construction Archives

13 May

Delhi High Court Upholds Need for Concrete Evidence in Dispute Alleging Unauthorised Construction on Public Land

Prime Legal

Blog #dda, #delhihighcourt, #development, #unauthorizedconstruction, construction

Case Name: Sudhir Bidhuri v. Delhi Development Authority & Ors

Case No.: W.P.(C) 6721/2024

Dated: May 10,2024

Quorum: Justice Manmeet Pritam Singh Arora

FACTS OF THE CASE:

The current petition, which is of public interest, asks that respondent nos. 1 through 3 be instructed to take prompt action in order to stop respondent no. 4’s unauthorised and illegal construction at Khasra No. 22/2, District Park, Madan Pur Khadar, Sarita Vihar, New Delhi 110076. The petitioner additionally asks for the boundary wall to be taken down and the respondent no. 4’s unlawful construction at the aforementioned property to be discontinued.

The petitioner sought directions against respondent no. 4’s illegal and unauthorised construction at Khasra No. 22/2, District Park, Madan Pur Khadar, Sarita Vihar, New Delhi-110076 in the case of Sudhir Bidhuri v. Delhi Development Authority & Ors. (W.P.© 6721/2024), which was filed in the Delhi High Court.

The petitioner asked that the boundary wall’s construction and dismantling be halted right away. With the cooperation of representatives from respondent nos. 1 through 3, the petitioner claimed that respondent no. 4 was building without the required permits and against sanction plans. Nonetheless, Khasra No. 22/2 is not a component of the District Park, according to the Delhi Development Authority (DDA).

LEGAL PROVISIONS:

Section 344(2) of the DMC Act Unauthorised building activity must be immediately stopped by the police, and any workers who are on the property must leave along with any construction equipment, including tools and machinery.

CONTENTIONS OF THE PETITIONER:

The petitioners’ counsel argued that Respondent No. 4 is allegedly engaging in unlawful and unauthorised building on government property without the required permits and in contravention of sanction plans, all while actively cooperating with respondents’ personnel, according to learned counsel for the petitioner.

According to a letter dated January 18, 2023, the SHO PS Sarita Vihar, New Delhi received from the Assistant Engineer Building Central Zone (MCD), Lajpat Nagar, New Delhi, directing the SHO to take action under Section 344(2) of the DMC Act against the unauthorised construction being carried out at the aforementioned property and to immediately stop the same.

They claim that as a result, on February 25, 2023, the S.H.O. PS Sarita Vihar wrote to the Deputy Commissioner, MCD Central Zone, Lajpat Nagar, New Delhi, alerting him to the illegal construction occurring at the aforementioned property and promising to provide the required police support whenever needed.

CONTENTIONS OF THE RESPONDENT:

Speaking on behalf of the respondents, the learned attorney argued that Learned counsel for DDA, who appears on advance notice, states that the District Park of DDA is situated at Khasra Nos.22/3 and 22/4 and Khasra No.22/2 is not a part of the District Park.

According to the learned counsel for MCD, the aforementioned letters from the Assistant Engineer and the SHO are about a different property that Mr. Hardeep owns that is located across from the property that is being complained about. He claims that at the location of the complaint, respondent no. 4 is not carrying out any unauthorised or illegal construction.

The petition has been brought because of a long-standing rivalry between the families of respondent no. 4 and the petitioner, according to learned counsel for respondent no. 4.

COURT’S ANALYSIS AND JUDGMENT:

The court determined that, Since respondent no. 4 is not engaging in any unlawful or unapproved construction or encroachment on public land, the application and the current writ petition are dismissed. This is stated by the learned counsel for the DDA and MCD.

The court held that based on the petitioner’s argument and post the DDA’s official explanation were taken into consideration by the court. It’s possible that the court decided in favour of the DDA, highlighting the fact that Khasra No. 22/2 is not a component of the District Park, given the circumstances.

