Bdr Builders And Developers Private Limited vs. Sh. Shrichand Bijlani

Held

The Court held that the direction to rectify remaining defects on the second, third, and terrace floors within three months was justified, and granted an additional three months for defects not entailing removal of load-bearing structures. The Court found the Executing Court's remark that SDMC's compounding of deviations was immaterial to be misplaced, as SDMC is the competent authority. The Court modified the interim orders, vacating the injunction regarding the first floor but maintaining the restraint on the petitioner creating third-party rights in the basement until the Executing Court finally decides the matter. The Court directed the Executing Court to re-examine the modifications to the basement stairs and skylights, considering the SDMC's circulars and compounding of deviations, and also to determine the need for modifications in light of the agreed site plan. The Court did not comment on whether possession was offered or refused, or the quantum of penalty, deeming these issues for the Executing Court to decide.

Facts

The petitioner, BDR Builders and Developers Private Limited, filed a suit against the respondent, Shrichand Bijlani, concerning property at C-11 Nizamuddin East, New Delhi. The suit was settled via a compromise agreement recorded by the court on November 10, 2017, and disposed of on December 23, 2017. The respondent later filed an Execution Petition seeking directions for the petitioner to carry out construction as per the compromise. The petitioner filed objections under Section 47 CPC. The impugned order dated September 5, 2020, directed the petitioner to carry out repairs/modifications within three months and declined to vacate an interim order restraining the petitioner from creating third-party rights in the first floor and basement. The petitioner assailed this order before the High Court.

Key Issues

1. Whether the petitioner has rectified all defects as per the compromise/settlement agreement, particularly concerning the staircase to the basement and modifications to windows and stone cladding? (Mixed question of law and fact, turning on the interpretation of the Compromise/Settlement Agreement and the reports of the Local Commissioners). 2. Whether the respondent is entitled to claim penalty for alleged deviations from the compromise/settlement agreement, and if so, what is the quantum? 3. Whether the interim order restraining the petitioner from creating third-party rights in its share of the property (first floor and basement) is equitable and should continue? Petitioner's arguments: The petitioner contended that minor defects were rectified, and major deviations, like the staircase construction, were in accordance with the Sanctioned Plan by the South Delhi Municipal Corporation (SDMC) and modified Building Bye-Laws, or were compounded by the SDMC. They argued the Execution Petition was filed malafide after the petitioner demanded payment of GST and balance consideration. They also argued that offering possession ended their obligation and the penalty clause could not be enforced. Respondent's arguments: The respondent argued that the construction was not in terms of the Compromise/Settlement Agreement, leading to refusal of possession and entitlement to penalty.