IN THE HIGH COURT OF KERALA AT ERNAKULAM
AS No. 363 of 1993(D)
1. THOMAS
... Petitioner
Vs
1. DR.A.A.HENRY
... Respondent
For Petitioner :SRI.S.EASWARAN
For Respondent :SRI.M.C.SEN (SR.)
The Hon'ble MR. Justice KURIAN JOSEPH
The Hon'ble MR. Justice HARUN-UL-RASHID
Dated :06/02/2008
O R D E R
KURIAN JOSEPH & HARUN-UL-RASHID, JJ.
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A..S. NO.363 OF 1993
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Dated this the 6th day of February, 2008.
JUDGMENT
Harun-Ul-Rashid, J.
This appeal is filed by defendants 2 and 3 in O.S. No.45 of 1990 on
the file of the II Additional Sub Court, Ernakulam against the decree and
judgment dated 19.10.1992. Respondents 1 to 3 herein as plaintiffs filed
the suit for a decree for setting aside Exts.A17 and A18 sale deeds
assigning the first defendant’s ownership over the plaint schedule property
and conveying his rights therein to defendants 2 and 3 and to order
defendants 2 and 3 to assign the right, title, interest and possession
obtained by them over the plaint schedule property by the above sale deeds
to any one of the plaintiffs or to the plaintiffs jointly as required by them
by executing a registered document and pay the plaintiffs the rent due and
received from the shop rooms by defendants 2 and 3 with 12% future
interest , failing which to allow the plaintiffs to deposit the consideration
in court and get the document of assignment executed in their favour
through court, for recovery of possession of the plaint schedule property
A.S. NO.363/1993 2
and for other ancillary reliefs.
2. By the judgment under appeal, the court below set aside
Exts.A17 and A18 sale deeds and decreed the suit. By the decree,
defendants 1 to 3 were directed to reconvey the plaint schedule properties
to the plaintiffs or to any one of them as required by the plaintiffs by
executing a registered document at the expense of the plaintiffs on receipt
of consideration of Rs.1,20,000/-. It was also ordered that the plaintiffs
will be entitled to the rent received by defendants 2 and 3 from the shop
rooms with future interest at the rate of 6% per annum till realization,
excluding the building taxes paid from 13.12.1989, from defendants 1 to 3
and from their assets. It was further directed that if defendants 1 to 3 fail
to comply with the above directions within three months from the date of
the decree, the plaintiffs will be allowed to get the document of assignment
executed in their favour or in favour of any one of them and will be
allowed to recover possession of the property through court. The plaintiffs
were also allowed to realize the costs of the suit from defendants 1 to 5 and
the 6th defendant was entitled to realise costs from the plaintiffs.
3. Parties to this appeal are referred to as plaintiffs and defendants
as in the suit for the sake of convenience. The facts necessary for
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disposal of this appeal in brief as per the pleadings in this case are as
follows:
Plaintiffs 1 and 2 and the late husband of the third plaintiff and defendants
1, 4 and 5 are brothers. They are the owners of a complex of shop rooms
commonly known as ‘Anand Bazar’. At the time of purchase of the
property with the buildings thereon in the year 1972 by the owners, it was
constructed as a line of shop rooms on the east, west and north
interconnected with common urinal and four godowns on the northern
extremity on the east and west with a garden in between the shop rooms, in
the middle. After purchase of the property, the owners constructed a three
storied building in the open space provided as garden, extending over to
the existing shop rooms on the three sides. There were passages for
ingress and egress from the main road on either side of the shop rooms
and the ground floor was kept as car parking area. Various facilities
including urinals, stair cases, passage, veranda, water and electric
connections were all common. According to the plaintiffs, six brothers
who are the owners of the entire property wished and intended that the
entire property as constructed and existed should be continued to be
owned by them and their successors only, that the situation of the
buildings, the lie of the property and the constructions made were
intended for common use and that any portion or part thereof should not go
A.S. NO.363/1993 4
to an outsider since such an eventuality will disturb the common purpose
and the common utility of the premises. It was averred in the plaint that to
fulfill the wishes and intention as mentioned above, the six brothers
entered into a registered agreement on 24.2.1998 and that since the
owners desired that the property and the buildings should be retained as
common, the parties mutually agreed that individual owners shall not
alienate, assign or mortgage or create liability over his share of the
property to third parties. It was further agreed that in the contingency of
an owner’s financial difficulties requiring and necessitating sale of his
share or portion of his building and property, he shall sell the same to any
one of the other owners who is prepared to take the assignment and not to
an outsider. Mediation was also provided to fix the value in case of a
dispute about the value of the portion intended to be sold and that such
value was to be accepted as final by all concerned. Alienation to an
outsider or any one other than the six brothers was absolutely prohibited.
