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AO/118/2010 30/ 30 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
APPEAL
FROM ORDER No. 118 of 2010
With
CIVIL
APPLICATION No. 4790 of 2010
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KEVAL
DEVELOPERS PRIVATE LTD
Versus
ASHOK
GOVINDRAM HURRA & OTHERS
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Appearance :
Mr.
P.C. Kavina, Senior Advocate, with Mr. Digant M. Popat for the
appellant.
Dr.
Sonia Hurra with Mr. Prasad A. Hurra for respondent No.1
Mr.
N.D. Nanavati, Senior Advocate with Mr. Vimal M. Patel for respondent
Nos. 2 to 5
Respondent
Nos. 6 and 7 party in person.
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CORAM
:
HONOURABLE
MR.JUSTICE ANANT S. DAVE
Date
: 02/08/2010
ORAL
ORDER
1 This
Appeal from Order under Order 43 Rule 1(r) of the Code of Civil
Procedure is filed by the appellant [original defendant No.5] against
the judgment and order dated 27.4.2010 passed by the learned Judge,
Court No.9, City Civil Court, Ahmedabad, below Exh.139 [Notice of
Motion] in Civil Suit No.545 of 2007, by which, the Notice of Motion
filed by the plaintiff came to be allowed and the interim relief in
terms of paragraph 6(B) of the Notice of Motion was granted against
defendant No.5 till final disposal of the suit.
1.1 Along
with the appeal from order, Civil Application No.4790 of 2010 is
filed by the applicant-appellant to stay the above order dated
27.4.2010 passed by the trial court.
2. On
3.5.2010, when the matter was listed for admission hearing before the
Court [Coram: Ravi R. Tripathi, J.], by order dated 3.5.2010, the
appeal was admitted and in the civil application for stay, notice as
to interim relief was issued returnable on 21.6.2010. On 21.6.2010,
since the notice was not served upon respondent Nos. 2 to 7, the
Registry was directed to issue fresh notice to the unserved
respondents returnable on 29.6.2010. On the returnable date, the
Registry placed the matter before this Court on 29.6.2010. In the
note dated 29.6.2010 submitted by the Registry, the matter was placed
for the order of the Court since process fees were not paid and the
time was to be extended. This Court passed an order to the effect
that the process fee be paid on or before 2.7.2010 and returnable
date be extended accordingly. Since the matter was not listed, a note
was submitted and, accordingly, this Court directed the Registry to
notify the matter on 15.7.2010. On 15.7.2010, this Court passed the
following order:
Heard
learned counsels for the parties.
In
view of the office note dated 14.07.2010 filed by the Registrar
(Judicial) and the endorsement made by the Hon’ble the Chief Justice
to notify the matter, this matter is placed before this Court, today.
Mr.
Prasad Hurra, learned advocate appearing for the respondent No.1,
submits that he has made a representation to the Hon’ble the Chief
Justice expressing no confidence in this Court to conduct this case.
He further submits that even today also he has made a representation
to the Registrar (Judicial).
In
view of the above, the Office is directed to place this matter before
the Hon’ble Chief Justice for obtaining appropriate order.
The
Registry referred the matter to the Hon’ble Chief Justice as per the
note dated 19.7.2010 and, thereafter, as per the order dated
23.7.2010 passed by the Hon’ble Chief Justice – ‘before the same
Hon’ble Judge i.e, Mr. Justice A.S. Dave on 23.7.2010’, the matter
was placed before this Court. On 27.7.2010, the appeal as well as
civil application for stay was taken up for hearing. The learned
advocates for both the parties argued the case for about three and
half hours and the matter was adjourned to 29.7.2010 at 14.30 hours
and, again, the learned advocates for the parties argued the case for
about one and half hours. Thus, the matter is heard extensively by
this Court and today the matter is listed for orders.
3. The
broad facts, as narrated by the plaintiff, have a root in an
agreement dated 12.12.2003, which was entered into between the
plaintiff as karta of HUF and his son Prasad Hurra and one Shri
Pragnesh, laying down terms and conditions and development of their
ancestral bungalow at Ashram Road named ‘Sant Kutir’. It is the say
of the plaintiff that it was decided to develop the building named
‘Florence’ and the name of the partnership firm was M/s. Florence
Construction. That, the said bungalow owned by the plaintiff HUF and
his minor son was valued at Rs.2.31 crores which was later on
increased to Rs.2.51 crores with increase of FSI due to amalgamation
of the entire plot into one including two rear bungalows. That, the
said amount was taken as investment by the plaintiff in the
partnership firm and likewise Pragnesh was to pay Rs.50 lakhs as
deposit on or before 12.12.2003 and was to bear the entire cost of
construction of Florence. On 22.4.2004, a partnership deed was
executed adopting all the terms and conditions of the agreement dated
12.12.2003 and, as per clause 10 of the said agreement, the term of
partnership would be extended to the new venture by mutual consent
of both the partners and, as per clause 22, the funds of the
partnership would not be given on loan and if it was so then there
should be a written agreement thereto. It is the say of the plaintiff
that the said partnership firm was initially formed for the purpose
of Florence project but later on it was extended to the new project
of Natraj cinema land by consent of both the parties. On 15.9.2004, a
development agreement was executed between the parties. That, as per
the plaintiff, in the year 2005-2006, the plaintiff suffered a
serious disease and due to malignancy of cancer of tongue, he was to
be hospitalized and the said situation was exploited by the defendant
who committed certain irregularities including criminal
misappropriation and embezzlement of partnership funds, for which a
criminal complaint, being FIR C.R. No.139 of 2007, came to be filed.
