Gujarat High Court
Jayeshkumar Mathurbai Patel vs Mukeshbhai Vershibhai Desai on 27 April, 2022
Author: A. P. Thaker
Bench: A. P. Thaker
C/AO/130/2020 JUDGMENT DATED: 27/04/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/APPEAL FROM ORDER NO. 130 of 2020
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2020
In R/APPEAL FROM ORDER NO. 130 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE DR. JUSTICE A. P. THAKER
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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JAYESHKUMAR MATHURBAI PATEL
Versus
MUKESHBHAI VERSHIBHAI DESAI
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Appearance:
MR. MIHIR THAKORE, SR. ADVOCATE WITH SHASHVATA U
SHUKLA(8069) for the Appellant(s) No. 1,2
MR. KAMAL TRIVEDI, SR. ADVOCATE WITH MR SUNIL S JOSHI(2925) for
the Respondent(s) No. 5
NOTICE SERVED for the Respondent(s) No. 2,4
NOTICE SERVED BY DS for the Respondent(s) No. 3
SERVED BY PUBLICATION IN NEWS for the Respondent(s) No. 1
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CORAM:HONOURABLE DR. JUSTICE A. P. THAKER
Date : 27/04/2022
ORAL JUDGMENT
1. Being aggrieved and dissatisfied with the impugned order dated 19.2.2020 passed below Exh-5 by the learned Principal Page 1 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 Senior Civil Judge, Ahmedabad (Rural), Mirzapur, Ahmedabad in Special Civil Suit no. 119 of 2019 whereby the trial Court has disallowed the application filed by the plaintiffs-appellants for interim injunction, the original plaintiffs have preferred this Appeal from Order under Order 43 Rule 1(r) of Code of Civil Procedure.
2. The appellants are the original plaintiffs and the respondents are the defendants before the trial Court. For the brevity and convenience, the parties are referred to in this order as per the nomenclature assigned to them in the trial Court.
3. The plaintiff has filed the Suit for specific performance, cancellation of documents and declaration of injunction in respect to the Suit property being land revenue survey No. 52 admeasuring 0-48-56 Hect - Are- Sq. Mtrs and Survey No.53 admeasuring 0 - 52 - 61, Hect - Are - Sq. Mtrs (Final Plot No. 79 admeasuring 7500 sq. Mtrs of the TP Scheme no.3 (Vejalpur), situated at Mauje: Vejalpur, District:
Ahmedabad, on the following facts:
3.1 The suit properties originally belong to defendant Nos. 2 and 3, each having one-half share in the suit property. On 15.2.2017, notarised agreement to sell (Serial No. 250/17) was executed by defendant No.2 in favour of defendant no.1 with respect to her undivided one-half share of the suit property i.e. admeasuring 3750 sq. mtrs. On the same day, a Special Power of Attorney executed by defendant no.2 in Page 2 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 favour of defendant no.1 regarding the one-half share of the property which was notarised (Sr. No. 251/17).
3.2 On 30.11.2017, the defendant No.3 executed notarised possession Agreement-cum-declaration (1695/17) in favour of defendant no.1 for her one-half share of the suit property i.e. admeasuring 3750 sq.mts. On the same day, defendant no.3 has also executed a Special Power of Attorney in favour of defendant No.1, which was also notarised (1696/17). That on 1.5.2018, a registered agreement to sell No. 1034 came to be executed by defendant No.3 (through Power of Attorney) in favour of defendant No.1 regarding one-half share of suit property. On 2.5.2018, registered sale deed No.1044 came to be executed by defendant no.3 (through Power of Attorney) in favour of defendant No.4 regarding her one-half share of suit property admeasuring 3750 sq.mtrs.
3.3 On 14.5.2018, a registered sale deed No. 1157 came to be executed by defendant No.2 (through her Power of Attorney defendant No.1) in favour of defendant No.1 regarding one-half share of the suit property. On the same day, a notarised MoU came to be executed between defendant No.1 and plaintiff whereby defendant No.1 agreed to sell the suit property to the plaintiff and the plaintiff had already paid Rs. 84 Lakh under MoU to the defendant No.1.
3.4 It is alleged by the plaintiff that the defendant No.1 has Page 3 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 failed to get cancelled document, if any, executed by the defendant No.2 and 3 and also to execute the sale deed in their favour, the defendant No.1 did not care to do so.
According to the plaintiff, they came to know from the Newspaper that notice for title clearance was issued by the advocate for the rest of the defendants and on inquiry found that various documents which includes cancellation of the transaction between the defendant No.1 and defendant Nos. 2 & 3. It was also revealed that defendant No.4 has executed sale-deed on 19.12.2018 bearing No. 6863 and it is also revealed that defendant No.2 has also executed a deed in favour of defendant No.5 dated 5.12.2018 vide No. 6802. According to plaintiff, thus, the defendants have joined hands to frustrate the plaintiff's right in relation to the suit property. It is contended that the plaintiff has paid the consideration to defendant No.1 and the plaintiff is ready and willing to pay the remaining consideration amount and perform their part of contract. They have also alleged that the document executed in favour of defendant No.5 by the rest of the defendants Nos. 2 to 4 are not binding to the plaintiff and defendants Nos. 1, 2 and 3 are bound to execute sale deed in their favour. It is also contended that the defendant No.1 has breached the terms of MoU and, therefore, whatever transaction that has occurred between defendants is not binding to the plaintiff and the plaintiff is entitled to specific performance of the contract and for declaration and injunction and for cancellation of the sale deeds executed in favour of defendants Nos. 4 and 5.
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4. Along with the Plaint, the plaintiff has also filed Exh-5 for interim injunction. After considering the pleadings of both the parties and hearing both the sides, ultimately the trial Court has rejected the application of the plaintiff.
5. Heard Mr. Mihir Thakore, learned Senior Counsel assisted by Mr. Shashavata Shukla, learned counsel for the plaintiff and Mr. Kamal Trivedi, learned Senior Counsel assisted by Mr. Sunil Joshi, learned counsel for the defendant No.5 at length. Both the sides have submitted their written submissions and the same are also perused. Rest of the defendants, though served, have not appeared in this Appeal.
6. Mr. Mihir Thakore, learned Senior Counsel for the plaintiffs has vehemently submitted that the Suit land belongs to defendant Nos. 2 and 3 and they have equal shares. He has submitted that defendant No.2 executed agreement to sell of her one-half share in favour of defendant No.1 vide notarised document dated 15.2.2017. He has also submitted that on the same day, defendant No.2 has also executed Power of Attorney in favour of defendant No.2 in respect of one-half share of the suit property. He has also submitted that on 30.11.2011, defendant No.3 executed possession agreement-cum-declaration in respect of her one-half share of the suit property, which was notarised in favour of defendant No.1 and on the same day, defendant No.3 has also executed Special Power of Attorney in favour of defendant No.1. Mr. Thakore, learned Senior Counsel has Page 5 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 also submitted that on 1.5.2018, defendant No.3 through Power of Attorney, executed agreement to sell No. 1304 in favour of defendant No.1 regarding the one-half share of the suit property. He has also submitted that on the next date i.e. on 2.5.2018, registered sale-deed No. 1044 came to be executed by defendant No.3, through Power of Attorney in favour of defendant No.4 regarding her one-half share of the suit property. He has also submitted that on 14.5.2018, defendant No.2 through her Power of Attorney, executed sale deed in favour of defendant No.1 regarding her one- half share of the suit property. Mr. Thakore has also submitted that on the same date, there was a notarised MoU executed between the defendant No.1 with plaintiff whereby the defendant No.1 agreed to sell the suit property to the plaintiffs and the plaintiffs had already paid Rs. 84 Lakh under the said MoU to defendant No.1. Thus, according to Mr. Thakore, learned Senior Counsel, there was an agreement to sell of the suit property executed by defendant No.1 in favour of the plaintiff on the basis of the two sale deeds, executed by defendant Nos. 2 and 3 through their Power of Attorney holders in favour of defendant No.1.
6.1 Mr. Mihir Thakore, learned Senior Counsel has also submitted that there was some agreement for cancellation of the sale deed No. 1157 dated 14.5.2018 came to be allegedly executed by defendant No.2 through her Power of Attorney, in favour of defendant No.1. According to Mr. Thakore, learned Senior Counsel, once sale-deed is executed Page 6 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 between defendant No.2 and defendant No.1, it cannot be cancelled merely on the Stamp-paper of Rs.100/-. He has submitted that for cancellation of such transaction, a reconveyance deed needs to be executed between the parties. He has submitted that the alleged cancellation of sale-deed is non est from the very beginning. He has also submitted that mere cancellation of sale-deed cannot change the title. While referring to the alleged cancellation deed, Mr. Thakore has submitted that it is not a reconveyance and hence defendant No.1 remains owner of the land. He has also submitted that this document is alleged to be signed on 2.11.2018 but it has been registered on 29.1.2019. He has also submitted that before registration of this cancellation deed, there was registered sale deed executed by defendant No.2 in favour of defendant No.5 on 15.12.2018. He has also submitted that on 19.12.2018, there is one registered sale deed, executed by defendant No.4 in favour of defendant No.5. He has submitted that by virtue of alleged sale-deed in favour of defendant No.5, defendant No.5 has no title over one-half share of defendant No.2 as the alleged cancellation deed cannot reconvey the title in favour of defendant No.2. He has submitted that considering all these documentary evidence, the plaintiff has right to sue for specific performance of contract against all the defendants.
6.2 Mr. Thakore, learned Senior Counsel has also submitted that since there was sale transaction entered into between defendant Nos. 2 and 3 in favour of defendant No.1, and in Page 7 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 the meanwhile, sale transaction was occurred in favour of defendant Nos. 4 and 5, the title of the property cannot remain with defendant Nos.2 and 3 after the sale transaction entered into between defendant Nos. 2 and 3 with defendant No.1. He has submitted that in view of Section 91 of the Indian Trust Act, the defendants No. 4 and 5 are holding the property for the benefit of the plaintiff as they have notice of registered agreement to sell in favour of the plaintiffs. Mr. Thakore has relied upon the provision of Section 95 of the Indian Trust Act. He has also relied upon the provisions of Section 3 of Transfer of Property Act as well as Sections 13, 15 and 19 of the Specific Relief Act. He has submitted that since there was an agreement to sell entered into between defendant No.1 and the Plaintiff, the plaintiff has right to file suit against all the defendants for specific performance of the contract. He has submitted that there is a prima-facie case in favour of the Plaintiff and the plaintiff-appellant has paid huge amount of Rs.84 lakh to defendant No.1 and title over the land was never reconveyed in favour of defendant Nos. 2 and 3. He has submitted that the Suit for specific performance is maintainable and since there is agreement to sell is in existence, injunction must follow. He has also submitted that defendant No.1 has not appeared before the trial Court nor before this Court and has not denied the factum of execution of the MoU between him and the Plaintiff.