The father of defendants 2 and 3 was one of the tenants of the shop rooms
and the said shop room was let out to him by the first defendant who is the
owner of two shop rooms on the ground floor of ‘Anand Bazar’. There was
a litigation between the said tenant and the landlord which is described in
paragraph 4 of the plaint. According to the plaintiffs, the father of
defendants 2 and 3 was illdisposed towards the plaintiffs and was waiting
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for an opportunity to retaliate. The said tenant, according to the plaintiffs,
made use of the differences between the owners to bargain for a deal for
the first defendant’s share in the two shop rooms which were offered to
him by sale. It was further alleged by the plaintiffs that they came to
know about the secret negotiation for alienation of the first defendant’s
share and intimated the illegality of such a transaction to the 6th defendant
and requested him by letter dated 8.11.1989 to refuse registration of any
document which was contrary to the agreement entered into between the
parties. The request was acknowledged by the 6th defendant on
10.11.1989. According to the plaintiffs by a communication dated
29.11.1989 which was posted after 13.12.1989 and received by them on
16.12.1989, their request was rejected and they were directed to initiate
legal proceedings for the relief sought for. It was further averred by the
plaintiffs that they later found that contrary to the terms and conditions of
the registered agreement, two assignment deeds were registered in the
office of the 6th defendant on 13.1.2.1989 and that the consideration in
each assignment deed was Rs.60,000/- totalling to a sum of Rs.1,20,000/-.
The plaintiffs further alleged that the first defendant acted contrary to the
terms of the agreement and that defendants 2 and 3 took assignment of the
property knowing and conscious of the terms of the agreement between
the owners and also about the illegality of the transaction. They further
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pleaded that they were prepared , individually or collectively, to take
assignment of the rights of the plaint schedule property for the value
mentioned in the documents. According to them, the documents are
vitiated by the provisions of the agreement between the parties registered
as document No.1396/1978 and hence the two sale deeds are liable to be
set aside and that defendants 1 to 3 are bound and liable to reconvey the
plaint schedule property to the plaintiffs as prayed for in the plaint.
4. The first defendant filed a written statement, defendants 2 and 3
filed a joint written statement, the 4th defendant filed only a statement
adopting the contentions taken up by the other defendants. The 5th
defendant filed a statement to the effect that he is not interested in the
subject matter of the suit and the 6th defendant filed a separate written
statement. The defendants contended inter alia that plaintiffs 1 and 2, the
husband of the third plaintiff and defendants 1, 4 and 5purchased different
portions of Anand Bazar in 1972 by separate sale deeds, that they were
enjoying the said property separately by collecting rent independently.
They further contended that in 1978 the respective owners of the property
started construction of the first floor on their respective building and that
the first plaintiff and the 5th defendant constructed an independent three
storied building in their vacant land with access to the first floor of the
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building. They also contended that the averment in the plaint that separate
portions were constructed with common fund was false and that
construction was started with individual funds and that towards the end of
the completion, a loan was availed of by the parties. According to them,
the primary purpose and intention of the agreement was for availing of a
loan and that the other terms and conditions of the agreement were void,
illegal and against public policy and were not binding on the parties to the
agreement. They also contended that the parties had no express will or
intention to make such an agreement and that the agreement was made
under pressure and coercion and hence it was not binding on the parties.
It was also contended that the agreement is in relation to newly constructed
buildings and that the existing ground floor is excluded therefrom.
According to the defendants, the allegation that the plaintiffs were entitled
to get the plaint schedule property reconveyed to them cannot be sustained
and that the assignments in favour of defendants 2 and 3 are perfectly
legal, valid and enforceable. The defendants, therefore, prayed for
dismissal of the suit.