However, in the meanwhile, certain transactions took place with
regard to letting out a premises owned by the plaintiff to some
companies and in or around October 2006 the plaintiff came to know
about certain illegal activities of the defendant and thereafter that
complaint was filed. It is further submitted that, when the plaintiff
came to know about the defendant’s efforts to sell the partnership
property of Natraj cinema to one Fame Group for Multiplex, the
plaintiff filed Civil Suit No.545 of 2007 in the City Civil Court,
Ahmedabad, on 14.3.2007. Initially, a writ petition being Special
Civil Application No.6874 of 2007 was filed in this Court wherein
this Court granted an interim relief restraining the respondent Nos.
2 to 5 of the said writ petition from selling, mortgaging, leasing or
developing the property of Natraj cinema, but, it is stated that the
learned advocate appearing for the respondents made a false statement
before the learned Single Judge that a caveat was filed on behalf of
the respondents and, therefore, the order was not signed and,
thereafter, after hearing the learned advocates for both the parties,
an undertaking was filed by the respondents to the effect that they
will not alienate the partnership property in question and,
therefore, the interim relief granted earlier was ordered to continue
till 30.3.2007. According to the plaintiff, finally, Special Civil
Application No.6874 of 2007 was disposed of with a direction to the
trial court to decide the Notice of Motion application within 15
days. On 26.4.2007, a notice of lis pendens under Section 52 of the
Transfer of Property Act, 1882, was registered and on 22.7.2007 a
caution notice was published in Gujarat Samachar, a widely circulated
vernacular newspaper, and a similar notice was published in the Times
of India on 24.7.2007. In the meanwhile, the plaintiff filed
application dated 29.10.2007 and, as per the order dated 24.10.2007,
submitted amended plaint and amended application for interim
injunction and other reliefs in Civil Suit No.545 of 2007 and the
same was pending for hearing. It is the say of the plaintiff that on
26.3.2008, the impugned sale deed came to be executed since the
notice of motion Exh.6/7 for interim relief was rejected by the trial
court by order dated 24.10.2007.
3.1 Being
aggrieved by the above order dated 24.10.2007 of the trial court, the
plaintiff filed Appeal From Order No.3 of 2008 with Civil
Application No.15 of 2008, wherein, after hearing the learned
advocates for the parties, this Court [Coram: D.N. Patel, as His
Lordship then was] by order dated 27.3.2008 dismissed the appeal and
the civil application. However, considering the nature of controversy
between the parties, the trial court was directed to hear and decide
Civil Suit No.545 of 2007 as expeditiously as possible and preferably
on or before 31.1.2009 without being influenced by the observations
made in the above order as well as the order passed by the court
below in Notice of Motion Exh.6/7.
3.2 Being
aggrieved by the order dated 27.3.2008 passed by this Court, the
plaintiff filed Special Leave to Appeal [Civil] Nos.9411-9412 of
2008 before the Apex Court, wherein, the following order was passed
by the Apex Court on 5.5.2008.
Since
the impugned order is an interim Order, the Special Leave Petitions
are dismissed. We make it clear that observations by the High Court
in the impugned order are tentative and shall have no bearings on the
merits of the case at final hearing.
3.3 The
plaintiff filed an amendment application challenging two sale deeds
dated 11.5.2006. On 14.7.2009, the plaintiff filed Civil Suit No.1448
of 2009 against Kewal Developers as defendant No.1 of the said suit.
Once again, lis pendens was registered in Civil Suit No.1448 of 2009.
A written statement was filed and, thereafter, the amended plaint was
filed on 20.8.2009. The application Exh.24 for stay of the suit in
Civil Suit No.1448 of 2009 was allowed by order dated 15.9.2009,
wherein, the trial court observed that on the same subject matter of
the property, the issues are identically same and, therefore, the
subsequent suit cannot be proceeded with, but, if the plaintiff is
aggrieved against Keval Developers Private Limited, then the
plaintiff may also bring out an application for amendment in proper
manner in order to enable him to ask new prayer against the newly
added party in Civil Suit No.1448 of 2009.