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Judgment reviewed by Riddhi S Bhora

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9 May

Delhi High Court Upholds Settlement Agreement at Reduced Interest Rate, Safeguarding Appellant’s Legal Rights

Prime Legal

Blog #agreement, #property, #rights, #settlement, construction, delhi high court, interest rates

Case Name: Anil Sharma & Ors v. Genesis Finance Co. Ltd. & Ors

Case No.: RFA(OS)(COMM) 39/2019

Dated: May 08, 2024

Quorum: Justice Vibhu Bakhru and Justice Tara Vitasta Ganju

FACTS OF THE CASE:

In this intra-court appeal, the appellants have challenged a judgement and decree dated 27.03.2019 (referred to as the challenged order) issued by the learned Single Judge in CS(COMM) 307/2016, which is captioned Genesis Finance Company Ltd. v. Anil Sharma & Others.

By the contested order, the learned single judge granted respondent no. 1’s application under Order XIIIA of the Code of Civil Procedure and issued a preliminary decree in accordance with Order XXXIV Rule 4 of the CPC, stating that the plaintiff was entitled to recover ₹2,03,00,000/-as a joint and several recovery from the appellants and respondent nos. 2 and 3 (defendants in the suit), together with interest at the rate of 18% annually from the date of the lawsuit’s institution until its realisation and 24% annually from the Settlement Deed dated 20.01.2014 until the date of the suit’s institution, or 31.03.2016.

Furthermore, the educated Single Judge had also ordered costs to be measured at ₹2.5 lacs. The learned Single Judge gave the respondent nos. 2 and 3 and the appellants six months to pay the plaintiff’s debt; if they fail to do so, the plaintiff may seek a final decree for the sale of the mortgaged properties, or a portion of them, to recoup the outstanding amounts.

The defendant had filed the aforementioned suit in order to recover ₹4,15,14,023.76/- (Rupees Four Crores Fifteen lakhs Fourteen thousand Twenty-Three and Seventy-Six paise only) as well as pendente lite and future interest at the rate of 36% per annum (reducing). The plaintiff also requested a decree for the sale of mortgaged properties as stated in Paragraph 4 of the complaint.

The appellants have based their defence on the claim that they were misled into signing a Loan Agreement with the plaintiff on May 19, 2011 (henceforth referred to as the Loan Agreement) on the false impression that the loan came with a simple interest rate of 17.67% annually.

On the other hand, the loan was structured with an interest rate of 17.67% (flat), which, when calculated using the decreasing balance approach, amounted to about 30.08%. This assumption was made when the documentation was created.

The experienced single judge concluded that the appellants had no chance of winning their defence. Based on the appellants’ admission of the payment schedule that was a component of the loan agreement, the aforementioned conclusion was reached. Furthermore, there was no disagreement about the parties’ agreement to settle their differences over the outstanding liability and interest that was due on it when they signed the Settlement Agreement.

LEGAL PROVISIONS:

Section 138 of the Negotiable Instruments Act, 1881. Penalises the dishonouring of any cheque written for “any debt or other liability” that has been partially or fully paid. Furthermore, there is coextensive accountability between the major debtor and the guarantor. So, in accordance with section 138, N.I., the guarantor cannot avoid liability.

CONTENTIONS OF THE APPELLANTS:

According to the appellants’ learned counsel, they were under the false impression that the equivalent monthly installment for loan facility repayment was ₹11,68,735/-. Nevertheless, they had paid back ₹2,61,98,620/- against a loan of ₹2,75,00,000/-, or 22.4 equal monthly installments. The plaintiff argued that the EMIs were based on a 30.08% annual interest rate, but that the plaintiff had deceitfully convinced appellant nos. 1 through 3 to agree to pay interest at the rate of 17.67%.

According to his submission, if the annual percentage rate for the EMIs was 17.67%, the corresponding monthly installment would be ₹9,89,644. He presented evidence that the appellants signed the Settlement Agreement at the time the mother of appellants nos. 1 and 3 was brought into the intensive care unit. The appellants acknowledged that ₹2,03,00,000 was still owed as of January 20, 2014, but they had signed the Settlement Agreement in error because they had put their trust in the plaintiff.