6.3 Mr. Mihir Thakore, learned Senior Counsel has also submitted that the one-half undivided share of defendant Page 8 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 No.2 stands irrevocably transferred to defendant No.1 by virtue of registered sale deed dated 14.5.2018, wheres the one-half undivided share of defendant No.3 has been agreed to be sold to defendant No.1 by way of agreement to sell dated 1.5.2018. He has submitted that the appellants- plaintiffs being representatives-in-interest of defendant No.1 by virtue of execution of MoU dated 14.5.2018, are entitled to sue for specific performance against all the defendants. He has submitted that since agreement to sell dated 1.5.2018 is a registered document, defendant Nos. 4 and 5 are deemed to have notice of the prior registered agreement to sell in favour of defendant No.1 for whom the plaintiffs are representatives-in-interest pursuant to the MoU dated 14.5.2018. He has also submitted that MoU dated 14.5.2018 has not been cancelled and is valid and is subsisting and enforceable by the plaintiffs against the defendants. He has also submitted that the learned trial Court has materially erred in rejecting the application for interim injunction on the ground that plaintiff's right to MoU dated 14.5.2018 does not survive. He has also submitted that trial Court has not considered the documentary evidence and the pleadings of the parties in proper perspective while holding that the plaintiff has no prima- facie case and has also committed error in placing onus upon the plaintiff to prove the negative. He has submitted that the trial Court has materially erred in not considering the fact that defendant Nos. 4 and 5 had knowledge regarding prior MoU between defendant No.1 and plaintiff and the trial Court ought to have granted interim injunction Page 9 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 restraining the defendant No.5 from making any construction or transferring, alienating or in any manner creating any third party right in the Suit property. Mr. Thakore, learned Senior Counsel has submitted to allow the present appeal and pass interim injunction in favour of the plaintiffs-appellants against the defendants as claimed in the interim injunction.
6.4 Mr. Mihir Thakore, learned Senior Counsel has relied upon the following decisions in support of his submissions:
1. Maharwal Khewaji Trust (Regd.) v. Baldev Dass, reported in (2004) 8 SCC 488;
2. Vasantha Viswanathan v. V.K. Elayalwar, reported in (2001) 8 SCC 133;
3. Silla Chandra Sekharam v. Ramchandra Sahu, reported in (1964) 7 SCR 858;
4. Pahunchi Lal v. Man Singh, reported in 1971 SCC OnLine ALL 308;
5. Anand Prasad Agarwalla v. Tarkeshwar Prasad, reported in (2001) 5 SCC 568;
6. Latif Estate Line India Ltd., rep. By its Managing Director, Mr. Habib Adbul Latif v. Hadeeja Ammal and others, reported in [2011 (2) CTC 1];
7. M. Ihtishan Ali and another v. Jamna Prasad and others, repoted in [AIR 1922 Privy Council 56];
8. Durga Prasad and another v. Deep Chand and others, reported in [AIR 1954 SC 75];
9. Natwarlal Ranchhoddas Patel v. Harendrabhai Somjibhai Patel, reported in [2021 (0) AIJEL- HC 242784];Page 10 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022
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10. Ghulam Mohammad v. Lakha Singh, reported in [AIR 1935 LAH 181 (2)];
11. (Chinna) Munuswami Nayudu v. Sagalaguna Nayudu, reported in [AIR 1926 MAD 699];
12. Sakalaguna Nayudu and another v. Chinna Munuswami Nayakar, reported in AIR 1928 PC 174;
13. Vishweshwar Narsabhatta Gaddada v. Durgappa Irappa Bhatkar and Another, reported in [ILR 1940 BOM 674]
14. Budda Adeyyamma v. Kandregula Simhachalam & Ors, reported in [AIR 2009 (NOC) 850 (A.P.)];
15. Satya Pal Anand v. State of Madhya Pradesh, reported in (2016) 10 SCC 767;
16. Dahiben v. Arvindbhai Kalyanji Bhanushali & Others, reported in (2020) 7 SCC 366;
17. Kewal Krishan v. Rajesh Kumar and Others, reported in 2021 SCC Online SC 1097;
18. Shriram Surajmal v. Shri Ram Zunzunwala, reported in 1936 ILR Vol. 60, page 788;
19. Maheshbhai Jivrajbhai Gujarati v. Krishna Pravinbhai Gujarati, reported in 2021 (4) GLH 381;
20. Natvarlal Ranchhoddas Patel v. Harendrabhai Somjibhai Patel, reported in AIR 2021 Guj 110;
21. Kapilaben v. Ashok Kumar Jayantilal Shah, reported in 2019 SCC OnLine 1512;
7. Mr. Kamal Trivedi, learned Senior Counsel for defendant No.5 has vehemently submitted that the plaintiffs- appellants are heavily relying upon the alleged MoU dated 14.5.2018, but, the same has came to be cancelled vide cancellation deed dated 28.8.2018 entered into between Page 11 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 defendant No.1 Mukeshbhai Versibhai Desai and Appellant No.1- Jayeshkumar Mathurbhai Patel. He has also submitted that, therefore, there does not arise any question of specific performance. He has further submitted that the alleged MoU dated 14.5.2018 refers to the payment of cash amount of Rs. 84 lakh by the plaintiffs to defendant No.1, however, there is no material placed on record as to how this amount was paid and no Income Tax Returns thereof have been produced. Mr. Kamal Trivedi, learned Senior Counsel also submitted that against this the defendant has paid the amount of consideration by way of cheques and it has already incurred expense of more than Rs. 80 Crore. He has also submitted that the alleged MoU has become void as it was a contingent contract within the meaning of Section 23 of the Indian Contract Act, where its performance depends upon the happening of the events of cancellation/ revocation of the registered sale deed dated 2.5.2018 executed by original land owner i.e. defendant No.3 in respect of one-half share in the land in favour of defendant No.4, which has been thereafter sold to defendant No.5 on 19.12.2018. While referring to the MoU, Mr. Trivedi learned Senior Counsel has also submitted that it has been executed by defendant No.1 not as a Power of Attorney holder of land owners i.e. defendant Nos. 2 and 3, but an agreement to sell of the shares of defendant Nos. 2 and 3 and, therefore, the said MoU of which specific performance is sought, is assigning of limited interest of defendant No.1 of the land in question, which could not have been done without the consent of the land owners i.e. defendant Nos. 2 and 3 or Page 12 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 their transferees i.e. defendant Nos. 4 and 5. He has also submitted that there is no privity of contract between plaintiff on one hand and the land owners i.e. defendant Nos. 2 and 3 or their subsequent vendees i.e. defendant Nos. 4 and 5. He has submitted that, therefore, there is no applicability of provisions of Section 19(b) of the Specific Relief Act.
7.1 Mr. Kamal Trivedi, learned Senior Counsel has also submitted that the cancellation deed dated 2.11.2018 executed between defendant Nos. 1 and 2 for cancellation of an unregistered sale-deed dated 14.5.2018, are valid as there was no sale consideration paid by defendant No.1 to defendant No.2 under unregistered sale-deed dated 14.5.2018 which has been admitted by defendant No.1 himself in the cancellation deed. He has also submitted that as noted by the Collector of Stamps in his order dated 22.1.2019, the sale-deed dated 14.5.2018 was not registered and hence such unregistered sale-deed has no efficacy in law and the title was never passed from defendant No.2 to defendant No.1 and, therefore, there was no question arise for any reconveyance. He has further submitted that such cancellation was done by both the defendant Nos. 1 and 2 jointly and not by defendant No.2 unilaterally. He has also submitted that the provision relating to Registration Act in Gujarat are different from those operating in State of Tamil Nadu and Andhra Pradesh where cancellation deed executed unilaterally does not have any efficacy to extinguish right created in favour of the transferee. He has Page 13 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 submitted that such a deed of cancellation is permissible in the eyes of law.
7.2 Mr. Kamal Trivedi, learned Senior Counsel has also submitted that the alleged sale deed dated 14.5.2018 executed by defendant No.2 to defendant No.1, is in- operative as the same is alleged to have been executed by defendant No.1 has her Power of Attorney holder unto himself and consideration of Rs. 40 Lakh, is stated to have been paid thereunder as against agreed consideration of Rs. 5.86 crore. He has also submitted that this sale-deed came to be cancelled vide registered cancellation deed dated 2.11.2018 wherein it is admitted by the defendant No.1 that he has not paid any consideration to defendant No.2 nor any possession is delivered thereunder. He has submitted that the execution of sale-deed by the defendant No.2 in favour of defendant No.5 is legal and valid.
7.3 Mr. Kamal Trivedi, learned Senior Counsel also submitted that the defendant No.1 is a history sheeter and is a land grabber. He has submitted that the title of one-half share of defendant No.2 never passed in favour of defendant No.1 as it was based on void sale-deed. He has also submitted that none of the documents, on which the plaintiff placed reliance, are registered one. He has also submitted that there is a gross delay in approaching trial Court as well as this Court. He has submitted that the Suit was filed after 10 months of alleged MoU. He has also submitted that the trial Court's order has been challenged before this Court after 8 Page 14 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 months. He has submitted that this fact also needs to be considered while deciding the interim injunction application. He has submitted that the trial Court has properly appreciated the facts and circumstances of the case and has rightly rejected the interim injunction application of the plaintiffs-appellants.