3.4 In
the meanwhile, when the plaintiff came to know about the plan for
construction of a six-storyed building namely ‘Welcome’ on the Natraj
cinema property, the plaintiff made inquiries and, accordingly, the
letters addressed by Keval Developers Private Limited and other
applications for permission to construct building according to the
plan, came to the notice of the plaintiff. Even, the Ahmedabad
Municipal Corporation also wrote a letter to the plaintiff on
31.12.2009 asking for objections of the plaintiff to the construction
plan given by Keval Developers Private Limited and, accordingly,
objections were raised by the plaintiff. However, it seems from the
record that the competent authority of the Ahmedabad Municipal
Corporation granted permission subject to certain conditions by
order dated 26.4.2010.
3.5 It
is to be noted that in Civil
Suit No.1448 of 2009, after
considering prima-facie case, etc. of the plaintiff, by order dated
3.3.2010, the trial court granted interim injunction restraining
third party-defendant from creating any further rights and
prohibiting them from
alienating the property in question in any manner. Some of the
defendants, being aggrieved
by the aforesaid order dated 3.3.2010, filed Appeal From Order No.70
of 2010, which came to be disposed of by this Court by order dated
10.3.2010 on the basis of submissions made by the learned advocates
appearing for the parties. While disposing of the aforesaid Appeal
From Order, the undertaking dated 4.3.2010 filed by the defendants in
Regular Civil Suit No.1448 of 2009 to the extent that they shall not
transfer the property in question in any manner, was ordered to be
continued till proper amendment application is moved for a period of
two weeks. It is further say of the plaintiff that on 13.4.2010, the
amendment application was filed in Civil Suit No.545 of 2007 and
placed on record the amended plaint after serving a copy of the same
to the defendants.
3.6 So
far as the criminal proceedings are concerned, the stay granted by
the High Court qua investigation of criminal case, came to be vacated
by the Apex Court by order dated 26.4.2010.
3.7 It
is further case of the plaintiff that the plaintiff had no knowledge
about the second sale deed dated 10.4.2008 of the property in
question executed in favour of defendant No.5.
3.8 In
the context of above facts, the application Exh.139 in Civil Suit
No.545 of 2007 was heard and decided by the trial court, by which,
the Notice of Motion filed by the plaintiff came to be allowed and
the interim relief in terms of paragraph 6(B) was granted against
only defendant No.5 till final disposal of the suit, which is under
challenge.
4 Mr.
P.C. Kavina, learned Senior Counsel for the appellant, has assailed
the order passed by the trial court mainly on the ground that the
second Notice of Motion for injunction filed after the amendment was
granted is wrongly entertained and allowed by the trial court.
According to the learned counsel for the appellant, the reliance
placed on the provisions of Section 52 of the Transfer of Property
Act, 1882, is based on the ignorance and misconceived notion that, if
lis pendens is there, the party has to obtain permission from the
Court concerned under section 52 of the Act before dealing with the
property. According to the learned counsel for the appellant, the
correct interpretation of Section 52 of the Act is that, once lis
pendens is registered, the subsequent transferee would be bound by
the decision, namely, the final order or decree that may be passed by
the concerned Court and nothing more than that. At the most, a plea
cannot be taken by the subsequent transferee that he is not bound by
the final decision or decree of the trial court in spite of lis
pendens. According to the learned counsel for the appellant, in the
facts and circumstances of the case, when the first notice of lis
pendens was registered on 26.4.2007, the trial court rejected the
interim application on 24.10.2007, which came to be confirmed by this
Honourable Court in Appeal From Order No. 3 of 2008 on 27.3.2008 and
even the Special Leave to Appeal (Civil) Nos.9411-9412 of 2008 also
came to be rejected by the Apex Court by order dated 5.5.2008 with
certain observations. In view of the above, applying the doctrine of
very Section 52 of the Act to the subsequently amended plaint and
Notice of Motion, the trial court ought not to have exercised its
jurisdiction by restraining the defendant from dealing with the
property in question. It is further stated that the reliance was
placed on the report of the Chartered Accountant appointed and
engaged by the plaintiff who had an access to the material supplied
and made available by the plaintiff and disputed by the defendants,
and the said report of the Chartered Accountant based on such
material could not have formed basis for grant of relief in favour of
the plaintiff, which upsets the norms of balance of convenience,
undue hardship including the prima-facie case. The learned counsel
for the appellant has drawn the attention of this Court to the
finding of the Chartered Accountant and submitted that his report was
based solely on the verification of the statement of accounts which
was made available to him and no account books or other material was
verified. The learned counsel for the appellant has also submitted
that the property in question, as mentioned in paragraph 3 of the
plaint, is in two parts and one part was purchased by respondent No.2
and the other part was purchased by respondent No.3 and both the
parts were sold, conveyed and transferred to the present appellant by
defendant No.1 by two different sale deeds and the same were
registered with the Sub-Registrar, Ahmedabad, and necessary entries
were also posted in the revenue records. It is further submitted
that permission for construction as per the plan submitted is granted
by the competent authority of the Ahmedabad Municipal Corporation
subject to the conditions laid down thereunder and the appellant is
bound by the final outcome of the suit proceedings and any dealing,
during pendency of the suit proceeding, is the subject matter or the
decision that may be taken finally by the court concerned. In support
of his argument, the learned counsel for the appellant has placed
reliance on the decision of the Apex Court in the case of Sanjay
Verma vs. Manik Roy and others, reported in (2006) 13 SCC 608, and it
is submitted that in paragraph 12 of the above decision, the Apex
Court clearly lays down that the parties are free to deal with the
property, which is subject matter of the suit, and bound by the
decree that may be passed, but, when the permission is sought for,
lis pendens will not apply.
