TMI Blog2016 (2) TMI 1264X X X X Extracts X X X X X X X X Extracts X X X X ..... aresh Chandra and his family members, which in turn would show the so-called loan was merely a camouflage but in reality consideration paid by newly inducted members to Mr.Naresh Chandra towards sale of land in question. Has DDA been able to establish that trail of loan advanced by newly inducted members of the society ends in hands of Mr.Naresh Chandra and his family members? - HELD THAT:- The answer is no - No material whatsoever has been placed on record by DDA to show that the loan advanced by the newly inducted members of the society ended in the hands of Mr.Naresh Chandra and his family members. Particular emphasis was placed upon balance sheets of the society by learned senior counsel for DDA to show the end of the trail of money (loan) in the hands of Mr.Naresh Chandra and his family members. However, the balance sheets of society do not help the cause of DDA, for the balance sheets merely show various sum(s) were advanced by newly inducted members of the society viz. Mr.Sanjay Khurana and other NRIs to the society from time to time. But the trail of money gets cold here. There is no material to show that said sum(s) advanced by newly inducted members of society to the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (and the time so specified shall be of essence of the contract) after obtaining sanction to the building plan, with necessary designs, plans and specifica-land and complete in a substantial and workmanlike manner a building for Hospital with the requisite and proper walls, sewers and drain and other conveniences in accordance with the sanctioned building plan and to the satisfaction of such municipal or other authorities. (5) (a) The Lessee shall not sell, transfer, assign or otherwise part with possession of the whole or any part of the said land or any building thereon except with the previous consent in writing of the Lessor which he shall be entitled to refuse in his absolute discretion. PROVIDED that such consent shall not be given for a period of ten years from the commencement of this Lease unless, in the opinion of the Lessor, exceptional circumstances exist for grant of such consent. PROVIDED FURTHER that, in the event of the consent being given the Lessor may impose such terms and conditions as he thinks fit and the Lessor shall be entitled to claim and recover the whole or a portion (as the Lessor may in his absolute discretion determine) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he society to show cause as to why the lease-deed dated June 11, 1996 be not cancelled alleging breach of a condition of the lease, in that, (office-bearers) of society having sold the demise land to a third party in a clandestine manner in order to earn profit out of a concessional allotment obtained in the name of the society. (We may note here that DDA also sought to determine the lease on the ground of non-construction of hospital by the society within the prescribed period. However we may not burden ourselves with this aspect of matter inasmuch as the appellant DDA has not challenged the findings returned by the learned Single Judge on the aspect of non-construction of the hospital in the instant appeal). 7. Being relevant, we note the following portion of the show cause notice dated April 09, 2009 issued by DDA:- AND WHEREAS as per clause 5 (a) of lease deed the Lessee shall not sell, transfer, assign or otherwise part with the possession of the whole or any part of the said land or any building thereon except with the previous consent in writing of the lessor which he shall be entitled to refuse in his absolute discretion. AND WHEREAS a complaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh Passi .... General Secretary iv) Dr.Ish Kumar .... Treasurer v) Mr.Naresh Chandra .... Member vi) Ms.Shashi Singhal .... Member vii) Mr.Sanjay Khurana .... Member e) Investigations conducted into the affairs of the society revealed that Mr.Naresh Chandra was misusing the funds of the society by transferring the same i.e. funds in the bank accounts of his family members. Investigations further revealed that in the year 2003-2004 Mr.Naresh Chandra was entrusted with a loan of a sum of ₹ 10.3 crores for construction of hospital but he i.e. Naresh Chandra misappropriated said loan by various means. f) In the year 2007 a settlement was arrived between Mr.Naresh Chandra and his associates on one hand and (new) members of Governing Body of society whereby Naresh Chandra and his associates agreed to have no connection with society or its properties as also to return all documents relating to society lying in their possession. On the basis of aforesaid settlement, FIR registered against Nares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated June 02, 2009 passed by DDA cancelling the allotment of the land in favour of society, inter-alia, reiterating the averments/submissions made by the society in its reply to the show cause notice, contents whereof we have summarized in the preceding paragraph. 