7.4 Mr. Trivedi, learned Senior Counsel has submitted that the land has already been developed by defendant No.5 by constructions of six Towers with 12 Floors each with huge numbers of Offices and there are number of registered sale- deed executed in favour of third party and third party interest is already been created. He has submitted that even there is delay on the part of the plaintiff in approaching the Court and all throughout there was no injunction in favour of the plaintiff. He has also submitted that the trial Court has properly considered the facts and circumstances of the case and has rightly rejected the application of interim injunction of the plaintiff. He has submitted that the impugned order does not require any interference. He has relied upon the following decisions in support thereof:
(1) Ambalal Sarabhai Enterprise Ltd. v. Infraspace LLP Ltd., reported in (2020) 5 SCC 410;
(2) Kishorsinh Ratansinh Jadeja v. Maruti Corporation, reported in (2009) 11 SCC 229;
(3) Mandali Ranganna v. T. Ramachandra, reported in (2008) 11 SCC 1;
(4) Harshadkumar Kantilal Bhalodwala v. Ishwarbhai Chandubhai Patel, reported in 2010 (1) GLH 112;Page 15 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022
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(5) Ramnikbhai Vajubhai Kyada v. Bhupatbhai Labjibhai
Thumar, reported in 2013 (0) GLHEL-HC 229647; (6) Yeshwant Laxman Pai Raikar v. Laxman V. Singbal, reported in 2011 (1) CCC 77 (Bom);
(7) Kapilaben v. Ashok Kumar Jayantilal Shah, reported in 2019 SC OnLine 1512;
(8) Yanala Malleshwari W/o. Y. Yadagiri Reddy v. Smt. Ananthula Sayamma W/o. Late Gopaiah, reported in 2006 SCC OnLine AP 909;
(9) Thota Ganga Laxmi v. State of Andhra Pradesh, reported in (2010) 15 SCC 207;
(10) Satya Pal Anand v. State of Madhya Pradesh, reported in (2016) 10 SCC 767.
8. Mr. Kamal Trivedi, learned Senior Counsel has submitted that the various decisions which have been relied upon by the plaintiffs are not applicable to the facts of the present case.
9. In rejoinder, Mr. Mihir Thakore, learned Senior Counsel in his written submission has reiterated the facts and legal aspects which were submitted earlier. In addition to it, he has submitted that the registered sale-deed could not be cancelled by executing the so-called deed of cancellation dated 2.11.2018 between defendant No.1 and defendant No.2. Mr. Thakore, learned Senior Counsel has also submitted that the observation of the Sub-Registrar in relation to the so-called deed of cancellation cannot affect the right in respect of immovable property. It is also contended that an attempt of the defendant No.5 to distinguish the judgment of the full bench of Gujarat High Page 16 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 Court in Latif Estate Line Ltd v. Hadeeja Ammal and Others (Supra), the same is based upon incorrect premises. It is also contended that the question of validity of registration, which arose in that case and the effect of execution of the document on the question of title which arise in the present case, are different. It is also contended that the case of Satyapal Anand v. State of Madhya Pradesh and Others (Supra) is not applicable to the facts of the present case and is not an authority for the proposition that title can be revested by the execution of a mere deed of cancellation without a re-conveyances held by the Privy Council in case of M. Ihtishan Ali (Supra).
9.1 Regarding the submission of learned Senior Counsel Mr. Kamal Trivedi as to non-payment of sale consideration by defendant No.1 to defendant No.2, it is submitted by Mr. Mihir Thakore, learned Senior Counsel that in view of Section 54 of the Transfer of Property Act, payment of sale consideration is not a sine qua non for the transfer of interest in immovable property since sale consideration can also be wholly promised under Section 54 of the Transfer of Property Act. For this proposition, he has placed reliance upon the decision in case of Dahiben v. Arvindbhai Kalyanji Bhanusali & Others (Supra). Regarding the reliance upon the decision in case of Kewal Krishan v. Rajesh Kumar and Others (Supra) by the defendant, it is submitted by Mr. Mihir Thakore, learned Senior Counsel that same is not applicable in the facts of the present case as in that case the seller in the sale deed was father and the purchaser of the sale-deed Page 17 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 were his minor Sons and, therefore, the Hon'ble Apex Court has observed that the sale-deed was bogus, sham and void.
9.2 Mr. Mihir Thakore, learned Senior Counsel has also submitted that the contention of defendant No.5 that the assignment is only of limited interest, is devoid of merits, in view of the MoUs as well as the earlier agreement to sell entered into between defendant No.1, defendant No.2 and defendant No.3 and MoU entered between the plaintiff and defendant No.1. He has also submitted that the MoU dated 4.5.2018 has not been cancelled and is valid and subsisting.
9.3 Regarding the contention of the defendant No.5 as to payment of cash consideration, it has been submitted by Mr. Thakore, learned Senior Counsel that the plaintiff has already placed on record the part of Books of Account to show the payment of Rs. 84 lakh to defendant No.1. He has also submitted that receipts of Rs. 84 Lakh has not been denied by defendant No.1. He has also submitted that by producing the Books of Account, the plaintiff has disclosed the source of funds and payments thereof.
9.4 Regarding the submission on the point that MoU is by a contingent contract, it has been submitted that the clauses in the MoU dated 14.5.2018 carry an absolute obligation to transfer the Suit property to the plaintiffs-appellants and the same was not conditioned or contingent upon the title to the suit property becoming clear and marketable as held by this Court in the case of Maheshbhai Jivrajbhai Gujarati v.
Page 18 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022C/AO/130/2020 JUDGMENT DATED: 27/04/2022 Krishna Pravinchandra Gujarati (Supra). Regarding the delay aspect, it has been submitted that there is no delay occurred in filing the present suit as well as present Appeal. It is submitted by him that the registered sale-deed in favour of defendant No.5 were executed only on 15.12.2018 and 19.12.2018 and the Raja Chithhi was granted by the Ahmedabad Municipal Corporation on 28.1.2019. It is submitted by him that the plaintiff has filed the Suit for specific performance at the earliest possible of opportunity and within 90 days of execution of the sale deed in favour of defendant No.5. It is also submitted that due to Covid-19 Pandemic, the Appeal was not present promptly and, therefore even there is no delay in approaching the trial Court. He has also submitted that defendant No.5 cannot be permitted to claim any equity for his own action of continuing of carrying on the construction despite pendency of the Suit upon the principle that act of Court shall prejudice no man. He has ultimately submitted that the contention raised by the defendant No.5 are meritless and considering the documentary evidence on record, this Court need to interfere with the order of the trial Court and pass interim injunction restraining the defendant from carrying out any further construction and create any third party interest in the property.
10. In the case of Maharwal Khewaji Trust (Regd.) v. Baldev Dass (Supra), it is held in Para-10 as under:
"10. Be that as it may, Mr. Sachhar is right in contending that unless and untill a case of irreparable loss or damage is made out Page 19 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 by a party to the suit, the court should not permit the nature of the property being changed which also includes alienation or transfer of the property which may lead to loss or damage being caused to the party who may ultimately succeed and may further lead to multiplicity of proceedings. In the instant case no such case of irreparable loss is made out except contending that the legal proceedings are likely to take a long time, therefore, the respondent should be permitted to put the scheduled property to better use. We do not think in the facts and circumstances of this case, the lower appellate court and the High Court were justified in permitting the respondent to change the nature of property by putting up construction as also by permitting the alienation of the property, whatever may be the condition on which the same is done. In the event of the appellant's claim being found baseless ultimately, it is always open to the respondent to claim damages or, in an appropriate case, the court may itself award damages for the loss suffered, if any, in this regard. Since the facts of this case do not make out any extraordinary ground for permitting the respondent to put up construction and alienate the same, we think both the courts below, namely, the lower appellate court and the High Court erred in making the impugned orders. The said orders are set aside and the order of the trial court is restored."
11. In case of Vasantha Viswanathan v. V.K. Elayalwar (Supra), the para-13 reads as under"
"13. The further submission of Shri Chandra is that in any view of the matter, the High Court was not justified in passing a decree against defendant nos. 4 to 7 as there was no privity of contract between them and the plaintiff. The High Court has recorded a categorical finding that these defendants were not Page 20 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 bona fide purchasers and had notice of the agreement between the plaintiff and the Ist defendant which finding has not been assailed before this Court. Learned Senior Counsel appearing on behalf of both the parties are in agreement that the High Court was not justified in holding that the present case would be governed by Section 52 of the Transfer of Property Act as the same applies to immovable property alone and not to movable. Section 58 of the Sale of Goods Act expressly lays down that subject to the provisions of Chapter II of the Specific Relief Act, 1877, in a suit for breach of contract to deliver specific or ascertained goods, the court may, if it thinks fit, on the application of the plaintiff, by its decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages. It further lays down that decree may be unconditional, or upon such terms and conditions as to damages, payment of price, or otherwise, as the court may deem just and the application of the plaintiff may be made at any time before the decree. Section 19(b) of the Specific Relief Act, 1877, which occurs in Chapter II, applies to moveables by virtue of the provisions of Section 58 of the Sale of Goods Act referred to above. Under Section 19(b) a specific performance of a contract can be enforced not only against either party thereto but against any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of original contract. Further, Section 91 of the Indian Trusts Act, 1882 lays down that where a person acquires property with notice that another person has entered into an existing contract affecting that property, of which a specific performance could be enforced, the former must hold the property for the benefit of the latter to the extent necessary to Page 21 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 give effect to the contract. Defendant nos. 4 to 7 had notice of the contract between the plaintiff and the Ist defendant and they were not bona fide purchasers, therefore, in view of the provisions referred to above, we are of the view that the High Court was quite justified in passing a decree against them as well".
12. In case of Pahunchi Lal v. Man Singh (Supra), Para-12 reads as under:
12.The third ground that since the Court itself could not acquire Bhumidhari rights in the Sirdari plots as it could not make any application under the provisions of the U. P. Zamindari Abolition and Land Reforms Act is devoid of substance. The undertaking of the defendant as vendor that he shall take steps under the U. P. Zamindari Abolition and Land Reforms Act to obtain Bhumidhari rights in the Sirdari land agreed to be sold is by itself enforceable under the terms of the contract evidenced by the document Ext. I dated 4-5-1963. Section 13(b) of the Specific Relief Act can usefully be referred to in this connection which says that if the concurrence of other persons is necessary for validating the title, and they are bound to concur at the request of the vendor or lessor, the purchaser or lessee may compel him to procure such concurrence. I think the Court has the power and jurisdiction under Section 13(b) of the Specific Relief Act to compel the defendant to take steps and obtain Bhumidhari rights in the Sirdari land agreed to be sold. This argument also fails."
13. In the case of Latif Estate Line India Ltd., rep. By its Managing Director, Mr. Habib Adbul Latif v. Hadeeja Ammal and others ( Supra), it is held in paras-52 to 59 as under:Page 22 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022
C/AO/130/2020 JUDGMENT DATED: 27/04/2022 "52. Now the question that falls for consideration is as to whether once a sale is made absolute by transfer of ownership of the property from the vendor to the purchaser, such transfer can be annulled or cancelled by the vendor by executing a deed of cancellation. This question came up for consideration before the four Judges of the Privy Council (Viscount Haldane, Lord Phillimore, Sir John Edge and Sir Robert Stout) in Md.Ihtishan Ali vs. Jamna Prasad reported in AIR 1922 Privy Council 56. The fact of that case was that one Ehsan Ali Khan, being in possession of a bazaar called Ehsaganj mortgaged it to one Sheo Prasad by a mortgage deed dated 9th November, 1873 and further encumbered it with charges in favour of the mortgagee. In the year 1882, the said Ehsan Ali sold the property, subject to the mortgage and charges to the appellants predecessors in title.