5. The first plaintiff was examined as PW.1 and Exts.A1 to A26
were marked on their side. The defendants examined DWs.1 to 3 and
marked Exts.B1 and B2. DWs.1 and 3 are defendants 1 and 4 in the suit.
A.S. NO.363/1993 8
The court below framed six issues and after trial found that the 5th
defendant was a proper and necessary party to the suit and that there is no
total restraint against alienation of the property scheduled in Ext.A1
agreement. The court below also found that clause No.5 of Ext.A1 cannot
be said to be a restraint on alienation and not against public policy and hit
by Section 23 of the Indian Contract Act, that Ext.A1 also contains a
protection clause against alienation of the plaint schedule properties to an
outsider other than the parties to Ext.A1, that Exts.A17 and A18 sale deeds
are void and contrary to the terms contained in Ext.A1, that Exts.A17 and
A18 are liable to be set aside and that the plaintiffs are entitled to get the
plaint schedule properties reconveyed to them as prayed for. On the
basis of the above said findings , the court below decreed the suit as
prayed for.
6. The questions which arose for adjudication in the suit were
whether Exts.A17 and A18 assignment deeds are void or vitiated by the
provisions of Ext.A1 agreement and liable to be set aside and whether the
plaintiffs are entitled to get the plaint schedule properties reconveyed to
them ?
7. Plaintiffs 1 and 2 and defendants 1, 4 and 5 are brothers. The
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third plaintiff is the wife of late A.A. Alfred, another brother. In the year
1972, all the brothers by separate sale deeds purchased the shop buildings
by name Anand Bazar. It is a line of shop rooms on the east, west and
north interconnected with common urinal and four godowns on the
northern extremity on the east and west with a garden in between the shop
rooms, in the middle. Subsequently in the vacant space in the middle set
apart as garden, a three storied building was constructed by the two
owners and all the brothers started construction of first floor above the line
of shop buildings. For the purpose of construction of the first floor, a
loan was availed of in the names of the 1st plaintiff and the 5th defendant
from the Syndicate Bank and the other brothers stood as surety for the loan
transaction.
8. Though the property stands in the name of the six brothers
individually by separate deeds of purchase made in 1972, the line of shop
rooms on the first floor are constructed as a single building in the year
1978. The bathroom, urinals, staircases, passages, electric connection etc.
were common to all and common enjoyment alone is possible due to the
lie and situation of these common facilities. According to the plaintiffs, at
the time of construction of the first floor of the building, the above aspects
and facts were discussed between the brothers and they had decided to
A.S. NO.363/1993 10
determine and finalise their rights of ownership and obligation over the
building by Ext.A1 agreement entered into among the parties. The terms
of Ext.A1 inter alia provide that the owners desired that the property and
the building should be retained as common, that individual owners should
not alienate, assign, mortgage or create liability over their individual share,
that in a contingency of an owner’s financial difficulties requiring sale of
individual share, he should not sell the same to an outsider, but only to any
one of the other owners prepared to purchase the same. In case there was
any dispute about the value of the portion intended to be sold, mediation
was provided to fix the value. Alienation of any portion of the property to
an outsider was absolutely prohibited.
9. Resolution of the dispute between the parties mainly depend on
the interpretation of the terms of Ext.A1 agreement. Before analysing the
meaning of the terms in Ext.A1 agreement, it is relevant to note the
background under which Ext.A1 was executed. In the year 1972, the six
brothers together purchased the property and the existing building, namely
Anand Bazar, which is the line of shop rooms on the east, west and north
interconnected with common urinals and four godowns on the northern
extremity on the east and west with a garden in between the shop rooms, in
the middle. Subsequently, individual owners started construction of the
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first floor and a three storied building individually. The three storied
building was also constructed in such a way that it extended over to the
existing shop rooms on three sides. On the side of the shop rooms,
passages were provided for ingress and egress. The ground floor of the
three storied building was kept as car parking area. The first floor was
completed with the common funds raised by the owners providing
common facilities including urinals, stair cases, passages, verandah, water
and electric connection. The situation of the buildings, the lie of the
property and the constructions made were all intended for common use and
the raising of funds through the bank and the discharge of the liability
were all factors which lead them to think that the newly constructed
building will be enjoyed as common by the family. The property with
the line buildings was purchased in 1972. Till the starting of the
construction of the ground floor and the separate three storied building in
the space provided as garden in 1978, the parties never thought of
executing an agreement like Ext.A1. They were independently enjoying
the rights and obligations. Only when further constructions were made by
providing more common facilities for the enjoyment of the users of the
building they thought of execution of Ext.A1 agreement. Loan was
availed of as a common liability which liability had to be discharged out of
the common funds raised from the loan. Car parking facility was
A.S. NO.363/1993 12
provided in the ground floor of the three storied building which was also
intended for common use. It is averred, pleaded and testified that the
purpose behind the execution of Ext.A1 agreement was for the aforesaid
reasons.
