SANJAY SINGH AND ANR. versus CENTRAL HIMALAYAN LAND DEVELOPMENT CO. LTD. on 21 February 2019

SUPREME COURT REPORTS

[2019] 5 S.C.R.

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SANJAY SINGH AND ANR.

v.

CENTRAL HIMALAYAN LAND DEVELOPMENT CO. LTD.

(Civil Appeal No. 1928 of 2019)

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FEBRUARY 21, 2019

[UDAY UMESH LALIT AND ASHOK BHUSHAN, JJ.]

Suit – Recovery of money – Appellants booked a residentialflat whereupon a villa was to be constructed by the respondent –Total consideration for villa was Rs.15,65,000/- – According toCappellants they paid all the installments – Thereafter, appellantsreceived demand notice from respondent for payment of balanceconsideration of Rs. 5,13,850/- towards principal sum and interestamounting to Rs.3,61,460/-, the total being Rs.8,73,556/- – Pursuantthereto, respondent filed a summary suit for recovery of the saidDamount which was dismissed – In First appeal, High Court condonedthe delay of 721 days and directed appellants to deposit Rs. 5,13,850/- in Court, and further directed respondent to handover thepossession of the villa to appellant – However, High Court reversedits earlier order and directed to release the amount of Rs.5,13,850/- and the possession of villa back to respondent – On appeal held:EThere was no reason for the High Court to direct reversal of thesituation – Further, there was no satisfactory explanation forcondoning delay of 721 days – In the totality of circumstances,High Court erred in condoning delay – Thus, order of the HighCourt condoning delay set aside and consequently, first appeal alsoFdismissed – Besides that, possession of villa directed to continue inpossession of the appellants and amount of Rs.5,13,850/- depositedin the Court to be made over to the respondent along with interestaccrued – Delay/Laches.

Allowing the appeal, the CourtG

HELD : 1. In the instant case, that the High Court in itsorder dated 16.04.2018 had sought to bring about a situationwhere the area of controversy could be minimized and at the sametime the possession of the villa could be made over the appellant.Appellant was directed to deposit the balance sale considerationH

of Rs.5,13,850/- in the Court and upon same being deposited,the respondent-company to hand over the possession of the Villa.The next order dated 23.05.2018 shows that the appellants haddeposited the sum as indicated and the possession was agreedto be handed over by the respondent by 15.07.2018. Thepossession of the villa was actually handed over. Thereafter, thematter came up before the High Court on 25.07.2018. The HighCourt accepted the explanation for condonation of delay andcondoned the delay of 721 days, subject to payment of costs ofRs.20,000/- to be made over by the respondent to the appellants.The High Court also observed that subject suit since was filedfor recovery of money and the same was dismissed and the appealwas against that decree, by an interim order the appellant cannotreceive possession of the disputed Villa constructed byrespondents. Further, High Court ordered to release the amountdeposited back to the respondents along with accrued interest.In the circumstances, the question for consideration is whetherthe High Court was justified in reversing the situation. In termsof the understanding between the parties as recorded in theearlier orders of the High Court, there was no reasonfor the High Court to direct reversal of the situation.[Paras 11 and 14][862-BC; 861-A-E; 862-C-D]

2. The delay to the tune of 721 days was condoned by theHigh Court when there was no satisfactory explanation. Therewas gross negligence on part of the respondent and theexplanation offered in support of the prayer for condonation doesnot appear to be correct. Taking totality of the circumstances,the delay ought not to have been condoned by the High Court.Therefore, the submission of the appellants is accepted. The ordercondoning delay is set aside. Consequently, the First Appealalso stands dismissed. [Para 15][862-D-E; F-G]

3. However, considering the developments that have takenplace while the appeal was pending in the High Court, it isdirected: a) The possession of the villa which was handed overto the appellants in pursuance of the order dated 23.05.2018 shallcontinue to remain with the appellants and be taken to be in termsof the Agreement entered into between the parties; b) Theamount of Rs.5,13,850/- deposited by the appellants in the A

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ARegistry of the High Court which stands converted into a FixedDeposit Receipt, upon maturity shall be made over to therespondent along with interest accrued thereon; c) The pendingappeal before the State Commission shall be dealt with on itsown merits. [Para 16][862-G-H; 863-A-B]

BCIVIL APPELLATE JURISDICTION : Civil Appeal No. 1928of 2019.

From the Judgment and Order dated 25.07.2018 of the HighCourt of Delhi at New Delhi in Regular First Appeal No. 876 of 2016.

Rajan K. Chourasia, Adv. for the Appellants.C

Rajat Sehgal, Ms. Ritagya Riti Singh, Praveen Rao, Ms. VandanaAnand, Advs. for the Respondent.