Dispute arose with regard to the devolution of interest, and said Ehsan Ali cancelled the deed and retained his interest and that he, in fact, dealt with it subsequently by further charges in favour of the mortgagee and by professing to sell it over again to Wasi- uz-Zaman. While deciding the issue, His Lordship Lord Phillimore, speaking for the Bench, observed and held as under:- (page 58) "While making these comments, their Lordships reserve their opinion as to the value of a defence founded upon such a transaction as the defendants set up. Certainly in law, no title would pass under it, for immovable property of this value can only be transferred by a registered deed, and when a deed of sale has been once executed and registered, it can only be avoided by a subsequent registered transfer. Whether in some form of suit( not this one) between some parties any equitable relief could be got out of such a transaction, it is unnecessary to pronounce, for in their Lordships opinion it was not proved.
Page 23 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022C/AO/130/2020 JUDGMENT DATED: 27/04/2022 As to the alleged subsequent dealings by Ehsan Ali Khan with the property, they could not, if regarded as declarations in his own favour, be received in evidence on behalf of those claiming under him, any more than they could be received if he were himself the defendant. They could not be regarded as acts of ownership so as to prove adverse possession, because he never was in possession, the possession remaining in the mortgagee."
53. A similar question came up for consideration before the Orissa High Court in the case of Michhu Kuanr and Ors v. Raghu Jena and Ors. reported in AIR 1961 Orissa 19, as to the effect of cancellation of sale deed by the vendor on the allegation that consideration amount was not paid. While considering the question the Bench observed:-
The question of intention could only arise if no consideration passed in the context of this back ground and the surrounding circumstances the subsequent deed of cancellation is irrelevant. Once by the registered sale deed Ex. 1 title had passed to the vendees, the subsequent deed of cancellation Ex.A certainly could not nullify the effect of the already completed sale deed Ex.1.µ
54. There is no provision in the Transfer of Property Act or in the Registration Act, which deals with the cancellation of deed of sale. The reason according to us is that the execution of a deed of cancellation by the vendor does not create, assign, limit or extinguish any right, title or interest in the immovable property and the same has no effect in the eye of law. A provision relating to the cancellation of a document is provided in Section 31 of the Specific Relief Act, 1963 (Old Section 39). Section 31 reads as under:-
31.When cancellation may be ordered:- (1) Any person against whom a written instrument is void or voidable, Page 24 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 and who has reasonable apprehension that such instrument, if left outstanding, may cause him serious injury, may sue to have it adjudged void or voidable, and the Court may, in its discretion, so adjudge it and order it to be delivered up and cancelled.
(2) If the instrument has been registered under the Indian Registration Act, 1908 (16 of 1908), the Court shall also send a copy of its decree to the officer in whose office the instrument has been so registered; and such officer shall note on the copy of the instrument contained in his books the fact of its cancellation.µ
55. From the reading of the aforesaid provision, it is manifest that three conditions are requisite for the exercise of jurisdiction to cancel an instrument ie., (1) An instrument is avoidable against the plaintiff;
(2) The plaintiff may reasonably apprehend serious injury by the instrument being left or outstanding; and (3) In the circumstances of the case, the Court considers it proper to grant this relief of preventive justice.
56. A Full Bench of the Madras High Court in the case of Muppudathi Pillai Vs. Krishnaswami Pillai, AIR 1960 Madras 1 elaborately discussed the provision of Section 39 (New Section
31) and held:-
12. The principle is that such document though not necessary to be set aside may, if left outstanding, be a source of potential mischief. The jurisdiction under Section 39 is, therefore, a protective or a preventive one. It is not confined to a case of fraud, mistake, undue influence, etc. and as it has been stated it was to prevent a document to remain as a menace and danger to the party against whom under different circumstances it might have operated. A party against whom a claim under a document Page 25 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 might be made is not bound to wait till the document is used against him. If that were so he might be in a disadvantageous position if the impugned document is sought to be used after the evidence attending its execution has disappeared. Section 39 embodies the principle by which he is allowed to anticipate the danger and institute a suit to cancel the document and to deliver it up to him. The principle of the relief is the same as in quia timet actions.
57. There is no dispute that a third party can claim title to the property against the purchaser who purchased the property for valuable consideration and came into possession of the same. But it is the Civil Court of competent jurisdiction to give such declaration in favour of the third party or a stranger.
58. It can also not be overlooked or ignored that a unilateral cancellation of a sale deed by registered instrument at the instance of the vendor only encourages fraud and is against public policy. But there are circumstances where a deed of cancellation presented by both the vendor and the purchaser for registration has to be accepted by the Registrar if other mandatory requirements are complied with. Hence, the vendor by the unilateral execution of the cancellation deed cannot annul a registered document duly executed by him as such an act of the vendor is opposed to public policy.
59. After giving our anxious consideration on the questions raised in the instant case, we come to the following conclusion: -
(i) A deed of cancellation of a sale unilaterally executed by the transferor does not create, assign, limit or extinguish any right, title or interest in the property and is of no effect. Such a document does not create any encumbrance in the property already transferred. Hence such a deed of cancellation cannot be accepted for registration.Page 26 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022
C/AO/130/2020 JUDGMENT DATED: 27/04/2022
(ii) Once title to the property is vested in the transferee by the sale of the property, it cannot be divested unto the transferor by execution and registration of a deed of cancellation even with the consent of the parties. The proper course would be to re-convey the property by a deed of conveyance by the transferee in favour of the transferor.
(iii) Where a transfer is effected by way of sale with the condition that title will pass on payment of consideration, and such intention is clear from the recital in the deed, then such instrument or sale can be cancelled by a deed of cancellation with the consent of both the parties on the ground of non-payment of consideration. The reason is that in such a sale deed, admittedly, the title remained with the transferor.
(iv) In other cases, a complete and absolute sale can be cancelled at the instance of the transferor only by taking recourse to the Civil Court by obtaining a decree of cancellation of sale deed on the ground inter alia of fraud or any other valid reasons.
14. In case of M. Ihtishan Ali and another v. Jamna Prasad and others, (Supra), it is observed that;
"While making these comments, their Lordships reserve their opinion as to the value of a defence founded upon such a transaction as the defendants set up. Certainly in law no title would pass under it, for immovable property of this value can only be transferred by a registered deed, and when a deed of sale has been once executed and registered it can only be avoided by a subsequent registered transfer. Whether in some form of suit (not this one) between some parties any equitable relief could be Page 27 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 got out of such a transaction it is unnecessry to pronounce, for in their Lordships' opinion it was not proved.
15. In case of Durga Prasad and another v. Deep Chand and others (Supra), the Paras-37 to 42 read as under:
"37. The practice of the courts in India has not been uniform and three distinct lines of thought emerge. (We are of course confining our attention to a Purchaser's suit for specific performance). According to one point of view, the proper form of decree is to declare the subsequent purchase void as against the plaintiff and direct conveyance by the vendor alone. A second considers that both vendor and vendee should join, while a third would limit execution of the conveyance to the subsequent purchaser alone.
38. The only statutory provisions which bear on this point are section 91 of the Indian Trusts Act, 1882, section 3 of the Specific Relief Act, 1877, illustration (g), and section 27 of that Act, and section 40 of the Transfer of Property Act.
39. Section 91 of the Trusts Act, does not make the subsequent purchaser with notice a trustee properly so called but saddles him with an obligation in the nature of a trust (because of section 80) and directs that he must hold the property for the benefit of the prior "contractor", if we may so describe the plaintiff, "to the extent necessary to give effect to the contract."
Section 3 illustration (g) of the Specific Relief Act makes him a trustee for the plaintiff but only for 'the purposes of that Act. Section 40 of the Transfer of Property Act enacts that this obligation can be enforced against a subsequent transferee with notice but not against one who holds for consideration and without notice. Section 27 of the Page 28 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 Specific Relief Act does not carry the matter any further. All it savs is that specific performance may be enforced against "
"(a) either party thereto;
(b)any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract".
None of this helps because none of these provisions directly relate to the form of the decree. It will there- fore be necessary to analyse each form in the light of other provisions of law.
40. First, we reach the position that the title to the property has validly passed from the vendor and resides in the subsequent transferee. The sale to him is not void but only voidable at the option of the earlier "contractor". As the title no longer rests in the vendor it would be illogical from a conveyancing point of view to compel him to convey to the plaintiff unless steps are taken to re-vest the title in him either by cancellation of the subsequent sale or by reconveyance from the subsequent purchaser to him. We do not know of any case in which a reconveyance. to the vendor was ordered but Sulaiman C. adopted the other course in Kali Charan v. Janak Deo(1). He directed cancellation of the subsequent sale and conveyance to the plaintiff by the vendor in accordance with the. contract of sale of which the plaintiff sought. :specific performance. But though this sounds logical the objection to it is that it might bring in its train complications between the vendor and the subsequent purchaser. There may be covenants in the deed between them which it would be inequitable to disturb by cancellation of their deed. Accordingly, we do not think that is a desirable solution.
41. We are not enamoured of the next alternative either, namely, conveyance by the subsequent purchaser alone to the Page 29 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 plaintiff. It is true that would have the effect of vesting the title to the property in the plaintiff but it might be inequitable to compel the subsequent transferee to enter into terms and covenants in the vendor's agreement with the plaintiff to which he would never have agreed had he been a free agent; and if the original contract is varied by altering or omitting such terms the court will be remaking the contract, a thing it has no power to do; and in any case it will no longer be specifically enforcing the original contract but another and different one.
42. In our opinion, the proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff. This was the course followed by the Calcutta High Courtin Kafiladdin v. Samiraddin (I), and appears to be the English practice. See Fry on Specific Performance, 6th edition, page 90, Paragraph 207 ; also Potter v. Sanders( 2 ). We direct accordingly.