10. In Ext.A1 agreement dated 24.2.1978, the reasons for execution
of the said agreement is narrated at pages 2 and 3. Even at the time of
starting the construction of the new buildings and during the course of
construction, the brothers had not thought of executing any such
agreement. They started and carried out the construction work
individually raising own funds. Only when they planned raising funds for
the completion of the buildings, they thought of the idea of entering into
the terms for raising common fund and its collective discharge. The
recitals in pages 2 and 3 in Ext.A1 spell out such meaning and purpose.
It is stated therein that all the brothers decided to execute the agreement in
order to protect the rights of each and every one over their properties, its
boundaries, for raising common funds by way of loan for the purpose of
construction, and for discharging the said liability without fault and also to
avoid any future dispute. In Ext.A1 agreement, the six brothers authorised
their father A.J. Antony Anjiparambil to collect the rent and to discharge
the liabilities due to the bank and for other purposes and after the death of
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the father, the plaintiffs were entrusted with the duty. Thus, the intention
is clear. The common facilities put up and the common collection of rent
till the discharge of loan amount made it impossible to enjoy the building
portion individually. If a stranger is inducted as a co-owner, the brothers
thought that such a contingency will disturb the common understanding
and common collection and remittance of loan amount through their father.
The working and management of the affairs will not be smooth and
workable with the induction of outsiders. The loan amount was taken in
the names of only two brothers. The common rent collection is confined
only to the rent accrued from the newly constructed building portion. It is
important to note that the collection of rent and individual enjoyment of
the existing building (ground floor) is not disturbed. The enjoyment of
that portion is not mentioned in the agreement. It was further provided in
page 9 of Ext.A1 that if any of the sharers decided to alienate their
property due to financial constraints, the sale shall be effected in favour of
the other brothers and that they shall not sell the property to anybody other
than the brothers. It was also agreed that any dispute regarding the price
offered shall be referred to a mediator. It was further agreed that there
was no prohibition in selling the entire property jointly by all the owners.
A.S. NO.363/1993 14
11. We have already narrated the background of the case. It is in
that background that Ext.A1 agreement was executed. The apprehension
of the parties to the agreement was that if any portion of the building was
sold to an outsider, the common object arising out of the common utility of
the building and the discharge of the common liability will be disturbed.
The court below has discussed the oral evidence tendered by DW.1in that
regard which reads as follows:
“DW.1 has admitted that at the time of purchase of the
property, there were only common latrine and bathroom for the
entire building. He has further admitted in cross examination
that there is only a common meter room for the electric
connections to all the rooms, that there is a a garden in front of
the building, that half of the portion on the southern side
belongs to the 1st plaintiff and the other half belongs to the 5th
defendant, that the water supply to all the room is from a
common meter and that what is stated in Ext.A1 is with respect
to 41.187 cents of land with the buildings therein. It is also
admitted by him that the ground floor belongs to the 1st
plaintiff and the 5th defendant, that there is only a common
stair-case for the 3 upstairs and that he is in agreement with the
provisions contained in Ext.A1. DW.1 would further admit
that the properties and the buildings are in joint possession and
common enjoyment of the brothers.”
The learned Sub Judge relied on the subsequent conduct of the parties and
the oral evidence on the defence side to construe the meaning of Ext.A1
agreement. But oral evidence of parties has no place when the intention
A.S. NO.363/1993 15
of parties is explicitly clear from the plain reading of Ext.A1.