4.1 The
learned counsel for the appellant has further submitted that, since
the sale consideration has been paid, the transactions are valid and
legal, and the permission to construction is granted by the competent
authority of the Ahmedabad Municipal Corporation, the restriction put
forth by the trial court not to transfer or alienate the property in
question in any manner will cause undue hardship and irreparable loss
to the appellant and, therefore, the impugned order of the trial
court deserves to be quashed and set aside.
5 Mr.
N.D. Nanavati, learned Senior Counsel appearing for original
defendant Nos. 2 and 3, has submitted that the nature of the suit and
the claim made in Civil Suit No.545 of 2007 and Civil Suit No.1148 of
2009, are about recovery of money with regard to the accounts of the
partnership firm and, in the said suits, even if the plaintiff
succeeds and a decree is passed in their favour, the amount as
claimed can be ordered to be recovered. The learned Senior Counsel
also relied upon the very decision of the Apex Court in the case of
Sanjay Verma [supra] and submitted that the third party, newly added
defendant, is not privy to the contract and there is no lis between
the parties and no restrictive or prohibitive order could have been
passed. The defendants are independent legal entity and just some of
the partners are relatives, presumption cannot be drawn about
fraudulent transaction. Besides, the issue involved in the proceeding
can be decided and adjudicated without restraining the third party
from alienating the property in question and, when the permission is
granted to construct a building by the Ahmedabad Municipal
Corporation, the same may be permitted to be done.
6 Per
contra, on behalf of the plaintiff, respondent No.1 herein, two
learned counsels were heard and permitted to argue on the same issue
in view of the inability on the part of the learned junior counsel to
understand and submit on the basis of certain recital in the sale
deeds in vernacular Gujarati. At the outset, it is submitted on
behalf of the plaintiff that the trial court, in its well considered
and reasoned order, restrained the defendants from alienating or
dealing with the property in any manner as prayed for in paragraph
6(B) of the application for injunction and, thereby, no illegality is
committed by the trial court while passing the order impugned and,
therefore, this Court, in exercise of its appellate power, would not
interfere and, even if another view is possible with regard to
appreciation of finding of facts by the trial court, this Court would
be loathe in substituting its own opinion with that of the trial
court. The learned counsel for the plaintiff has further submitted
that, in view of the specific and clear permission granted by this
Court in Appeal From Order No.3 of 2010, coupled with the
observations made by the trial court while passing an order below
application Exh.24 of staying the second suit, the amendment
application was moved in view of the changed and new circumstances
which came to the notice of the plaintiff. It is further submitted
that the second sale deed dated 10.4.2008 executed in favour of the
appellant came to the notice of the plaintiff only after 10.3.2010,
i.e. after the order passed by this Court in Appeal From Order No.70
of 2008. It is further submitted that two sale deeds dated 27.3.2008
and 10.4.2008 were executed surreptitiously so that no action can be
taken by the plaintiff. The learned counsel has also referred to the
letters addressed by the Ahmedabad Municipal Corporation, which
formed the basis for the amendment and a Chartered Accountant
appointed by the plaintiff for verification of the account books
submitted a report specifically pointing out non-transfer of Rs.50
lakhs in favour of the plaintiff. It is further submitted that, in
spite of lis pendens notice, the defendants continued to create third
party right on the suit property making it impossible for the
plaintiff to get any relief and, virtually, amounting to multiplicity
of proceedings and defeating the right of the plaintiff. The trial
court, after having noticed the above facts and considering the
principles of public policy, equity, good conscience, irreparable
loss and the balance of convenience in favour of the plaintiff,
passed the order impugned, which cannot be said to be in any manner
illegal, which deserves interference by this Court. The learned
counsel for the plaintiff [respondent No.1 herein] has also taken
this Court to various documents produced and annexed along with this
Appeal From Order and recorded in the foregoing paragraphs including
the partnership agreement, development agreement, public notices
issued in the newspapers and the criminal case filed and submitted
that, the defendants created firms and companies to siphon off the
fund of the plaintiff to deprive him of his legitimate dues. That,
the alleged purchase of the property is not bona fide and the
transactions have taken place between the defendants inter-se was to
defeat and delay the lawful claim of the plaintiff.