Additionally, he argued that the plaintiff had taken advantage of the appellants’ pressing need for money to force them to sign on the dotted line. He argued that the Settlement Agreement was unenforceable because it was signed while the appellants were extremely agitated and not in a normal mental state due to the mother of appellants nos. 1 and 3 being critically ill and admitted to the intensive care unit due to multiple organ failure.

The court determined that the parties in question in the debt Agreement, the defendants committed to repaying the debt over the course of 36 monthly installments. The fixed amount for the monthly installment was ₹11,68,735/-. Consequently, there could be no misinterpretation of the payable interest.

COURT’S ANALYSIS AND JUDGMENT:

According to the court’s ruling, interest is computed over the whole loan duration. Thus, in this instance, the appellant would be required to pay a total of 53.01% in interest over the course of three years, or 17.67% annual interest. The appellants would be required to return ₹4,20,74,460/-, with the aforementioned interest being payable on the whole ₹2,75,00,000/-loan principal. Because the repayment schedule was attached to the loan paperwork and stated that the total amount above was due, the appellants could not have been misled about the method used to calculate the interest.

The court determined that the plaintiff had filed complaints under Section 138 of the NI Act, which were pending in the Dwarka courts, because the appellants’ checks had been returned unpaid. Therefore, there could not have been any doubt at that point regarding the appellants’ knowledge of the conditions of the Loan Agreement. The parties to mediation were referred to by the court, and as a result, the appellants entered into a Settlement Agreement that was included in the mediation proceedings.

The appellants had complete knowledge of the plaintiff’s allegation, the court further noted. It is evidently an afterthought to argue that the appellants were not in a proper state of mind since their mother was in the intensive care unit (ICU) at the relevant period. The appellants did not make any such claim in their written declaration. Furthermore unsubstantial is the claim that the appellants were not given access to the whole Settlement Agreement. Moreover, the written declaration that the defendants filed makes no mention of this kind. As said earlier, there is no disagreement regarding the implementation of the Settlement Agreement.

Additionally, take note of the fact that even though the Settlement Agreement is clear and stipulates that interest will be paid at a rate of 36% annually on a decreasing balance basis, the learned Single Judge had lowered the pre-suit interest rate to 24% annually. The plaintiff has agreed to the impugned order’s reduction in interest rates from 36% to 24% annually, even though it is not discussed in it. We see no need to investigate this further as a result.

Judgment reviewed by Riddhi S Bhora.

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29 Apr

Limitation is an inherent aspect of the arbitrable point, observes Karnataka High Court in a construction case

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Blog #arbitration, #Karnataka High Court, construction, limitation act

Case Name: Shivaraj Kamshetty v. The Managing Director, Karnataka State Agricultural Marketing Board & Ors

Case No.: CIVIL MISC PETITION NO.200003 OF 2022

Dated: April 19,2024

Quorum: Hon’ble Justice C. M. Joshi

FACTS OF THE CASE:

Under Section 11 of the Arbitration and Conciliation Act, 1966, a petition has been submitted in order to appoint an arbitrator to mediate the disagreement that has arisen between the petitioner and the respondents. The responders had requested proposals for the work of building a building at Kalaburagi, and the petitioner claims he is a reputable Class-I Contractor with over 35 years of expertise.

On August 22, 2011, the petitioner and the respondents entered into an agreement after the petitioner’s bid was accepted by the respondents. A sum of Rs. 109.00 lakhs was agreed upon to be paid for the completion of the work. In accordance with the specifications and drawings provided in the agreement, the petitioner successfully finished the contracted task.

The respondents granted approval on March 25, 2014, for the petitioner to finish the excess work that was assigned to him. The total amount of work completed was Rs. 1,22,16,239/-as a result of additional work that was also approved by the responders on May 7, 2015. The respondents had a delay in responding to the final bill, which was submitted to them on September 28, 2015, as a result of their approval of the additional work.

On March 25, 2014, the respondents gave the petitioner permission to complete the extra work that had been given to him. Because of additional work that was also allowed by the respondents on May 7, 2015, the total amount of work accomplished was Rs. 1,22,16,239/-. Due to their acceptance of the additional work, the responders took longer than expected to respond to the final bill, which was delivered to them on September 28, 2015.