12. We have already stated in detail the background on which
Ext.A1 agreement was executed and its meaning and context. From the
date of the original purchase in 1972 till the year of execution of Ext.A1,
the brothers never thought of executing any agreement confining the right
of alienation among them. Even at the time of starting the construction
of the new buildings and during the course of construction, the brothers
didn’t think of executing any such agreement. They started and carried out
the construction work individually raising own funds. Only when they
planned raising funds for the completion of the buildings, they thought of
the idea of entering into the terms for raising common fund and its
collective discharge. The recitals in pages 2 and 3 in Ext.A1 spell out
such meanings. Thus, the intention is clear. The common facilities put up
and the common collection of rent till the discharge of loan amount made
it impossible to enjoy the building portion individually. If a stranger is
inducted as a co-owner, the brothers thought that such a contingency will
disturb the common understanding and common collection and remittance
of loan amount through their father. The working and management of the
affairs will not be smooth and workable with the induction of outsiders.
The loan amount was taken in the names of only two brothers. The
A.S. NO.363/1993 16
common rent collection is confined to the rent accrued from the newly
constructed building portion. It is important to note that the collection of
rent and individual enjoyment of the existing building (ground floor) is
not disturbed. The enjoyment of that portion is not mentioned in the
agreement It was during the construction of the first floor and the three
storied building that the brothers thought of pooling and raising common
fund from the bank and to discharge the same by utilising the income
derived by way of rent from the said portions of the newly constructed
building. The said constructions are made in such a way that common
enjoyment alone is possible due to the various common facilities
provided. So, the purpose of providing restriction in alienation in Ext.A1
agreement was for facilitating common enjoyment of the newly
constructed portions of the building. This intention is clear from pages 2
and 3 of the agreement. The object of execution of Ext.A1 agreement is
stated in pages 2 and 3 of the agreement. It is stated therein that the
parties therein are constructing the first floor on the existing line of shop
rooms and the godowns and also a three storied building and that loan has
to be availed from the bank for completion of the building. Provision was
also made for the discharge of the liability. All this was done to avoid any
future dispute in respect of the right, title and enjoyment of the property in
view of the fact that the newly constructed portions were lying as common
A.S. NO.363/1993 17
and for the smooth enjoyment of the common facilities without any
obstruction. So, the object behind execution of Ext.A1 agreement is
discernible from the said recitals. The said recitals would show that the
object is to make provision for the common enjoyment of the newly
constructed portions of the building. In paragraph 4 at page 7 of Ext.A1
it is stated that the bank loan shall be availed of in the name of the first
plaintiff and the 5th defendant and the other brothers shall stand as
guarantors. It is also stated that all the six brothers are jointly liable for
the loan to be taken from the Syndicate Bank. It was also agreed in
paragraph 4 that they should collect the rent from the newly constructed
portions of the building and remit the same to the bank periodically. In
paragraph 5 at page 8 of Ext.A1, it is again stated that the above said
building shall remain common and shall not be alienated to strangers. The
intention of the parties is clear from the schedule of property to Ext.A1.
The schedule describes the property as the newly constructed first floor
and the three storied building. It is clear from the schedule that it
excludes the original building as it stood prior to the new constructions
made in 1978.
13. As we have already noted, interpretation of Ext.A1 agreement
by a plain reading in the context in which it was executed will clinch the
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issue. The best interpretation of a contract is made from the context.
Every contract is to be construed with reference to its object and the whole
of its terms. The whole context must be considered to ascertain the
intention of the parties. The sense and meaning of its context in any
particular part of instrument may be collected and every part of it may be
brought into action from the whole terms. The interpretation to be
adopted should be one which gives effect if possible, to all the parts and
do not reject any of them. The deed must be read as a whole in order to
ascertain the true meaning of its several clauses, and the words of each
clause should be so interpreted as to bring them into harmony with the
other provision of the deed if that interpretation does no violence to the
meaning to which they are naturally susceptible. In construing a contract
the Court must look at the words used in the contract unless they are such
that one may suspect that they do not convey the intention correctly. If
the words are clear, there is very little the Court can do about it. In the
construction of a written instrument it is legitimate in order to ascertain
the true meaning of the words used and if that be doubtful it is legitimate
to have regard to the circumstances surrounding their creation and the
subject matter to which it was designed and intended they should apply.