6.1 The
learned counsel for the plaintiff [respondent No.1 herein] has
submitted that the Apex Court in the following decisions has
considered the scope of exercise of powers by the High Court under
Article 227 of the Constitution of India and submitted that the High
Court cannot re-appreciate the finding of facts arrived at by the
subordinate courts:
[i] (1975)
1 SCC 858 : Bathutmal Raichand Oswal vs. Laxmibai R. Tarta
[ii] (1991)
3 SCC 141 : Mani Nariman Daruwala vs. Phiroz N. Bhatena
[iii] (2002)
8 SCC 400 : Essen Deinki vs. Rajiv Kumar, which is again referred to
in the subsequent decision of the Apex Court in (2003) 6 SCC 641 in
the case of State through Special Cell, New Delhi vs. Navjot Sandhu.
6.2 The
learned counsel for the plaintiff [respondent No.1 herein] has also
referred to various decisions of the Apex Court in the context of
Section 52 of the Transfer of Property Act, 1883 and reliance is
placed on the decision of the Apex Court in the case of Sarvinder
Singh vs. Dalip Singh, reported in (1996) 5 SCC 539 in support of her
submission that the defendants in the suit were prohibited by
operation of Section 52 to deal with the property and could not
transfer or otherwise deal with it in any manner affecting the right
of the plaintiff except with the order and authority of the Court.
The learned counsel has placed reliance on the decision of the Apex
Court in the case of Guruswamy Nadar vs. P. Lakshmi Ammal, reported
in (2008) 5 SCC 796 and submitted that the principle of lis pendens
is based on public policy so as to discourage that, for the same
subject matter of the property, if subjected to sale to a third
person, such transaction has to be checked otherwise the litigation
will not come to an end. The above principle was earlier propounded
by the Apex Court in (2004) 1 SCC 191, Bibi Zubaida Khatoon vs. Nabi
Hassan Sabeb. For grant of an interim injunction under Order 39
Rules 1 and 2, relying on the decision of the Apex Court in the case
of Gujarat Bottling Co. Ltd vs. Coca Cola Co. and others, reported in
(1995) 5 SCC 545, it is submitted that grant of interlocutory
injunction is based on the exercise of sound judicial discretion
based on prima-facie case, balance of convenience, irreparable loss,
which cannot be compensated in terms of money, undue hardship, etc.
etc. and the party seeking the court s interference with an order
of injunction must be fair. It is further submitted that, when the
conduct of the appellant is not bona-fide, and the relief granted by
the trial court in favour the plaintiff being wholly equitable in
nature, the appellate court may refuse to interfere.
7. In
rejoinder, Mr. P.C. Kavina, learned Senior Counsel for the appellant,
has reiterated his submissions with regard to applicability of
Section 52 of the Transfer of Property Act and submitted that the
appellant-defendant is a bona fide purchaser for value of money and
is ready and agreeable that any further alienation of the suit
property will be subject to the final outcome of the suit, which is
opposed by the learned counsel for the plaintiff on the ground that
the same will result into multiplicity of proceedings and unending
litigation. Mr. P.C. Kavina, learned Senior Counsel for the
appellant, has vehemently denied the submissions made by the learned
counsel for the plaintiff that the two suits do have bearing on the
criminal case and other submissions regarding irregularity or
illegality.
7.1 Learned
counsels for the original defendants have vehemently denied the
allegations levelled by the learned counsel for the plaintiff and
termed the same as baseless and devoid of merit.
8. Heard
the learned counsels for the parties and perused the record.
9. From
the record, it appears that the first suit was filed on 14.3.2007
basically for recovery of Rs.4,37,18,447/- with the following prayers
in paragraph 27 [page 453 of the compilation]:
[A] This
Hon’ble Court may kindly be pleased to declare that the suit property
commonly known as Natraj Land at Changispur alias Mithakali, in the
Registration District and Sub-District of Ahmedabad-3 (Memnagar-
bearing Final Plot No.485-paiki of Ellisbridge Town Planning Scheme
No.3 admeasuring 5082 sq.yards or thereabout an asset and property of
the firm of M/s. Florence Construction;
[A-1] This
Hon’ble Court may kindly be pleased to declare null and void thus set
aside the two sale deed executed on dated 11.5.2006,one in favour of
Pure Infrastructure, defendant No.2 herein, and second in favour of
M/s. Parikh Real Estate & Leasing [Pvt] Ltd in relation to suit
property commonly known as Natraj Land situated at Changispur alias
Mithakali, in the Registration District and Sub-District of
Ahmedabad-3 (Memnagar- bearing Final Plot No.485-paiki of Ellisbridge
Town Planning Scheme No.3 admeasuring 5082 sq.yards or thereabout
which is executed by sellers of Natraj Cinema named in the two sale
deeds annexed with the plaint;
[B] This
Hon’ble Court may kindly be pleased to declare that the defendants
Nos. 2 and 3 have no right, title or interest in the property being
Natraj Land situated at Changispur alias Mithakali, in the
Registration District and Sub-District of Ahmedabad-3 (Memnagar-
bearing Final Plot No.485-paiki of Ellisbridge Town Planning Scheme
No.3 admeasuring 5082 sq.yards and the defendants Nos. 2 and 3 be
directed by mandatory injunction to convey the said property to the
firm of M/s. Florence Construction and/or in the joint names of the
plaintiff and defendant No.1′
[C]
This Hon’ble Court may kindly be pleased to dissolve the partnership
firm of M/s. Florence Constructing with effect from the date of suit.
