Judgment:
1. The above application made on notice of Motion dated 3rd September, 2008 is taken out by Asset Reconstruction Company (India) limited the defendant No.3 herein praying for following reliefs:-
(a) Leave be granted to the petitioner to serve a copy of this petition to the Indoworth (Thailand) Ltd. having its registered office at 75/101, 102 Ocean Tower, 2, 37th Floor, SOI Sukhumvit 19 (Wattana), Ashoke Road, Klongtoey Nuev, Wattana, Bangkok 10110,
(b) Declare that the contract for sale referred to in the petition stands rescinded. Alternatively an order be made rescinding the contract for sale of the immovable property of the Defendant No.2.
(c) Order be passed directing the plaintiff to restore possession of the said
immovable property of the Defendant No.2 to the petitioner within 7
days from the date of the order to be passed herein or within such
period as this Honble Court may deem fit and proper,
(d) Order be passed directing the plaintiff to pay to the petitioner all the profits which has accrued in respect of the immovable property of the Defendant No.2 from the respective dates on which the transfer was so obtained by the plaintiff;
(e) Ad-interim orders in terms of prayers (a) (b) (c) and (d) above;
(f) Pass such further or other order or orders and/or direction or directions be given as this Honble Court may deem fit and proper.
2. The above suit is filed praying following reliefs:-
(a) A decree for specific performance of the agreement for sale of all the assets of the Defendant No.2 as a going concern of the Plaintiff by directing the Defendant No.2 to forthwith execute and the defendant to cause to be executed the necessary deeds and documents for formal transfer of all the assets of the Defendant No.2 as a going concern to the plaintiff at and for the agreed price of Rs. 141 crores.
(b) A decree for compensation in addition to specific performance as claimed in paragraph 62 hereof.
(c) Alternatively and until in the event of the specific performance not being granted, a decree for such amount as pleaded in paragraph 63 above; or an enquiry into the damages/compensation and a decree for such sum as may be found due and payable to the plaintiff upon such enquiry.
(d) Injunction.
3. It is not necessary for this application to record facts for which the suit is filed. It is suffice to narrate that there has been a suit for specific performance of agreement of unspecified date for the relief mentioned hereinabove. In the suit an application being GA No. 2066 of 2007 was made. On this application this Court passed an order on 20th September 2007 by which the plaintiff/petitioner was directed to pay a sum of Rs. 140 Crores to the respondent No. 3 within a period of 90 days from the date of pronouncement of the order. Upon payment of the said sum the respondent No. 3 (applicant herein) was directed to arrange for sale of the assets of the units of the Respondent No. 2 pursuant to the bid submitted in response to the advertisement in the Economic Times dated 29th November 2002 issued by ICICI Bank and to execute such deed and/or document as may be necessary in this regard. In case of default, amongst other, the suit shall stand dismissed.
4. It is stated by the applicant after the said order was passed time and again the applicant called upon the plaintiff/petitioner to make payment of the aforesaid amount so that the said order could be carried out. In stead of complying with the said order by making payment the plaintiff/petitioner resorted to useless and vexatious exchange of letters. Indeed in order to show good gesture the applicant herein also agreed to extension of payment on condition of payment of interest at the rate of 10% per annum from the date of expiry of the said 90 days. In spite of such concession having been offered the plaintiff/petitioner one pretext or other failed and neglected and further refused to carry out the said order and the same has been rendered frustrated. Accordingly the applicant is entitled to get relief under Section 28 of the Act of 1963.