16. In case of Natwarlal Ranchhoddas Patel v. Harendrabhai Somjibhai Patel (Supra);
"8. Regard being had to the submissions advanced by the learned advocates for the respective parties and considering the papers available on record, facts as emerge, the appellants are the original defendants Nos. 17 to 28, who came to be joined in the suit in question subsequently by virtue of an order below exh. 27 dated 07.01.2016. Further, the appellants are stated to be the purchasers of the land in question for which, a registered sale deed has been executed 03.06.2014. It is also stated that the appellants have also purchased the rest property (other than Page 30 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 967.83 sq. mtrs.), sold by the original defendant Nos. 1 and 2 by a registered sale deed dated 10.03.2014. Thus, in short, the appellants are the purchasers of the entire chunk of land. The respondent Nos. 1 and 2 are the original plaintiffs, who have filed the suit in question for specific performance, declaration and permanent injunction on the basis that the original defendant Nos. 1 and 2 have executed a registered agreement to sell dated 16.01.2014 in their favour.
8.1 At this juncture, it is pertinent to note that, indisputably,the suit property is an ancestral property and partition of the same has yet not been effected to, neither any proceedings appears to have been pending in any Court of law.
8.2 In the aforesaid facts and circumstances of the case, there appears to be two stakeholders of the property in question viz. the present appellants as well as the respondent Nos. 1 and 2 (original plaintiffs), one by virtue of a registered agreement to sell and another by virtue of a registered sale deed, as referred to herein above. It is also a claim of the appellants that they have purchased the entire chunk of land by way of two different registered sale deeds.
8.3 In the above backdrop, it would be apt to refer to section 52 of the Transfer of Property Act, 1882 is relevant, which reads thus:
"52. Transfer of property pending suit relating thereto.-- During the 1[pendency] in any Court having authority 2[3[within the limits of India excluding the State of Jammu and Kashmir] or established beyond such limits] by 4[the Central Government 5***] of 6[any] suit or proceeding 7 [which is not collusive and] in which any right to immovable property is directly and specifically in Page 31 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 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.
8.4 A perusal of the record, prima facie, reveals that the suit in question was filed on 13.03.2014 and the defendant Nos. 1 to 16 (respondent Nos. 3 to 18 herein) came to be served on 19.03.2014, whereas, the sale deed in favour of the appellants appears to have been executed on 03.06.2014 qua the suit land. Thus, it is crystal clear that the suit property is transferred pendent lite, and against the doctrine of lis pendens. The Court is conscious of the settled legal position that the doctrine of lis pendens does not annul the conveyance by a party to the suit, but only renders it subservient to the rights of the other parties to the litigation. Section 52 will not, therefore, render a transaction relating to the suit property during the pendency of the suit void but render the transfer inoperative insofar as the other parties to the suit. Transfer of any right, title or interest in the suit property or the consequential acquisition of any right, title or interest, during the pendency of the suit will be subject to the decision in the suit.
8.5 As observed earlier, it is the indisputable fact that the entire property is undivided and partition between the original owners appears to have yet not taken place and in the circumstances, in the considered opinion of this Court, and as observed by the learned trial Judge, if the status quo qua the entire property is not granted, the original plaintiffs might have irreparable loss. Further, it is also a fact that an aggrieved party of the outcome of the suit, Page 32 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 can very well take recourse to the remedy available to it under the law, and therefore, the present appeal merits no consideration.
8.6 So far as agreement to sell dated 17.02.2012, as drew attention by the learned senior counsel for the appellants, is concerned, a perusal of the record reveals no such contention appears to have been taken by the appellants before the trial Court and that, there is not a whisper in the impugned order as regards the same. The Court has gone through the decision in Thomson Press (India) Limited (supra) as relied by the learned senior counsel for the appellants, Head Notes 'B' and 'D' of the same reads thus:
"B. Specific Relief Act, 1963 - S. 19(b) - Specific performance of prior agreement to sell/contract for sale (CFS) against purchaser pendente lite - When available to buyer under prior CFS - Explained - Held, sale of immovable property is immune from specific performance of prior CFS only if transferee has acquired title for valuable consideration, in good faith and without notice of prior CFS
- In instant case, appellant-transferee pendente lite, held, is not protected against specific performance of prior CFS at behest of R-1 plaintiff buyer thereunder as transfer in favour of appellant though for valuable consideration, was not in good faith nor was it without notice of said prior CFS
- Transfer of Property Act, 1882 - S. 40 Paras 2 and 3, Ss. 3 and 54 - Trusts Act, 1882, S. 91."
"D. Transfer of Property Act, 1882 - S. 52 - Doctrine of lis pendens - What is - Transfer pendent lite - Validity of, and Page 33 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 effect of S. 52 - Doctrine of lis pendens is based on ground that it is necessary for administration of justice that decision of a court in a suit should be binding not only on litigating parties but on those who derive title pendente lite
- S. 52 however does not annul pendente lite conveyance or transfer or make it void but renders it subservient to rights of parties to a litigation as may be eventually determined by court - Thus, transfer made in favour of subsequent purchaser is subject to riders and restraint orders passed by court, if any."
8.7 In instant case, the suit property has been transferred in favour of the appellants pendent lite. Further, the same is undivided property of the original owners, and partition has yet to take place and in the circumstances, the learned trial Court has rightly taken such a view. Further, no such plea qua execution of prior agreement to sell, than that in favour of the plaintiffs, appears to have been taken before the concerned Court below nor any observations qua that reflect in the impugned order. Further, as held by the Hon'ble Apex Court in the aforesaid decision, the doctrine of lis pendens is based on ground that it is necessary for administration of justice that decision of a Court in a suit should be binding not only on litigating parties but on those who derive title pendente lite. Section 52, however, does not annul pendente lite conveyance or transfer or make it void but renders it subservient to the rights of parties to a litigation as may be eventually determined by Court. Thus, transfer made in favour of subsequent purchaser is subject to riders and restraint orders passed by Court, if any. Hence, considering the facts and Page 34 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 circumstances of the case on hand, the aforesaid decision would be of no avail to the appellants.
17. In the case of Ghulam Mohammad v. Lakha Singh (Supra), it is observed that, "equally devoid of force is the third point, namely, that the plaintiff's suit must fail for want of privity of contract between him and Gulam Muhammad, appellant. S.23, Cl(b), Specific Relief Act, permits the representative in interest of a party to an agreement to sue for its specific performance. There can be no doubt that in the present case the plaintiff is the representative-in-interest of Diwan Singh in whose favour the agreement Ex. P-1 had been executed by Ghulam Muhammad and the case does not fall within any of hte provisions to Cl. (b). The plaintiff therefore has clearly a locus standi to maintain the suit. No other point has been urged before us. I hold that this appeal is without force and would dismiss it with costs."
18. In the case of (Chinna) Munuswami Nayudu v. Sagalaguna Nayudu (Supra), it is observed that, "a right under an executory contract to exercise an option at a certain future date to obtain a reconveyance of immovable property at a certain price is assignable. Such a transaction does not offend the rule against perpetuities as it does not create an interes in land in India, whatever the rule in England may be." It is also observed that, "an offer or proposal cannot of course be enforced till it is accepted; but here the parties had gone beyond the stage of proposal and had entered into a contract which was supported by consideration, as was found in the Page 35 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 trial Court". It is also observed that, "I may observe that the translation of Ex. B at page 15 is not quite correct. The vernacular word "Thanga-lukkai" is a merely emphatic form of saying "you", and though, if it occurs by itself, it may be translated as "you only"; in this case it represents the vernacular idiom, the emphatic form being sometimes used when the word is repeated in the same sentence. There is no word for "only". Mr. Varadachari also contended that even if there is nothing personal in the contract still the offeree only can accept an offer. This proposition is true of mere offers."
19. In the case of Sakalaguna Nayudu and another v. Chinna Munuswami Nayakar (Supra), it is held that, "They are also of the opinion that it was not intended that the option could be exercised only by Venkata Subrahmanya and Krishnasami personally. The terms of the contract and the time at which the option was to be exercised go to show that the intention was that the option might be exercised by the above- mentioned two persons or their heirs". It is further held that, "It was not disputed that if the transaction of January 27, 1891, amounted to a completed contract, as their Lordships have decided, the benefit of the contract could be assigned."
20. In the case of Vishweshwar Narsabhatta Gaddada v. Durgappa Irappa Bhatkar and Another (Supra), it is observed that, "Section 23 (b) of the Specific Relief Act provides that the specific performance of a contract may be obtained by any party thereto or by the representative in interest, or the principal, of any party thereto: provided that, where the Page 36 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 learning, skill, solvency or any personal quality of such party is a material ingredient in the contract, or where the contract provides that his interest shall not be assigned, his representative in interest or his principal shall not be entitled to specific performance of the contract, unless where his part thereof has already been performed."
It is further observed that, "There can be no doubt that both under the common law and under S.23 (b) of the Specific Relief Act an option to repurchase property is prima facie assignable, though it may be so worded as to show that it was to be personal to the grantee and not assignable. Under S. 23 (b) of the Specific Relief Act, 1877, it is provided that the specific performance of a contract may be obtained by the representative in interest, or the principal, of any party thereto: provided that, where the learning, skill, solvency or any personal quality of such party is a material ingredient in the contract, or where the contract provides that his interest shall not be assigned, his representative in interest or his principal shall not be entitled to specific performance of the contract, unless where his part thereof has already been performed".
It is further observed that, "In my view, the reasoning of the learned Judges in Vitkoba Madhav v. Madhav Damadar cannot be supported on principle, and I think also that it is inconsistent with the decision of the Privy Council in Sakalaguna Nayudu v. Chinna Munuswami Nayakar. In that case the property in suit was a village, and on the sale of the village an option had been given to the vendor to repurchase Page 37 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 within a period of thirty years. The option had been assigned to the plaintiff, and the Privy Council, confirming the decision of the High Court of Madras, held that the option was assignable".
21. In the case of Budda Adeyyamma v. Kandregula Simhachalam & Ors. (Supra), it is observed in Paras-14, 15 and 17 as under:
"14. This legal position is also examined by the Suprme Court in Habiba Khatoon v. Ubaidul Huq AIR 1997 SC 3326 holding that normally any interest in a contract could be assigned to any representative-in-interest who also can enforce the specific performance of the contract against the contracting party. However, if the terms of the contract, expressly or by necessary implication, prohibited the beneficiary from tranferring his contractual interest to third parties, then only such an assignee cannot sue for specific performance."
15. In the present case, terms of Ex.A.1 indisputably recognise that the seventh defendant is entitled to obtain the benefit of the said agreement namely the sale deed, in her name or in the name of her nominee/ nominees/ transferees whatsoever. Clause 1 of Ex.A.1 specifically permits and recognised that the beneficiary i.e. the seventh defendant may obtain the sale deed in her name or in the name of her transferee or nominee. Section 15 of the Act also permits such transfer unless the nature of the contract as such falls within the proviso to clause (b)...."