The settled principles of interpretation as stated supra right from Privy
Council decision reported in Purnananthachi v. Gopalaswami, A.I.R.
A.S. NO.363/1993 19
1936 Privy Council 281 was followed by the Supreme Court and
different High Courts in a catena of decisions and the recent are in Ganga
Prasad Verma (Dr.) v. State of Bihar, 1995 Supp.(1) SCC 192,
J.P.Bansal v. State of Rajasthan,(2003) 5 SCC 134, Nathi Devi v.
Radha Devi Gupta (2005) 2 SCC 271 and Promoters & Builders Assn.
of Pune v. Pune Municipal Corpn. (2007) 6 SCC 143.
14. Every transfer is not vitiated simply because there may happen
to be some clauses in the deeds which are repugnant to the free transfer
and circulation of property. The deprivation of incidents of ownership in
whatever form is void and unenforceable. Right of transfer is incidental to
and inseparable from the beneficial ownership of a property. Under
Section 10 of the Transfer of Property Act a condition absolutely
restraining a transferee from disposing of the property is void. The
section is silent as to the validity of qualified restraints on alienation.
Partial restraint on alienation is not prohibited under the said provision.
The question as to whether the clauses in a deed are absolute or partial has
to be gathered from the contents of the deed. The Privy Council in
Mohammed Raza v. MT. Abbas Bindi Bivi, A.I.R. 1932 P.C. 158 held
that `partial restrictions are neither repugnant to law nor to justice, equity
and good conscience. Lord Wenslevdale in Monypenny v Monypenny
(1861 9 HLC 114 said: “the question is not what the parties to a deed may
A.S. NO.363/1993 20
have intended to do by entering into that deed, but what is the meaning of
the words used in that deed; a most important distinction in all cases of
construction and the disregards of which often leads to erroneous
conclusions.’ Brett L.J. in Re Meredith, ex parte Chick (1879) 11 Ch D
731 observed: “I am disposed to follow the rule of construction which
was laid down by Lord Denman and Baron Parke ……. They said that in
construing instruments you must have regard not to the presumed
intention of the parties, but to the meaning of the words which they have
used.”
15. Therefore, we are of the considered view that Ext.A1
agreement does not take in the original building. The first defendant had
assigned and alienated his two shop rooms on the ground floor in favour
of defendants 2 and 3 by documents dated 13.12.1989 registered as
document Nos.3772/89 and 3773/89 of S.R.O., Ernakulam. The said shop
rooms mentioned in the assignment deed No.1854/72 stands in the name
of the first defendant. Since the ground floor of the building is not
included in Ext.A1 agreement, the plaintiffs are not entitled to seek any
reliefs sought for in the suit. We have already found that the terms of the
agreement entered into between the parties are only in respect of the first
floor and the newly constructed three storied building. In the light of the
view we have taken, the question whether there is total prohibition
A.S. NO.363/1993 21
against alienation of the property scheduled to A1 and that clause 5 of
Ext.A1 amounts to total restraint which is against public policy hit by
Section 23 of the Indian Contract Act does not arise for consideration.
It is made clear that we have interpreted Ext.A1 agreement only for the
purpose of enquiry as to whether the terms in Ext.A1 applies to ground
floor of the existing building or not.
In the result, we allow the appeal and set aside the judgment and
decree . The plaintiffs are not entitled to the reliefs. The suit is dismissed.
The deposit already made by the plaintiffs pursuant to the direction in the
impugned judgment can be withdrawn by the plaintiffs with the accrued
interest. By the interm order dated 24.9.1993, this Court directed the
appellants to deposit the cost portion of the decree. The amount deposited
was withdrawn by the plaintiffs. The plaintiffs shall repay the amount to
the appellants within a month from today. There will be no order as to
costs.
(KURIAN JOSEPH, JUDGE)
(HARUN-UL-RASHID, JUDGE)
sp/
A.S. NO.363/1993 22
C.R
KURIAN JOSEPH &
HARUN-UL-RASHID,JJ
A.S. NO.363 OF 1993
JUDGMENT
6TH FEBRUARY, 2008