5. In the affidavit in opposition the plaintiff/petitioner has not denied and disputed the fact of passing of the said order, and it is stated that the said application is not maintainable on the ground that Section 28 of the Act of 1963 has no manner of application. It is alleged that at present no suit survives because of default committed by the plaintiff/petitioner for good reason. Moreover when the order itself provides for consequences of committing default the said section cannot be pressed into operation. It is alleged in the affidavit in opposition that it is the applicant who prevented the plaintiff/petitioner from taking any action in view of the fact that subsequent to passing of the said order dated 20 September 2007 the provision of Section 13 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act of 2002 (hereinafter SARFEASI Act 2002) has been invoked by issuing a notice under Section 13(4) of the SARFEASI Act. Accordingly this application is barred under the provision of 13(1) of the SARFEASI Act of 2002. Mr. Deb, learned Senior Advocate appearing for the defendant No.3 (applicant) while highlighting the facts stated in his clients application, submits that in view of the facts stated in the petition it is clear that the reliefs claimed in the application must be granted, as all the conditions mentioned in Section 28(1) of the Specific Relief Act, 1963 have been fulfilled. While drawing my attention to Section 28 sub-section 2(a) of the Specific Relief Act, 1963, (hereinafter referred to as Act of 1963) he urges that the Court shall direct the purchaser if he has obtained possession of the property under contract to restore possession to the vendor. By virtue of Section 28 sub-section 4 of the Act of 1963 he submits that no separate suit in respect of any relief which may be claimed under this section shall lie at the instance of the vendor or purchaser as the case may be. It is an admitted position that the plaintiff had not paid the consideration amount of Rs. 141 crores or any part thereof to the applicant within the period of 90 days from 29th September, 2007 or thereafter. As such the said contract as has been pleaded by the plaintiff in the plaint in its paragraphs 47, 51 and 52 is liable to be cancelled and/or rescinded. He further submits that provisions of Section 13(4) read with Section 13(9) of the Act, 2002 do not create any bar for making this application invoking Section 28 of Act 1963. Mr. A.K.Mitra, learned Senior Advocate while opposing this application submits that this application must be dismissed in limine as the conditions as required under Section 28 of the Act 1963 are not fulfilled to grant any relief. He submits that order dated 20th September 2007 passed on the application being G.A. No.2066 of 2007 is neither a preliminary order nor decree for which the applicant can obtain relief as prayed for herein. He submits that it will be clear from the aforesaid order that there has been a direction upon the plaintiff to make payment of the specified sum within a particular period and it also provides for consequence of non-payment namely dismissal of the suit. The payment could not be made within 90 days for various reasons as mentioned in the affidavit-in-opposition. No application has been made either by the plaintiff or by any of the parties for extension of time. No prayer has been made for setting aside of order of dismissal of the suit. Alleged extension of time mutually agreed for payment with interest till March 31, 2008 is of no substance because the parties cannot extend the time fixed by an order of Court intending to modify order of Court. Therefore, both the parties have accepted dismissal of the suit. He submits that when the order of the Court provides for consequence of default by the purchaser, application under Section 28 of the Specific Relief Act is not maintainable. He in support of his contention has relied on two decisions, one of Bombay High Court reported in AIR 1974 Bomb 104 and another of this Court reported in AIR 1985 Cal 243. The aforesaid two decisions according to him have ruled if no extension of time is applied for what would be the consequences. The said order dated 20th September 2007 since not being a decree for specific performance of any contract between the parties this application cannot be entertained. As regard claim for restoration of possession is concerned he submits that it will appear from the pleading that the plaintiff got possession and management of the three units of the defendant No.2 under different arrangements and for valuable consideration and not under or in pursuance of any contract for sale, long after the order dated September 20, 2007 had been passed and even after occurrence of the default in payment within 90 days. The defendant No. 2 appointed the plaintiff as custodian of the three units of the defendant No.2 on February 28, 2008, February 29, 2008 and March 3, 2008 respectively. The said order dated 20th September 2007 does not even envisage appointment of custodian. According to him restoration of possession under Section 28 of Act of 1963 arises under sub-section (2) thereof, only in case the purchaser having obtained possession of the property under the contract for sale. It is nowhere alleged in the petition that possession of the said three units of the defendant No.2 was made over to the plaintiff pursuant to any contract for sale between the plaintiff and defendant No.3. No case of restoration of possession has been made out in the petition. Thus restoration of possession is a mischievous prayer. It is nothing but an attempt to set at naught the custodian agreement which are for valuable consideration and under which the plaintiff has been in possession and management of the three units and constantly improving the said units and has incurred expenses for running of the said three units. There is no factual basis for the order on the prayer (c) of the petition. Prayer (c) is irrelevant and is sought for inending to circumvent the solemn agreements between the parties entered into long after the suit has stood dismissed. Even after filing of this petition defendant No.3, ARCIL has been receiving royalty in terms of the custodianship agreement. Royalties have been paid up to the month of October 2009 by the plaintiff to the ARCIL and It has duly encashed cheques and received payment.