[D]
This Hon’ble Court may kindly be pleased to direct the defendant No.1
to give complete accounts of the profits and assets, including the
property known as Natraj Cinema property, of the firm of M/s.
Florence Construction and to direct the defendant No.1 to pay to the
plaintiff his share in the profits and assets of the firm on taking
such accounts together with interest @ 18% per annum till date of
payment;
[E]
This Hon’ble Court may kindly be pleased to pass a decree for the sum
of Rs.4,37,18,447/- with interest at the rate of 18% per annum
against the defendant No.1 as partner of the firm and direct him to
pay the said sum to the firm of M/s. Florence Construction;
[F]
This Hon’ble Court may kindly be pleased to grant any other and
further relief as may be deemed just and fair in the circumstances of
the case.
9.1 The
amended plaint, as per the order dated 13.4.2010 below application
Exh.137, refers to the suit for recovery of Rs.12,83,69,745, with the
following prayers [page 505 of the compilation]:
[A] This
Hon’ble Court may kindly be pleased to declare that the suit property
commonly known as Natraj Land at Changispur alias Mithakali, in the
Registration District and Sub-District of Ahmedabad-3 (Memnagar-
bearing Final Plot No.485-paiki of Ellisbridge Town Planning Scheme
No.3 admeasuring 5082 sq.yards or thereabout an asset and property of
the firm of M/s. Florence Construction;
[A-1] This
Hon’ble Court may kindly be pleased to declare null and void thus set
aside the two sale deed executed on dated 11.5.2006,one in favour of
Pure Infrastructure, defendant No.2 herein, and second in favour of
M/s. Parikh Real Estate & Leasing [Pvt] Ltd in relation to suit
property commonly known as Natraj Land situated at Changispur alias
Mithakali, in the Registration District and Sub-District of
Ahmedabad-3 (Memnagar- bearing Final Plot No.485-paiki of Ellisbridge
Town Planning Scheme No.3 admeasuring 5082 sq.yards or thereabout
which is executed by sellers of Natraj Cinema named in the two sale
deeds annexed with the plaint;
[B] This
Hon’ble Court may kindly be pleased to declare that the defendants
Nos. 2 and 3 have no right, title or interest in the property being
Natraj Land situated at Changispur alias Mithakali, in the
Registration District and Sub-District of Ahmedabad-3 (Memnagar-
bearing Final Plot No.485-paiki of Ellisbridge Town Planning Scheme
No.3 admeasuring 5082 sq.yards and the defendants Nos. 2 and 3 be
directed by mandatory injunction to convey the said property to the
firm of M/s. Florence Construction and/or in the joint names of the
plaintiff and defendant No.1.
[C-1]
This Hon’ble Court may kindly be pleased to declare that defendant
No.5 has not acquired any legal right, title or interest in the said
half of property pursuant to sale deed dated 27.3.2008 and subsequent
sale deed of second half of the property vide registered sale deed
dated 10.4.2008 commonly known as Natraj Land situated at
Changispur alias Mithakali, in the Registration District and
Sub-District of Ahmedabad-3 (Memnagar- bearing Final Plot
No.485-paiki of Ellisbridge Town Planning Scheme No.3 admeasuring
5082 sq.yards and thus defendant No.5 be kindly directed to convey
the said half property each admeasuring 2541 sq.yards to the firm
named M/s. Florence Construction.
[C-2]
This Hon’ble Court may kindly be pleased to quash and set aside
declaring null and void the sale deeds dated 276.3.2008 registered on
dated 27.3.2008 and subsequent sale deed of second half of the
property vide registered sale deed dated 10.4.2008 bearing Sr.
No.6116, both in favour of M/s. Keval Developer Private Limited,
defendant No.5 in relation to the property commonly known as Natraj
Land situated at Changispur alias Mithakali, in the Registration
District and Sub-District of Ahmedabad-3 (Memnagar- bearing Final
Plot No.485-paiki of Ellisbridge Town Planning Scheme No.3
admeasuring 5082 sq.yards, they are not binding on the plaintiff.