17. A look at the above exposition of law clealry envisages tha the rights under a contract are assignable unless the contract is personal in its nature or rights are incapable of assignment either under the law or under an agreement between the parties. In the present case, clause 2 of Ex.A.1 itslef shows that the Page 38 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 agreement is assignable and even otherwise Ex.A.1 agreement cannot be said to be agreement, which is personal in its nature and it cannot be said that there is any prohibition for such transfer."
22. In the case of Dahiben v. Arvindbhai Kalyanji Bhanushali & Others (Supra), the para-29.8 reads as under:
"29.8 In Vidyadhar v. Manikrao & Anr.14 this Court held that the words "price paid or promised or part paid and part promised"
indicates that actual payment of the whole of the price at the time of the execution of the Sale Deed is not a sine qua non for completion of the sale. Even if the whole of the price is not paid, but the document is executed, and thereafter registered, the sale would be complete, and the title would pass on to the transferee under the transaction. The non-payment of a part of the sale price would not affect the validity of the sale. Once the title in the property has already passed, even if the balance sale consideration is not paid, the sale could not be invalidated on this ground. In order to constitute a "sale", the parties must intend to transfer the ownership of the property, on the agreement to pay the price either in praesenti, or in future. The intention is to be gathered from the recitals of the sale deed, the conduct of the parties, and the evidence on record".
23. In the case of Shriram Surajmal v. Shri Ram Zunzunwala (Supra), it is observed that, "under the provisions of Order VIII, Rule 5, of the Civil Procedure Code every allegation in the plaint, if not denied specifically or by necessary implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted, except as against a person Page 39 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 under disability. This rule applied in all cases irrespective of the fact whether a defendant has put in a pleading or not."
24. In the case of Maheshbhai Jivrajbhai Gujarati v. Krishna Pravinbhai Gujarati, it is observed that, "when parties in the present case provided that the sale-deed shall be executed when the title to the said land becomes clear and marketable and when the land of final plot is allocated under the Town Planning Scheme, they were dealing with the mode of performance and not the question of the very obligation of performance. Hence, the contract could be said to be absolute one and not just contingent -it carried an absolute obligation and it was not conditioned or contingent upon the title to the said land becoming clear and marketable and the final plot being allocated under the Town Planning Scheme."
25. In the case of Ambalal Sarabhai Enterprise Ltd. v. Infraspace LLP Ltd. (Supra), the Apex Court has observed in Paras-2 to 7, 12 to 15 and 18 t0 21, 23 and 24 as under:
"2. The plaintiff filed the two suits for declaration and specific performance against the defendant sister concerns with regard to a total area of 19,685 square meters of lands situated in Village Wadiwadi, Subhanpura, District Vadodara in Gujarat. The plaintiff contended that there existed a concluded contract with the defendants after negotiations for sale of the suit lands for a total sum of Rs.31,81,73,076/- and 58,26,86,984/- respectively. The plaintiff had duly communicated its acceptance of the final draft memorandum of understanding (MoU) dated 30.03.2018. Only the formal execution of contract documents remained as a formality. A sum of Rs.2.16 crores had also been paid as advance.Page 40 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022
C/AO/130/2020 JUDGMENT DATED: 27/04/2022 The plaintiff was ready and willing with the balance amount. Alternately, it was claimed that there existed a concluded oral contract between the parties. The Defendants had surreptitiously entered into a registered agreement for sale with defendant no.2 on 31.03.2018 and thus the suit and prayer for injunction.
3. The Principal Civil Judge by order dated 18.02.2019 held that by inference the terms and conditions for sale stood finalised by the email dated 29.03.2018 and 30.03.2018. A token amount of Rs.2.16 crores had already been paid and the plaintiff was ready and willing with the balance amount. Creation of third party rights would lead to further litigation. Thus by an order of temporary injunction the defendants were restrained from executing any further documents including a sale deed or creating further charge, interest or deal with the suit lands in any manner.
4. The High Court by its order dated 30.08.2019 affirmed the order of injunction holding that the communication of acceptance to the draft MoU sent by e-mail dated 30.03.2018 coupled with the exchange of WhatsApp correspondences between the parties amounted to a concluded contract.
5. We have heard learned senior counsel Shri Kapil Sibal, Shri C.U. Singh and Shri Huzefa Ahmadi, appearing on behalf of defendant nos. 1 and 2, who are the appellants before us. Shri Sibal, making the lead arguments on behalf of the defendant sister concerns submitted that they had decided to sell the lands in view of financial stringency and their inability to meet financial commitments inter-alia leading to attachment of immovable properties by the Income Tax Department for dues of Rs.48,74,45,929/- apart from other statutory liabilities, employee related liabilities and business liabilities. The negotiations with the plaintiff did not attain finality but remained at the stage of discussions only. The wavering conduct of the plaintiff to meet the Income Tax liability of the defendants as part of the Page 41 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 consideration amount to facilitate sale by lifting of the attachment, left the defendants with no other choice but to negotiate afresh with defendant no.2. The contention that execution of the agreement remained a formality was disputed. This is evident from the alternative contention in the suit that there existed an oral contract.
6. The plaintiff's response of acceptance to the final draft MoU dated 30.03.2018 was belated. The plaintiff was well aware all along that the defendants were negotiating with two others also apart from it. The plaintiff knew before 30.03.2018 that the deal with it was not coming through and that the defendant was going ahead with another. The deal with defendant no.2 was finalised by execution of a registered agreement for sale on 31.03.2018 after defendant no.2 had cleared the Income Tax dues of the sister concerns on 30.03.2018 to the extent of Rs.17.69 crores and Rs.2.20 crores respectively enabling lifting of the attachment orders for the lands by the Income Tax department on 26.04.2018 followed by further payments by defendant no.2 aggregating Rs.45.84 crores till 16.01.2019. A sum of Rs. 36.20 crores, from the sale proceeds has already been utilized by the defendants towards payment of other statutory liabilities and employee related liabilities etc. It was therefore a bona fide action. The plaintiff's email of acceptance of the draft MoU dated 30.03.2018 as claimed, was not sent by it on 31.03.2018 at 07.43 AM but was received by the defendant on 31.03.2018 at 01.13 PM.
7. Despite the full awareness and knowledge as far back as 30.03.2018 and refund through RTGS of Rs.2.16 crores on 31.03.2018 itself, the plaintiff published a public notice only on 03.04.2018 advising all concerned not to deal with the property which was duly replied and refuted by another public notice dated 04.04.2018 published by the defendants. The cause of action in the suit is based on the email dated 30.03.2018 coupled Page 42 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 with the public notice dated 03.04.2018. Acknowledging the refund also on 31.03.2018, it admits the signing of a registered agreement for sale with defendant no.2 on 31.03.2018 but does not make even a whisper of a suggestion why the suit was filed more than 7 months later. In commercial dealings with high stake matters delay is vital.
12. Dr. Singhvi framed the question, whether concurrent findings of the Special Civil Judge and the High Court by two detailed well considered orders were such as to warrant interference so as to dissipate the substratum of the suit. In support of his submissions, Dr. Singhvi relied on Wander Ltd. and another vs. Antox India P. Ltd., 1990 Suppl. SCC 727, Brij Mohan and others vs. Sugra Begum and ors., (1990) 4 SCC 147, Motilal Jain vs. Ramdasi Devi (Smt.) and ors., (2000) 6 SCC 420, Moharwal Khewaji Trust (Regd.), Faridkot vs. Baldev Dass, (2004) 8 SCC 488, and Aloka Bose vs. Parmatma Devi and ors., (2009) 2 SCC
582.
13. On the aspect of the delay in institution of the suit, relying on Mademsetty Satyanarayana vs. G. Yelloji Rao and ors., 1965 (2) SCR 221, it was submitted that the delay did not induce the defendant to do anything further than that already done earlier, to their prejudice. In any event the plaintiff is ready and willing to pay to the defendant no.2 the amount of the Income Tax dues paid by it and proceed with the contract with the defendant sister concerns.
14. We have been addressed by the counsel for the parties at length, as also have been taken through the several WhatsApp messages and e-mails exchanged. We have also considered the respective submissions. Litigation at the initial stage of injunction, where the claims of the parties are still at a nebulous stage, has stalled the progress of the suit. We are of the considered opinion that at this stage we ought to refrain from returning findings of facts or express any opinion on the merits of Page 43 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 the suit, except to the extent necessary for purposes of the present order, so as not to prejudice either party in the suit.
15. Chapter VII, Section 36 of the Specific Relief Act, 1963 (hereinafter referred to as 'the Act') provides for grant of preventive relief. Section 37 provides that temporary injunction in a suit shall be regulated by the Code of Civil Procedure. The grant of relief in a suit for specific performance is itself a discretionary remedy. A plaintiff seeking temporary injunction in a suit for specific performance will therefore have to establish a strong prima-facie case on basis of undisputed facts. The conduct of the plaintiff will also be a very relevant consideration for purposes of injunction. The discretion at this stage has to be exercised judiciously and not arbitrarily. This specific objection on behalf of the defendant taken before the High Court relying on K.S. Vidyanadam & ors. vs. Vairavan, 1997 (3) SCC 1, has been noticed at paragraph 37 of the judgment but does not find any consideration.
18. The pleadings in the suit acknowledge the awareness of the plaintiff of the ongoing negotiations with defendant no.2. The advance of Rs.2.16 crores was refunded to the plaintiff in the evening on 31.03.2018 by RTGS. No effort was made by the plaintiff to again remit the sum by RTGS immediately or the next day. Only a public notice was published on 03.04.2018 refuted by the defendant on 04.03.2018. The suit was then filed seven months later on 01.10.2018. The explanation that the plaintiff waited hopefully for a solution outside litigation as a prudent businessman before finally instituting the suit is too lame an excuse to merit any consideration.
19. In a matter concerning grant of injunction, apart from the existence of a prima facie case, balance of convenience, irreparable injury, the conduct of the party seeking the equitable relief of injunction is also very essential to be considered as observed in Motilal Jain (supra) holding as follows :
Page 44 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022C/AO/130/2020 JUDGMENT DATED: 27/04/2022 "6. The first ground which the High Court took note of is the delay in filing the suit. It may be apt to bear in mind the following aspects of delay which are relevant in a case of specific performance of contract for sale of immovable property:
(i) delay running beyond the period prescribed under the Limitation Act;
(ii) delay in cases where though the suit is within the period of limitation, yet:
(a) due to delay the third parties have acquired rights in the subject-matter of the suit;
(b) in the facts and circumstances of the case, delay may give rise to plea of waiver or otherwise it will be inequitable to grant a discretionary relief."