6. Having heard the respective contention of the learned Counsel and having gone through the material placed before me in this application I find that only issue is whether the applicant herein is entitled to get relief under Section 28 of the Act of 1963. Accordingly provision of Section 28 of the Act of 1963 is set out hereinunder:
Section 28. Rescission in certain circumstances of contracts for the sale or lease of immovable property, the specific performance of which has been decreed.-(1) Where in any suit a decree for specific performance of a contract for the sale or lease of immovable property has been made and the purchaser or lessee does not, within the period allowed by the decree or such further period as the court may allow, pay the purchase money or other sum which the court has ordered him to pay, the vendor or lessor may apply in the same suit in which the decree is made, to have the contract rescinded and on such application the court may, by order, rescind the contract either so far as regards the party in default or altogether, as the justice of the case may require. (2) Where the contract is rescinded under sub-section (1), the court- (a) shall direct the purchaser or the lessee, if he has obtained possession of the property under the contract, to restore such possession to the vendor or lessor, and (b) may direct payment to the vendor or lessor of all the rents and profits which have accrued in respect of the property from the date on which possession was so obtained by the purchaser or lessee until restoration of possession to the vendor or lessor, and, if the justice of the case so requires, the refund of any sum paid by the vendee or lessee as earnest money or deposit in connection with the contract. (3) If the purchaser or lessee pays the purchase money or other sum which he is ordered to pay under the decree within the period referred to in sub-section (1), the court may, on application made in the same suit, award the purchaser or lessee such further relief as he may be entitled to, including in appropriate cases all or any of the following reliefs, namely:- (a) the execution of a proper conveyance or lease by the vendor or lessor; (b) the delivery of possession, or partition and separate possession, of the property on the execution of such conveyance or lease. (4) No separate suit in respect of any relief which may be claimed under this section shall lie at the instance of a vendor, purchaser, lessor or lessee, as the case may be. (5) The costs of any proceedings under this section shall be in the discretion of the court. On careful reading of the said Section according to me it emerges following things. Sub-section (1) basically enables the vendor or lessor to apply in the same suit in which decree is passed, to have contract rescinded. This relief can be granted in the event the purchaser or lessee as the case may be, fails to perform in terms of the decree for specific performance of the suit. It thus enables the vendee or the lessee to obtain relief apparently for rescinding the contract in reality to have the decree recalled. I think that this post decree action is provided in decree for specific performance of an agreement for sale unlike any other decree for the judgment debtor/vendor as restituting measure in case of default of decree holder/purchaser. Sub-section (2) enables the judgment-debtor after obtaining relief for rescission of the contract to get consequential reliefs from the Court for possession of the property in question and also payment of all the rents and profits payment accrued in respect of the property from the date of possession taken by the purchaser/lessee decree-holder till the date of delivery back of the possession to the vendor/lessor judgment-debtor. Sub-section (3) enables the purchaser and lessee for getting consequential relief in the event payment for consideration is made in terms of the decree for execution of the proper conveyance or lease upon vendor/lessor as the case may be, and delivery of possession also. It seems to us this purchaser as provided in the Section is nothing but mode of execution of the decree by the purchaser/lessee and in terms of the decree. Sub-section (4) expressedly bars separate suit being instituted for obtaining relief which may be claimed under the said Section. It is thus clear the suit may be barred but the execution proceeding is not barred. Unlike any other decree in a decree for specific performance of agreement for sale of immovable property or granting lease the judgment debtor has been given remedy so that the transaction between the parties can be brought to finality at an early date after obtaining the decree.
7. Thus it is manifest that the aforesaid Section can be invoked by the vendor under the circumstance mentioned in sub-section (I) and by the purchaser under the circumstance as mentioned in sub-section (iii), only when following conditions are satisfied:-
There must be a decree in any suit for specific performance of contract for sale, or lease of immovable property, the purchaser or lessee/decree-holder does not make payment of consideration or other amount within the time initially fixed or extended, in terms of order of the Court. Definition of decree is spelt out in Section 2(ii) (a),(b) of the Code of Civil Procedure which is set out hereunder:
Section 2- In this Act, unless there is anything repugnant in the subject or context,- (2) decree means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within section 144, but shall not include
(a) any adjudication from which an appeal lies as an appeal from an order,
or
(b) any order of dismissal for default.
