and circumstances, that the defence raised by the defendant on the face of it is wholly untenable. In the case of Rajeshwar Nath Gupta v. Administrator General reported in AIR 1989 Delhi 179 it has been held that “where there is a bona fide defence which has been setup and where the proposition of law is arguable, it is not advisable for the Court to appoint a Receiver to take possession of immovable property from the defendants unless and until the Court is of the opinion that, there is a well founded fear that the property in question will be dissipated, or that other irreparable mischief may be done unless the Court gives a protection.” It may be appreciated that in the instant case it is not the say in IA under Order 40, Rule 1, C.P.C as well as under Order 23, Rules 1 and 3, C.P.C that there is a fear that property in question will be dissipated or that the irreparable mischief may be done unless the Court gives a protection. From the joint application by plaintiff and defendants 5-13, it appears that the only object of getting the nominee of defendants 5-13 to be appointed as the receiver, is to drive out defendant No. 1 and complete the remaining construction work and obtain the completion certificate and the occupancy certificate so that defendants 5-13 can get the possession of their respective apartments and occupy the same which may raise number of serious questions between the parties concerning the agreement dated 23-4-1987, agreements with defendant 5-13 and the construction/completion work etc. etc.

9. As pointed out above, substantial amount of money has been expended by defendants 1-3 in the construction of disputed property. An interest in the suit immovable property has been created in favour of defendants 1-3 by agreement dated 23-4-1987 by which the defendants have physically come on and have remained on the suit property for all this period and construction of the building seems to have been substantially completed except finishing work, sanitary fittings etc. etc. However, looking to the facts and the circumstances as pointed out above, it is necessary and just and convenient within the meaning of Order 40, Rule 1, C.P.C to appoint the receiver, which is the prayer by the plaintiff in I.A 3188/90 and 7420/90, but defendants 1-3 cannot be deprived of their de facto possession of the suit property by appointing any outsider as the receiver since it is the obligation of defendants 1-3 to complete the work under the agreement.

10. Since it is suggested, for the reasons aforestated, that this is a fit case for appointment of the receiver under Order 40, Rule 1, C.P.C, having regard to the facts and circumstances of the case it would be expedient and equitable to appoint defendant No. 2 as the partner of defendant No. 1, to be the Court receiver under Order 40, Rule 1, C.P.C for completing the remaining work, obtaining completion certificate and occupancy certificate, and to do such other works/acts necessary for the purpose. The consequence is that there is no question of appointing the nominee of defendants 5-13 as the receiver, as prayed vide IA under Order 23, Rules 1 and 3, C.P.C

11. Thus, it will be seen from the above that I.As 3188, 7420/90 under Order 40, Rule 1, C.P.C deserve to be granted for the reasons aforestated and defendant No. 2 as the partner of defendant No. 1 firm is appointed as the receiver under Order 40, Rule 1, C.P.C in respect of dwelling units Al, A2, Cl, C2, Bl and portion of B2 in the property bearing No. 20A, Friends Colony, New Delhi for the purpose of doing everything necessary to complete the construction of these dwelling units, including signing of relevant application for the purpose of getting plans revalidated, completing the work, obtaining completion and occupation certificates with direction to the plaintiff to give necessary cooperation to the receiver for the purpose. Defendant No. 2 as the partner of defendant No. 1 firm appointed as the receiver, shall apply for revalidation of the sanction within two weeks from today and shall complete the work and apply for the completion/occupancy certificates within three months from the date of the receipt of the revalidated sanction. The receiver, after obtaining the occupancy certificate from the authority concerned, shall submit the report and seek further directions with regard to the handing over of the possession of the dwelling units, aforestated, to defendants 5-13 respectively. In view of this, I.A No. 8565/95 under Order 40, Rule 1, C.P.C seeking appointment of nominee of defendants 5-13 as the receiver and I.A No. 11266/95 under Order 23, Rules 1 and 3, C.P.C are liable to be dismissed.

All these I.As stand disposed of accordingly.

Order accordingly.