20. The defendant no.2, in addition to the dues of the Income Tax department as aforesaid, made further payments to the defendant of Rs.25,44,57,769/- by 16.01.2019 aggregating to a total payment of Rs.45,84,71,869/-. The defendants had also proceeded to utilize a sum of Rs.36.20 crores also and had therefore materially altered their position evidently by the inaction of the plaintiff to institute the suit in time and having allowed third party rights to accrue by making substantial investments. In Madamsetty (supra) it was observed :
"11.....It is not possible or desirable to lay down the circumstances under which a court can exercise its discretion against the plaintiff. But they must be such that the representation by conduct or neglect of the plaintiff is directly responsible in inducing the defendant to change his position to his prejudice or such as to bring about a Page 45 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 situation when it would be inequitable to give him such a relief."
Similar view has been expressed in Mandali Ranganna (supra).
21. We are therefore of the considered opinion that in the facts and circumstances of the present case, and the nature of the materials placed before us at this stage, whether there existed a concluded contract between the parties or not, is itself a matter for trial to be decided on basis of the evidence that may be led. If the plaintiff contended a concluded contract and/or an oral contract by inference, leaving an executed document as a mere formality, the onus lay on the plaintiff to demonstrate that the parties were ad- idem having discharged their obligations as observed in Brij Mohan (supra). The plaintiff failed to do show the same on admitted facts. The draft MoU dated 30.03.2018 in Clause C contemplated payment of the income tax dues of Rs.18.64 crores as part of the consideration amount only whereafter the agreement was to be signed relating back to the date 29.03.2008. Had this amount been already paid or remitted by the plaintiff, entirely different considerations would have arisen with regard to the requirement for execution of a written agreement remaining a mere formality. Needless to state the balance of convenience is in favour of the defendants on account of the intervening developments, without furthermore, inter-alia by reason of the plaintiff having waited for seven months to institute the suit. The question of irreparable harm to a party complaining of a breach of contract does not arise if other remedies are available to the party complaining of the breach. The High Court has itself observed that from the negotiations between the parties that "some rough weather was being reflected between the plaintiff and the defendant ..........". The Special Civil Judge failed to address the issue of delay. The High Page 46 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 Court noticed the arguments of the defendants with regard to delay in the institution of the suit but failed to deal with it.
23. Wander Ltd. (supra) prescribes a rule of prudence only. Much will depend on the facts of a case. It fell for consideration again in Gujarat Bottling Co. Ltd. vs. Coca Cola Co., (1995) 5 SCC 545, observing as follows :
"47....Under Order 39 of the Code of Civil Procedure, jurisdiction of the Court to interfere with an order of interlocutory or temporary injunction is purely equitable and, therefore, the Court, on being approached, will, apart from other considerations, also look to the conduct of the party invoking the jurisdiction of the Court, and may refuse to interfere unless his conduct was free from blame. Since the relief is wholly equitable in nature, the party invoking the jurisdiction of the Court has to show that he himself was not at fault and that he himself was not responsible for bringing about the state of things complained of and that he was not unfair or inequitable in his dealings with the party against whom he was seeking relief. His conduct should be fair and honest...."
24. The aforesaid discussion leaves us satisfied to conclude that in the facts and circumstances of the present case, the grant of injunction to the plaintiff is unsustainable. Resultantly the orders of injunction are set aside. Nothing in the present order shall be deemed or construed as any expression of opinion or observation by us at the final hearing of the suit which naturally will have to be decided on its own merits. The High Court has already given directions to expedite the hearing of the suit and we reiterate the same.
26. In the case of Kishorsinh Ratansinh Jadeja v. Maruti Corporation (Supra), the Apex Court has observed as under:
Page 47 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022C/AO/130/2020 JUDGMENT DATED: 27/04/2022 "19. In addition to the above, Mr. Ranjit Kumar also referred to the decision of this Court in Mandali Ranganna & others vs. T. Ramachandra [(2008) 11 SCC 1] wherein an additional principle was sought to be enunciated relating to grant of injunction by way of an equitable relief. This Court held that in addition to the three basic principles, a Court while granting injunction must also take into consideration the conduct of the parties. It was observed that a person who had kept quiet for a long time and allowed others to deal with the property exclusively would not be entitled to an order of injunction. The Court should not interfere only because the property is a very valuable one. Grant or refusal of injunction has serious consequences depending upon the nature thereof and in dealing with such matters the Court must make all endeavours to protect the interest of the parties.
39. As far as the lands which the appellant and the other joint owners have been restrained from alienating by the second order dated 22nd April, 2008, are concerned, we are of the view that in the event the order of 22nd April, 2008, is set aside, the Respondent No.1 can be compensated in terms of money and no irreparable loss and injury will be caused to it on account thereof.
40. On the other hand, if the owners of the property remain restrained from developing the same, it is they, who will suffer severe prejudice, as they will be deprived of the benefit of the user of their land during the said period. The balance of convenience and inconvenience is against grant of such injunction. The success of the suit for specific performance filed by the Respondent No.1 depends to a large extent on tenuous proof of genuineness of the agreement sought to be enforced after 19 years, despite the finding of the Trial Court that the suit was not barred by limitation.
Page 48 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022C/AO/130/2020 JUDGMENT DATED: 27/04/2022
41. The question of conduct of the Respondent No.1 also becomes relevant, inasmuch as, having slept over its rights for more than 19 years, it will be inequitable on its prayer to restrain the owners of the property from dealing with the same, having particular regard to the fact that a large portion of the land has already been conveyed to as many as 280 purchasers who are in the process of erecting constructions thereupon".
27. In the case of Mandali Ranganna v. T. Ramachandra (Supra), it has been held in Para-26 & 27 as under:
"26. Rightly or wrongly constructions have come up. They cannot be directed to be demolished, at least at this stage. Respondent No. 7 is said to have spent three crores of rupees. If that be so, in our opinion, it would not be proper to stop further constructions.
27. We, therefore, are of the opinion that the interest of justice would be subserved if while allowing the respondents to carry out constructions of the buildings, the same is made subject to the ultimate decision of the suit. The Trial Court is requested to hear out and dispose of the suit as early as possible. If any third party interest is created upon completion of the constructions, the deeds in question shall clearly stipulate that the matter is subjudice and all sales shall be subject to the ultimate decision of the suit. All parties must cooperate in the early hearing and disposal of the suit. Respondents must also furnish sufficient security before the learned Trial Judge within four weeks from the date which, for the time being, is assessed at Rupees One Crore".
28. In case of Harshadkumar Kantilal Bhalodwala v. Ishwarbhai Chandubhai Patel (Supra), paras 6 and 7 read as under:
Page 49 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022C/AO/130/2020 JUDGMENT DATED: 27/04/2022 "6. Heard the learned Advocates appearing on behalf of the respective parties at length. At the outset, it is required to be noted that the respondent No. 1-original plaintiff has instituted the suit for cancellation of registered sale-deed dated 15-5-2007 executed by the original defendant Nos. 1 and 2 (original owners) in favour of the original defendant Nos. 3 and 4 (appellants herein). He has also filed suit for specific performance of the agreement to sell dated 16-1-2006 (20-1-2006) alleged to have been executed by the original defendant Nos. 1 and 2. It is the contention on behalf of the appellants that he has paid Rs. 4,50,000/- by way of part sale consideration to the defendant Nos. 1 and 2 at the time of execution of alleged agreement to sell dated 16-1-2006. It is to be noted that the original defendant Nos. 1 and 2 have specifically disputed the execution of the agreement to sell dated 16-1-2006 as well as receipt of Rs. 4,50,000/- alleged to have been paid by cash. Therefore, once the execution of the agreement to sell is disputed and even the receipt of the part sale consideration which is alleged to have been paid by cash is disputed, in that case, initial burden to prima facie prove such payment which is alleged to have been paid by cash is upon the plaintiff who asserts that the said amount is paid by him. As held by the learned Single Judge in the case of Khimjibhai Harjivanbhai Patadia (supra) when the factum of payment of part sale consideration which has been alleged to have been paid by cash is seriously disputed in that case, the plaintiff is required to produce some evidence to show that whether he has withdrawn the said amount from any Bank account or he has borrowed from any one. In the present case, the plaintiff has not produced anything to show that while making the payment of Rs. 4,50,000/- as alleged, he has withdrawn the said amount from any Bank account or he has Page 50 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 borrowed the money from any one. Learned Advocate for the original plaintiff is not in a position to point out any corresponding documentary evidence in the form of income tax return or the Bank passbook etc. Therefore, the original plaintiffs has prima facie failed to prove and/or establish the payment of Rs. 4,50,000/- by way of part sale consideration.
7. On considering the impugned order passed by the learned trial Court allowing application Exh. 5, it appears that solely relying upon the alleged agreement to sell dated 16-1-2006/20-1-2006, which is specifically disputed by the executant, learned Judge has held that there is a prima facie case in favour of the plaintiffs, and accordingly, observed that the balance of convenience as well as irreparable loss would be in favour of the original plaintiffs. It is to be noted that original defendant Nos. 3 and 4 have purchased the property by registered sale-deed after the original land-owners gave public notice in the local newspaper intending to sell the land in question and when no objections were submitted by anybody inclusive of the plaintiffs, the original defendant Nos. 3 and 4 have purchased the property on payment of full sale consideration. Under the circumstances, it can be said that the original defendant Nos. 3 and 4 are the bona fide purchasers of the land in question on payment of full sale consideration. In view of such a situation, the balance of convenience can be said to be in favour of bona fide purchaser i.e. defendant Nos. 3 and 4. Nothing is on record that original plaintiffs had submitted any objection pursuant to the public notice/advertisement in the local newspaper given by the original land-owners intending to sell the land in question. Under the circumstances, the learned trial Court has materially erred in holding the prima facie case as well as the balance of convenience in favour of the original plaintiffs. As such on Page 51 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 considering the entire order passed by the learned trial Court, the learned Judge has not assigned any reason how the balance of convenience would be in favour of the original plaintiffs. As stated above, solely relying upon the alleged agreement to sell dated 16-1-2006 (20-1-2006), which has been seriously disputed, the learned Judge has observed that there is a prima facie case and balance of convenience in favour of the plaintiffs. It cannot be disputed that while considering the application for injunction under Order 39, Rules 1 and 2 Code of Civil Procedure, Court is required to consider the three aspects i.e. (i) prima facie case, (ii) balance of convenience (iii) irreparable loss in terms money if the injunction as prayed for is not granted. While granting the injunction all the three aforesaid conditions are to be satisfied. Even if there is prima facie case in favour of the plaintiffs but the balance of convenience is not in favour of plaintiffs and/or if it is found that the plaintiff can be compensated in terms of money even if the injunction is not granted, the Court may not grant even interim injunction. In the present case, the learned Judge has not considered the aforesaid aspects more particularly, with respect to balance of convenience and the irreparable loss in terms of money if the interim injunction as prayed is not granted".