[C-3]
This Hon’ble Court may kindly be pleased to restrain the defendants
more particularly defendant No.5 by granting appropriate prohibitory
injunction restraining him from alienating, transferring, mortgaging,
selling, developing, or otherwise dealing with suit property in any
manner whatsoever, i.e. property commonly known as Natraj Land
situated at Changispur alias Mithakali, in the Registration District
and Sub-District of Ahmedabad-3 (Memnagar- bearing Final Plot
No.485-paiki of Ellisbridge Town Planning Scheme No.3 admeasuring
5082 sq.yards, or thereabout which is bounded as under:
North
by: Final Plot no.484 [building of Chamber of Commerce]
South
by: T.P. Land
East
by :Final Plot no.485 part Ashram Road
West
by: Final Plot no.481, 482, 483.
[C]
This Hon’ble Court may kindly be pleased to dissolve the partnership
firm of M/s. Florence Constructing with effect from the date of suit.
[D]
This Hon’ble Court may kindly be pleased to direct the defendant No.1
to give complete accounts of the profits and assets, including the
property known as Natraj Cinema property, of the firm of M/s.
Florence Construction and to direct the defendant No.1 to pay to the
plaintiff his share in the profits and assets of the firm on taking
such accounts together with interest @ 18% per annum till date of
payment;
[E]
This Hon’ble Court may kindly be pleased to pass a decree for the sum
of Rs.821.71 lacs with interest at the rate of 18% per annum
calculated from May 10, 2005 till the date of realization against the
defendant No.1 to 8 payable to Florence Construction Partnership Firm
as damages for fraud conspired by them recoverable out of sale
proceeds of the suit property of partnership firm known as Natraj
cinema land, and kindly be pleased to declare that all defendants are
jointly and severally liable to satisfy said claim as stated herein.
[E-1]
This Hon’ble Court may kindly be pleased to declare that both the
parters i.e. plaintiff and defendant No.1 are entitled to receive
their share in profits of the firm in proportion to their
contribution given towards partnership firm Florence Construction
as may be established before this Hon’ble Court, recoverable out of
sale proceeds of Partnership Property Natraj cinema and other
properties owned by defendants.
[F]
This Hon’ble Court may kindly be pleased to grant any other and
further relief as may be deemed just and fair in the circumstances of
the case.
9.2 So
far as Civil Suit No.1448 of 2009 is concerned, the same is stayed by
the trial court and there is no challenge thereafter. Therefore,
there is no necessity to refer to the said suit.
10. There
is no dispute about applicability of doctrine of Section 52 of the
Transfer of Property Act to the proceeding in question. Section 52
reads as under:
Transfer
of property pending suit relating thereto:-
During
the pendency in any Court having authority within the limits of India
excluding the State of Jammu and Kashmir or established beyond such
limits by the Central Government of any suit or proceedings which is
not collusive and in which any right to immoveable property is
directly and specifically in question, the property cannot be
transferred or otherwise dealt with by any party to the suit or
proceeding so as to affect the rights of any other party thereto
under any decree or order which may be made therein, except under
the authority of the Court and on such terms as it may impose.
10.1 The
above provision is interpreted by the Apex Court in the case of
Sanjay Verma [supra] wherein the issue of transfer pendente lite
without leave of the Court fell into consideration of the Apex Court
in the context of rejection of an application of the third party to
seek impleadment in the pending suit. In the above decision, the Apex
Court has considered various case-laws including Bibi Zubaida Khatoon
vs. Nabi Hassan Sabhe, (2004) 1 SCC 191, Sarvinder Singh v. Dalip
Singh, (1996) 5 SCC 539, Dhurandhar Prasad Singh vs. Jai Prakash
University, (2001) 6 SCC 534 and, in paragraph 12, held as under:
The
principles specified in Section 52 of the TP Act are in accordance
with equity, good conscience or justice because they rest upon an
equitable and just foundation that it will be impossible to bring an
action or suit to a successful termination if alienations are
permitted to prevail. A transferee pendente lite is bound by the
decree just as much as he was a party to the suit. The principle of
lis pendens embodied in Section 52 of the TP Act being a principle
of public policy, no question of good faith or bona fide arises. The
principle underlying Section 52 is that a litigating party is
exempted from taking notice of a title acquired during the pendency
of the litigation. The mere pendency of a suit does not prevent one
of the parties from dealing with the property constituting the
subject-matter of the suit. The section only postulates a condition
that the alienation will in no manner affect the rights of the other
party under any decree which may be passed in the suit unless the
property was alienated with the permission of the court.
The
Apex Court has extensively referred to the principles underlying
Section 52 and held that a transferee pendente lite is bound by the
decree just as much as he was a party to the suit and the principle
of lis pendens embodied in Section 52 of the TP Act being a
principle of public policy, good faith or bona fide of the purchaser
or transferee is subservient to the principle of public policy. It is
further held that one of principles underlying Section 52 is that a
litigating party is exempted from taking notice of a title acquired
during the pendency of the litigation and the mere pendency of a suit
does not prevent one of the parties from dealing with the property
constituting the subject-matter of the suit. However, in the case of
a property being alienated with the permission of the Court, the same
shall be subservient to the decree that may be passed.