The Judgment of the Court was delivered by UDAY UMESH LALIT, J. 1. Leave granted.D2. This appeal is directed against the judgment and order dated25.07.2018 passed by the High Court of Delhi at New Delhi in RegularFirst Appeal No.876 of 2016.3

3. The appellants had booked a residential plot whereupon a villawas to be constructed by the respondent in a project called “Cloud-9 HillETown” in village Khabrar, Ramgarh, District-Nainital, Uttarakhand. Anagreement in that behalf was executed on 14.04.2004 in terms of whichthe total consideration for the villa was Rs.15,65,000/- and the villa wasto be completed within 30 months. Later, sale deed in respect of the plotwas registered in favour of the appellants on 14.05.2004. According toFthe appellants they had secured loan to the tune of Rs.13,30,000/- froma bank and had paid all the instalments as and when they were due. Onor about 03.10.2007 the appellants received a demand notice for paymentof balance consideration of Rs.5,13,850/- together with interest @ 24%.The amount of Rs.5,13,850/-was tendered by the appellants on 12.10.2007but the cheque was returned by the respondent.

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4. Thereafter, a statement of accounts was preparedby the respondent which reflected outstanding dues to thetune of Rs.5,13,850/- towards principal sum and interest amounting toRs.3,61,460/-, the total being Rs.8,73,556/-. Soon thereafter, therespondent filed a Summary Suit for recovery of said amount ofH

Rs.8,73,556/-. The Suit was registered as CS No.431/14/2008 on thefile of Additional District Judge, Tis Hazari, New Delhi.

5. A Consumer Complaint was filed by the appellantsbeing CC/110/2008 against the respondent submitting that though theoutstanding amount was tendered by the appellants on 18.10.2007, therespondent refused to accept the same unless the principal sum wasaccompanied with interest @ 24% and that the project was not completedin time as a result of which the appellants were put to loss. It wasprayed that the respondent be asked to deliver possession of villa alongwith all the facilities and accept the balance payment of Rs.5,13,850/-.The respondent contested the claim and submitted that the appellantsnever paid instalments as per schedule; that there was no delay on partof the respondent; and, therefore, the respondent was justified indemanding interest.

6. The complaint was allowed by District Forum-II, New Delhiby order dated 29.04.2010 which directed the respondent to deliver thecompleted villa to the appellants against the balance payment ofRs.5,13,850/- without any interest and further directed the respondent topay compensation to the tune of Rs.1,00,000/- to the appellants. Theorder passed by the District Forum-II is presently pending appeal beforethe State Commission, New Delhi.

7. The Civil Suit filed by the respondent was dismissed byAdditional District Judge-15 (Central), Tis Hazari Courts, Delhi by hisjudgment and order dated 30.07.2014. The principal issue framed waswhether the respondent was entitled to recovery of Rs.8,73,556/- asalleged? The case put up by the respondent was not accepted by thetrial court and rejecting all the contentions of the respondent the suit wasdismissed.

8. The respondent being aggrieved filed Regular First AppealNo.876 of 2016 in the High Court with an application to condone thedelay of 721 days in filing said appeal. The explanation offered in supportof condonation of delay was that the then advocate had not informed therespondent about the disposal of suit; that the respondent was, therefore,constrained to lodge a complaint against said advocate before the BarCouncil of Delhi, which was pending adjudication and that the respondentought not to suffer on account of the failure on part of their advocate.The appeal came up before the High Court on 16.04.2018. After goinginto the rival contentions, the High Court observed:

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A“Considering the facts and circumstances of this case, as recordedin the previous orders, where only some part of the totalconsideration is due and that too the same was tendered by theRespondents but was not accepted by the Appellant Company, itis directed that the balance sale consideration of Rs.5,13,850/-,shall be deposited by the Respondents in this Court within a periodBof four weeks. Upon the same being deposited, the AppellantCompany shall hand over the possession of the Villa for the peacefuloccupation and enjoyment of the Respondents. The AppellantCompany shall ensure that the Villa would be in liveable conditionand shall be complete in all respects.

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Considering the allegations made against the Company and thestatus report, which has been handed over by the police stationAmar Colony, it is directed that a responsible person from themanagement of the Appellant Company shall remain present inthe Court on the next date of hearing.

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The question, as to whether the Appellant Company is entitled tointerest due to the alleged delay in payment of the principal sum,shall be decided at the time of final hearing of the appeal. Originalstatus report is taken on record.

List on 23[rd] May, 2018 for final hearing. Trial court record beErequisitioned for the next date of hearing.”

9. The matter was, thereafter, taken up by the High Court on23.05.2018 when it was observed:

“The Respondent is stated to have deposited the money as directedon the last date, with the Registrar General of this Court. TheFamount shall be kept in a FDR on automatic renewal mode. Thepossession of the villa has not yet been given by the Appellant.They undertake that the possession of the fully completed villashall be handed over to the Respondents on 15[th] July, 2018.”