8. While noting the language mentioned in the definition of decree in order to hold particular pronouncement of the Civil Court a decree it must be examined having regard to the language therein whether the same manifest conclusive determination of the rights with regard to all or any of the matters in the controversy of the suit. It appears further that no order can be said to be a decree nor an order for dismissal for default is a decree. It is specifically mentioned that a decree must be passed in a suit for specific performance of a contract for sale or lease of immovable property. As such in the decree itself there must be a final determination of the Court with regard to enforceability of the contract. I am of the considered opinion unless those conditions are satisfied Section 28 of the Act of 1963 cannot be invoked. In the context of the aforesaid discussion it is necessary to examine the case of the applicant. Naturally it has to be examined whether order dated 20th September 2007 can be treated to be a decree for the purpose of Section 28 of the Act of 1963 or not. Accordingly text of the said order is set out hereunder: The Court:- The application being G.A. No. 2066of 2007 is disposed of by the following order:- The petitioner will pay a sum of Rs. 141 crores to the responent no.3 within a period of 90 days from the date of pronouncement of the order. Upon payment of the said sum of Rs.141 crores, the respondent no.3 is directed to simultaneously arrange to sell the assets of the units of respondent no.2 pursuant to the bid submitted in response to the advertisement in the Economic Times dated November 29, 2002 issued by ICICI Bank and to execute such deeds and/or documents as may be necessary in this regard. In default of payment of the said sum or any part thereof, the reliefs sought in C.S.No. 62 of 2002, including, but not limited to the injunction order shall be automatically vacated and the said suit shall stand dismissed. There will be no order as to costs. On careful reading of the above order it depicts as follows:- The said order was passed on an application made by the plaintiff being GA No. 2066 of 2007 and therein the following prayers were made: (a) Injunction do issue restraining the defendants and/or their servants and/or agents and/or their associates from taking steps for transferring or issuing any public notice or advertisements inviting offers for transferring of all the assets of the defendant NO. 2 in India as a going concern or otherwise to any party other than the petitioner. (b) Mandatory injunction directed the defendant No. 3 to arrange for transferring the assets of the defendant No. 2 and its three units in India as a going concern to the petitioner at and for a price of Rs. 141 crores. In the context of the aforesaid prayer the Court passed an order in the above manner. From careful reading of the statement and averment made in the petition and also the order passed thereon I do not think as rightly contended by Mr. A.K. Mitra the aforesaid order could be said to be a decree, for specific performance of an agreement for sale of immovable property. In the order there is no mention of the agreement for sale. In my view a decree for specific performance for sale of immovable property there must be a specific mention in the decree of the agreement. According to me the aforesaid order is nothing but an order simplicitor for sale of the property at a price of Rs. 140 crores to be paid by the plaintiff within the time stipulated therein. It appears that in case of failure to make payment in terms of the said order, the suit will stand dismiss. From the statement and averment made in the petition as well as affidavit in opposition that the said time limit for making payment has expired long time back and there has been no attempt either by the plaintiff to apply for extension for good or bad reason. Hence as on today the suit now stands dismissed because of the aforesaid failure. Undoubtedly the relief contemplated under Section 28 of the Act of 1963 can be granted after suit is disposed of passing a decree, but here the said dismissal owing to default on part of the plaintiff cannot be equated with decree as contemplated in Section 28 of the Act of 1963. Therefore accepting the argument of Mr. Mitra I hold since the suit today stands dismissed no relief can be granted. I also hold that it could have been granted had there been a decree for specific performance as mentioned in Section 28 of the Act of 1963 as relief is granted only on disposal of suit on decree being passed. I cannot accept the argument of Mr. Deb that the aforesaid order should be a decree for specific performance of the agreement for sale in view of the aforesaid discussion. I therefore, hold on the facts and circumstances of this case and on the discussion recorded above this application cannot be maintained invoking Section 28 of the Act of 1963 since the conditions explained by me have not been fulfilled. Accordingly no relief is granted on this application. Parties will be entitled to take steps in accordance with law. It would also be open for the applicant herein to take such legal measure as may be advised to obtain relief for possession as prayed for herein.