11 This
Court is in respectful agreement with the proposition of law laid
down by the Apex Court on the doctrines of lis pendens embodied in
Section 52 of the Transfer of Property Act in various decisions and,
considering the facts and circumstances of the case, the decisions
quoted in the foregoing paragraphs are suffice to mention.
11.1 The
decisions relied upon by the learned counsel for the plaintiff
[respondent No.1] with regard to exercise of powers under Article 227
of the Constitution of India will strictly be not applicable to the
facts of the present appeal.
12 Keeping
in mind the above principles underlying Section 52 of the Transfer of
Property Act, admittedly, the property in question, namely, Natraj
cinema, came to be transferred as per the sale deeds dated 27.3.2008
and 10.4.2008. It is also true that two earlier sale deeds dated
11.5.2006, the origin of the above two sale deeds dated 27.3.2008 and
10.4.2008, were under challenge in Civil Suit No.545 of 2007, which
was instituted on 14.3.2007, whereas, the notice of lis pendens under
section 52 was issued on 26.4.2007. No doubt, this Court in the order
passed in Appeal From Order No. 3 of 2008 and the Apex Court in
Special Leave to Appeal (Civil) No.9411-9412 of 2008 preferred
against the above order, had noticed the above facts. So far as
Appeal From Order No. 3 of 2008 is concerned, in the order dated
27.3.2008, this Court [Coram: D.N. Patel, J. as His Lordship then
was] had given tentative findings/observations for not believing the
prima-facie case of the plaintiff. The above findings for deciding
the issue involved in the present Appeal From Order may have some
bearing but in view of the subsequent development, which took place
in Appeal From Order No. 70 of 2010 and the permission granted by
this Court to amend the plaint and to move an interim injunction
application and the same is to be considered accordingly. The finding
of the learned trial judge is based basically on three issues,
namely;
[i] plea
of lis pendens on the basis of Section 52 of the Transfer of Property
Act and consequent thereto;
[ii] the
knowledge of the plaintiff about execution of the second sale deed,
entries in the revenue record, etc. and the correspondence between
the plaintiff and the Ahmedabad Municipal Corporation;
[iii] the
report of the Chartered Accountant and prima-facie finding in the
said report based on the record submitted by the plaintiff.
12.1 Since
the suit is pending before the trial court and the written statement
is filed by the defendants, any detailed analysis or discussion of
the material on record may have bearing on further proceedings of the
suit. Hence, such exercise is not undertaken in this appeal and it is
restricted to examining legality and validity of the order impugned
only.
13. In
view of the prayers quoted hereinabove in Civil Suit No.545 of 2007
and the amended plaint, it was a suit for recovery of money as well
as for declaration and injunction. No doubt, if the plaintiff
succeeds in his case before the trial court, a decree can be passed
in his favour and the plaintiff can be compensated in terms of money
as claimed. The defendant-appellant herein had knowledge about
pendency of the proceeding and the litigation between the parties.
It is further not in dispute that the competent authority of the
Ahmedabad Municipal Corporation granted permission to construct
building on the suit property subject to certain conditions laid down
in the letter of authority [raja-chitti] dated 26.4.2010. Therefore,
according to this Court, pending the suit, any further alienation of
the suit property may result into multiplicity of proceedings and the
fact still remains that in Appeal From Order No. 3 of 2008, the
learned Single Judge had given a specific direction to the trial
court to finally hear and dispose of the suit as expeditiously as
possible preferably on or before 31.1.2009. However, in view of the
subsequent development and the order passed in Appeal From Order No.
70 of 2010, the plaint was amended and the injunction as prayed for
below application Exh.137 is granted in favour of the plaintiff.
14. Considering
the above, if the present case is viewed in light of the prima-facie
case, balance of convenience, irreparable loss and undue hardship,
including equity and good conscience, the interest of justice will be
served by directing the trial court to finally hear and decide the
suit as expeditiously as possible preferably on or before 31.12.2010.
However, pending hearing and final disposal of the suit, it will be
open for the appellant-defendant to continue the construction on the
suit land as per the permission granted by the competent authority
of the Ahmedabad Municipal Corporation by the order dated 26.4.2010,
but the appellant-defendant is restrained from alienating or
transferring the suit property in any manner in favour of a third
party.
15. In
the result, the Appeal From Order is partly allowed. The impugned
order of the trial court stands modified to the aforesaid extent.
Civil Application stands disposed of. There shall be no order as to
costs. It is made clear that the observations and findings made in
this order are of tentative in nature and shall have no bearing on
the further proceedings of the suit pending before the trial court.
(ANANT
S. DAVE, J.)
(swamy)
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