11. In the counter affidavit filed, DDA firstly highlighted the facts stated by the society in its reply to the show cause notice, particularly the facts relating to the change in the constitution of the Governing Body of the society. In addition thereto, DDA highlighted that Naresh Chandra, the erstwhile President of the society, had stated in a letter dated December 23, 2008 written by him to DDA that Mr.Sanjay Khurana had issued a cheque in sum of ₹ 2,34,67,290/- in favour of the society towards construction of the hospital on the land and an agreement was executed between the society and M/s.Nidhi Builders for construction of the hospital soon after receipt of money by the society from Mr.Sanjay Khurana. 12. After highlighting aforesaid facts, DDA justified its action of cancelling allotment of land in favour of society in its counter affidavit in the following manner:- 11. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e averments/submissions made by it in the reply to the show cause notice as also in the writ petition filed by it. In addition thereto, following averments were made by the society in its rejoinder:- a) On February 15, 1995 the society deposited a sum of ₹ 1,23,63,875/- with DDA after taking loan from Nidhi Builders. Thereafter the society further paid sums of ₹ 8,18,121/- and ₹ 15,900/- to DDA again after taking loan from Nidhi Builders. Additionally, the society had taken loans from Nidhi Builders, HUDCO and others from time to time to make payments to DDA as also to meet other expenses of the society including cost of construction of the hospital. The balance sheet of the society reflects that amount(s) of ₹ 1,85,33,576/-, ₹ 26,00,000/- and ₹ 11,78,093/- were outstanding as loans to Nidhi Builders, HUDCO and others respectively. c) On March 11, 2002 the society entered into a loan agreement with Dr.Ish Kumar, Sanjay Khurana and Dr.Rakesh Passi whereby Dr.Ish Kumar, Sanjay Khurana and Dr.Rakesh Passi lent a sum of ₹ 2,34,67,290/- (US $ 5,00,000) to the society for a period of nine years with interest @ 6% per annum. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vour of the society and it is the society which is prohibited from selling, transferring, assigning the land/building constructed thereon. The privity of DDA under the perpetual lease-deed dated June 11, 1996 is with the society and not with the members of the society. e) The expression otherwise part with possession‟ occurring in clause II(5)(a) of the lease-deed dated June 11, 1996 have to be read in ejusdem generis to sale, transfer, assignment by society to another entity and cannot be read as prohibiting a change in membership. f) Notwithstanding the change in membership of the society, the society continues and will continue to hold the land as the lessee and thus no case of violation of any terms of the lease-deed dated June 11, 1996 can be made out. (We again repeat that we are not noting the findings returned by the Ld. Single Judge on the aspect of non-construction of hospital by society in the prescribed period for appellant DDA has not challenged the findings returned by the Ld. Single Judge on the aspect of non-construction of hospital in the present appeal). 16. Aggrieved by the aforesaid, appellant DDA has filed the present Letters P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total ₹ 9,00,67,803.43 ₹ 7,77,74,299.31 19. Counsel highlighted that aforesaid chart/table, when analyzed in conjunction with the recording contained in FIR No.367/2005 registered against Mr.Naresh Chandra at the behest of Mr.Sanjay Khur ana that We the NRI‟s have contributed about 14 crores of rupees out of which Mr. Naresh Chandra and his wife have taken 4.75 crores for the land and 8 crores for the construction of the hospital‟ as also the recording contained in compromise deed dated April, 2007 entered into between society and Mr.Naresh Chandra that Trust (society) has advanced from time to time a sum of over ₹ 8,18,53,802/- given to the Company (Nidhi Builders, a company whose Managing Director was Mr.Naresh Chandra) towards the construction agreement including mobilization advance, which was given to the Company by the Trust (society)‟ leaves no manner of doubt that the newly inducted members of the society (members inducted around the year 2002 such as Mr.Sanjay Khurana and other NRIs) had paid consideration to Mr.Naresh Chandra, the President of society a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olves a decision by the owner of the original property to assert his title to the product in place of his original property. VI Change of position is a valid defence to avoid restitution but the change of position must be in good faith. The defence of change of position should be applied on case to case basis as the law of restitution is based on unjust enrichment of the defendant. VII Where an innocent defendant's position is so changed that he will suffer an injustice if called upon to repay, the injustice of requiring him so to repay outweighs the injustice of denying the plaintiff restitution. If the plaintiff pays money to the defendant under a mistake of fact, and the defendant then, acting in good faith, pays the money or part of it to charity, it is unjust to require the defendant to make restitution to the extent that he has so changed his position. VIII Benefits acquired by fraud, breach of confidence, breach of fiduciary relationships or by other wrong doings do not get benefit under the defence of change of position. Change of position as a defence has to be casually linked to the receipt that makes it inequitable for the recipient to make ..... X X X X Extracts X X X X X X X X Extracts X X X X
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