10. As per record, the amount of Rs.5,13,850/- which was statedto be balance payable towards the principal sum, was deposited by theappellants with the Registry of the High Court. The amount was,thereafter, converted into a Fixed Deposit Receipt awaiting final directionsin the matter. According to the order dated 23.05.2018, it was undertaken G

by the respondent that the villa would be handed over and the possessionof the villa was accordingly handed over to the appellants.

11. Thereafter, the matter came up before the High Court on25.07.2018. The High Court accepted the explanation for condonationof delay and condoned the delay of 721 days, subject to payment ofcosts of Rs.20,000/- to be made over by the respondent to the appellants.The High Court also observed:- “6. The subject suit was a suit for recovery of moneys filed by theappellant/plaintiff. For the settlement, the appellant/plaintiff wasdirected to hand over the villa constructed for the benefit of therespondents/defendants pursuant to an interim order passed by alearned Single Judge of this Court and whereby respondents alsodeposited a sum of Rs.5,00,000/- in this Court. There cannot bean interim order in a proceeding which is beyond the scope ofmain proceedings. The subject suit since was a suit filed by theplaintiff for recovery of moneys which has been dismissed andthe present appeal is against that decree, by an interim order therespondents cannot receive possession of the disputed flat/villaconstructed by the appellant in Cloud-9, Hill Town, Village Khabrar,Ram Garh, District Nainital, Uttarakhand. Therefore, it is orderedthat the amount deposited by the respondents in this Court bereleased back to the respondents along with accrued interestthereon within a period of four weeks from today andsimultaneously or before the respondents will hand over possessionback of the subject villa received by the respondents from theappellant pursuant to interim orders in this appeal to the appellants.”

The First Appeal was admitted and directed to be listed in duecourse as per the year of its seniority.

12. The aforesaid order dated 25.07.2018 is now under challenge.While issuing notice, this Court had stayed the operation of said order.

13. We have perused the record and considered rival submissionsadvanced by learned counsel for both the sides. The following featuresare clear:-

a) The balance sum of Rs.5,13,850/- which was supposed to bedue from the appellants was deposited by the appellants.

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Ab) In terms of the order dated 23.05.2018 the amount so depositedstands converted into a Fixed Deposit Receipt.

c) In terms of the order dated 23.05.2018 and as undertaken bythe respondent, possession of the villa was made over to theappellants.

B

14. In the instant case, that the High Court in its order dated16.04.2018 had sought to bring about a situation where the area ofcontroversy could be minimized and at the same time the possession ofthe villa could be made over the appellant. The next order dated 23.05.2018shows that the appellants had deposited the sum as indicated and theCpossession was agreed to be handed over by the respondent by15.07.2018. The possession of the villa was actually handed over. Inthe circumstances, the question for our consideration is whether theHigh Court was justified in reversing the situation. According to us, thesituation having been brought about in terms of the understanding betweenthe parties as recorded in the earlier orders of the High Court, there wasDno reason for the High Court to direct reversal of the situation.

15. But, what is more striking is that the delay to the tune of 721days was condoned by the High Court when there was no satisfactoryexplanation. In our view, there was gross negligence on part of therespondent and the explanation offered in support of the prayer forEcondonation does not appear to be correct. This is evident from the factthat no effective steps were taken to pursue the complaint which waslodged against the then advocate. In the petition for special leave, it wasasserted that the complaint against the Advocate was not being proceededwith and the respondent had remained absent on the relevant date. SaidFassertion was not answered satisfactorily in the affidavit in reply filed inthis Court. Taking totality of the circumstances, in our view the delayought not to have been condoned by the High Court. We, therefore,accept the submission of the appellants and set aside the order condoningdelay. Consequently, the First Appeal also stands dismissed.

G16. However, considering the developments that have taken placewhile the appeal was pending in the High Court, we pass followingdirections:-

a) The possession of the villa which was handed over to theappellants in pursuance of the order dated 23.05.2018 shall continue H

SANJAY SINGH AND ANR. v. CENTRAL HIMALAYAN LANDDEVELOPMENT CO. LTD. [UDAY UMESH LALIT, J.]

to remain with the appellants and be taken to be in terms of theAgreement entered into between the parties.

b) The amount of Rs.5,13,850/- deposited by the appellants in theRegistry of the High Court which stands converted into a FixedDeposit Receipt, upon maturity shall be made over to therespondent along with interest accrued thereon.

c) The pending appeal before the State Commission shall be dealtwith on its own merits.

17. With the aforesaid directions this appeal is allowed. No costs.

Ankit Gyan

Appeal allowed.

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