The petitioner had corresponded with the respondents on multiple occasions between 2011 and 2017, disputing various points, including the computation of the dues and the 10% margin of profit. In the end, the petitioner served a legal notice on May 16, 2020, demanding payment of Rs. 2,53,22,934/-, to which the respondents replied on June 16, 2020.

The petitioner requested that the respondents designate a single arbitrator in accordance with Clause 4 of the Special Conditions of Contract Read With Clause 24 of the General Conditions of Contract. Since the respondents refused to agree to the arbitrator’s appointment, the petitioner was forced to file an application with this court pursuant to Section 11 of the Arbitration and Conciliation Act.

CONTENTIONS OF THE PETITIONER:

The petitioners’ counsel argued that Shivaraj Kamshetty was aboard a bus from Mangaluru to Udupi on December 27, 2009. Shivaraj’s bus was involved in a collision with another bus (registration number KA-01-F-8534) that was driven carelessly and rashly close to Pavanje village. Shivaraj suffered severe injuries as a result, and A.J. Hospital admitted him.

The petitioner argues that the respondents had requested bids for the construction of a building at Kalaburagi, and he is a reputable Class-I Contractor with over 35 years of experience.

In addition, the petitioner claims to be a businessman who makes Rs. 90,000 a month and that the accident prevented him from making money from his venture. He has also filed a claim suit under Section 166 of the Motor Vehicles Act, 1988, requesting payment to the owner and insurance company of the offending vehicle in the amount of Rs. 40,000,000.

CONTENTIONS OF THE RESPONDENT:

Speaking on behalf of the respondents, the learned attorney argued that the arbitration proceedings were unenforceable due to the petitioner’s claim being time-barred. He argues that even after the respondents had taken into account all of the petitioner’s arguments, the petitioner had made false accusations against them. As a result, the petition had no validity and could be rejected.

It was contended by the respondents that the arbitrator has authority over the limiting question. The argument put forth was that the arbitrator ought to determine whether the claims are precluded by limitation.

The ruling in a high court decision, which determined that the question of limitation is a combination of factual and legal inquiry, was cited by the respondents. As such, the arbitral tribunal ought to make that decision. Respondents stressed that Section 11 of the Arbitration and Conciliation Act (A&C Act) permits the court to reject arbitration only in cases where the claims are clearly barred by statute of limitations.

LEGAL PROVISIONS:

Section 100 of Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966. Subject to the restrictions imposed by this Act or any other enactment, the Board will function as a body corporate with perpetual succession, a common seal, and the ability to sue or be sued in its corporate name. It will also be able to acquire, hold, and dispose of moveable and immovable property, enter into contracts, and carry out any other necessary, appropriate, or expedient actions for the purposes for which it was established.
Sections 111 & 112 of the K.A.P.M (R&D) Act, 1966. The major responsibilities of the Board are listed in these sections. Educating people about controlled marketing, supporting market committees that are struggling financially, encouraging the grading and standardisation of agricultural products, and enhancing infrastructure for the transportation and sale of agricultural products are a few of these duties.

COURT’S ANALYSIS AND JUDGMENT:

The court determined that, in light of Clause-24 of the General Conditions of Contract, an arbitrator must be appointed to hear the disagreement that has arisen between the parties under these circumstances.

In response to a request from this Court, all parties have agreed that Smt. Premavathi M. Manogoli, District Judge (Retd.), Plot No. 56, Teachers Colony, Near Jhanayogashram, Vijayapura, should be appointed as the only arbiter.

The court held that the petition was allowed. The court noted that although the respondents contested the arbitration clause due to the claim’s limitation, they did not contest the existence of the arbitration agreement. According to this ruling, the arbitrator has the authority to decide the limitation problem since it is an integral part of the arbitrable point.

The Supreme Court had previously ruled that the question of limitation is a mixed factual and legal matter that must be decided by an arbitral panel. The court relied on this ruling; The court also made it clear that Section 11 of the A&C Act permits it to reject arbitration only in cases where the claims are fundamentally precluded by statute.

Judgment reviewed by Riddhi S Bhora

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