29. In the case of Ramnikbhai Vajubhai Kyada v. Bhupatbhai Labjibhai Thumar (Supra), it is held in paras-8 and 9 as under:
"8. In the case on hand, the execution of the agreement to sell is disputed and even the receipt of part sale consideration which is alleged to have been paid by cash is also disputed. In that case, initially, burden to prima facie prove such payment, which is alleged to have been made by cash, is upon the appellant, who Page 52 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 asserts that the said payment is made by him. When the factum of payment of part sale consideration, which has been alleged to have been made by cash is seriously disputed in the case, the appellant is required to produce reliable and cogent evidence to show whether he has withdrawn the said amount from any bank account or he has borrowed from anyone. In the present case, the appellant has not produced anything to show that while making the payment of Rs.5 lac, as alleged, he has withdrawn the said amount from any bank account or borrowed from anyone. Learned advocate for the appellant is not in a position to point out any corresponding documentary evidence in form of IT return or bank passbook or any other pieces of evidence. Therefore, the Court has no hesitation to say that the appellant has prima facie failed to prove and/or establish the payment of Rs.5 lac by way of part sale consideration.
9. Considering the impugned order passed by the learned trial Judge, it appears that both the estate brokers have denied the execution of so called agreement dated 9.2.2011 in their presence and also denied the payment of part consideration by the appellant to the respondent Nos.1 and 2 in their presence. So, in Court's considered opinion, the appellant has failed to prove his prima facie case. If any injunction pending hearing of the suit is granted, then the respondent Nos.1 and 2 would be put into irreparable loss and therefore, the learned trial Judge has rightly dismissed the injunction application."
30. In the case of Yanala Malleshwari W/o. Y. Yadagiri Reddy v. Smt. Ananthula Sayamma W/o. Late Gopaiah (Supra), it is observed in Para-63 and 67 as under:
Page 53 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022C/AO/130/2020 JUDGMENT DATED: 27/04/2022 "63. When a document is registered at the instance of a person not duly empowered to present the same, any person claiming under the document, may within four months from the date of knowledge that such document is invalid, may present such document in accordance with the provisions of Part VI (Sections 32 to 35) of the Registration Act. In such event, registering officer after following the same procedure contemplated under the Act, can re-register the document as if it has not been registered previously. Thus, it is not possible to accept the submission of the learned Counsel for petitioners that the registering officer ought to have rejected the documents submitted for cancellation of the sale deeds.
67. Therefore, when the provisions of the Registration Act and Registration Rules elaborately deal with the circumstances and situations when the registering officer has to accept and register the documents, and/or as to when registering officer has to reject the documents for registration, it is not possible to hold as a general rule that whenever a cancellation deed is submitted, the registering officer is bound to reject the acceptance and registration of the same. Such interpretation would render Section 126 of TP Act (which enables the donor of a gift to cancel/revoke the same) ineffective. Secondly, there could be unimaginable number of circumstances when the executant himself on his own volition comes before the registering officer and desires to cancel the earlier document. As already pointed out supra, under Section 23A of the Registration Act, the registering officer can reregister a document totally ignoring the earlier registration. Furthermore, under Schedule 1A to the Indian Stamp Act as amended by the Stamp (A.P. Amendment) Act, 1922, cancellation deed is one of the legal documents Page 54 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 recognized in law and a transaction for transfer of immovable property, is no exception".
31. In the case of Thota Ganga Laxmi v. State of Andhra Pradesh (Supra), the Paras 1, 4 , 5 and 6 read as under:
"1. Heard the learned counsel for the appearing parties. This appeal has been filed against the impugned order of the Andhra Pradesh High court dated 8-11-2006 passed in Thota Ganga Laxmi v. Govt. Of A.P. whereby the High Court has dismissed the writ petition relying upon a Full Bench judgment of the same High Court in Yanala Malleshwari v. Ananthula Sayamma.
4. In our opinion, there was no need for the appellants to approach the civil court as the said cancellation deed dated 4-8- 2005 as well as registration of the same was wholly void and non est and can be ignored altogether. For illustration, if A transfers a piece of land to B by a registered sale deed, then, if it is not disputed that A had the title to the land, that title passes to B on the registration of the sale deed (retrospectively from the date of the execution of the same) and B then becomes the owner of the land. If A wants to subsequently get that sale deed cancelled, he has to file a civil suit for cancellation or else can request B to sell the land back to A but by no stretch of imagination, can a cancellation deed be executed or registered. This is unheard of in law.
5. In this connection, we may also refer to Rule 26(k)(i) relating to Andhra Pradesh under Section 69 of the Registration Act, 1908 which states:
"(i) The registering officer shall ensure at the time of presentation for Registrationof cancellation deeds of previously registered deed of conveyances on sale before Page 55 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 him that such cancellation deeds are executed by all executant and claimant parties to the previously registered conveyance on sale and that such cancellation deed is accompanied Civil orHigh Court or State or Central Government annulling the transaction contained in the previously registered deed of conveyance on sale.
Provided that the registering officer shall dispense with the execution of cancellation deeds by executant and claimant parties to the previously registered deeds of conveyances on sale before him if the cancellation deed is executed by a Civil Judge or a Government Officer competent to execute Government orders declaring the properties contained in the previously registered conveyance on sale to be Government or Assigned or Endowment lands or properties not registerable by any provision of law".
A reading of the above Rule also supports the observations we have made above. It is only when a sale deed is cancelled by a competent Court that the cancellation deed can be registered and that too after notice to the parties concerned. In this case, neither is there any declaration by a competent court nor wass there any notice to the parties. Hence, this Rule also makes it clear that both the cancellation deed as well as registration thereof were wholly void and non est and meaningless transactions.
6. The appeal is disposed of with the above observations. The impugned judgment is set aside. No order as to costs."
32. In the case of Satya Pal Anand v. State of Madhya Pradesh (Supra), paras 1 to 5, 23.1 to 23.6 and Paras 42 to 48 are as Page 56 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 under:
"1. This appeal has been placed before a three Judges' Bench in terms of order dated August 25, 2015, consequent to the difference of opinion between the two learned Judges of the Division Bench.
2. Justice Dipak Misra took the view that, in the fact situation of the present case the Writ Petition filed by the appellant challenging the order passed by the Sub-Registrar (Registration) and the Inspector General (Registration) was rightly dismissed by the High Court. However, His Lordship opined that a question would still arise for consideration, namely, whether in absence of any specific Rule in the State of Madhya Pradesh, the general principle laid down in the case of Thota Ganga Laxmi & Anr. vs. Government of Andhra Pradesh & Ors. would be applicable?
3. Justice V.Gopala Gowda on the other hand allowed the appeal on the finding that the Sub-Registrar (Registration) had no authority to register the Extinguishment Deed presented by the respondent-Society dated 9th August 2001 and his action of registration of that document was void ab initio. For the same reason, the subsequent deeds in respect of the property in question registered by the Sub-Registrar dated 21st April, 2004 and 11th July 2006 were also without authority and void ab initio. His Lordship held that, the High Court should have declared the above position and set aside registration of the subject documents and also the orders passed by the Sub- Registrar (Registration) and Inspector General (Registration). His Lordship allowed the appeal filed by the appellant with compensation amount to be paid by the respondents quantified at Rs.10 Lakh.
4. Briefly stated, Plot No.7-B at Punjabi Bagh, Raisen Road, Bhopal was allotted to the appellant's mother Smt. Veeravali Anand by Punjabi Housing Cooperative Society Ltd. (hereinafter Page 57 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 referred to as the "Society"), vide a registered deed dated 22nd March 1962. Smt. Veeravali Anand expired on 12th June 1988. After her death, the Society through its Office Bearer executed a Deed of Extinguishment on 9th August 2001, unilaterally, cancelling the said allotment of plot to Smt. Veeravali Anand because of violation of the Bye-laws of the Society in not raising any construction on the plot so allotted within time. On the basis of the said Extinguishment Deed, the Society executed and got registered a deed dated 21st April, 2004 in favour of Mrs. Manjit Kaur (Respondent No.5) in respect of the same plot. The appellant objected to the said transaction. However, a compromise deed was executed between the Society and Mrs. Manjit Kaur (Respondent No.5) on the one hand and the appellant on the other hand - whereunder the appellant received consideration of Rs.6.50 Lakh (Rupees Six Lakh Fifty Thousand) - Rs.4.50 Lakh (Rupees Four Lakh Fifty Thousand) by a demand draft and Rs.2/- Lakh by a post-dated cheque).
5. Notwithstanding the compromise deed, the appellant filed a dispute under Section 64 of the Madhya Pradesh Cooperative Societies Act, 1960 (hereinafter referred to as the "Act of 1960"), before the Deputy Registrar, Cooperative Societies bearing Dispute No. 81 of 2005. The appellant challenged the Society's action of unilaterally registering the Extinguishment Deed dated 9th August 2001 and allotting the subject plot to Mrs Manjit Kaur vide deed dated 21st April, 2004; and prayed for a declaration that he continues to be the owner of the subject plot allotted by the Society to his mother, having inherited the same. In the said dispute, the appellant filed interim applications praying for restraint order and for appointment of a Receiver. It is not necessary to dilate on those facts to consider the issues on hand. Suffice it to note that the said dispute is still pending adjudication".
"23. Having considered the rival submissions, including keeping in Page 58 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 mind the view taken by the two learned Judges of this Court on the matters in issue, in our opinion, the questions to be answered by us in the fact situation of the present case, can be formulated as under:
23.1 (a) Whether in the fact situation of the present case, the High Court was justified in dismissing the Writ Petition?
23.2 (b) Whether the High Court in exercise of writ jurisdiction under Article 226 of the Constitution of India is duty bound to declare the registered Deeds (between the private parties) as void ab initio and to cancel the same, especially when the aggrieved party (appellant) has already resorted to an alternative efficacious remedy under Section 64 of the Act of 1960 before the competent Forum whilst questioning the action of the Society in cancelling the allotment of the subject plot in favour of the original allottee and unilateral execution of an Extinguishment Deed for that purpose?
23.3 (c) Even if the High Court is endowed with a wide power including to examine the validity of the registered Extinguishment Deed and the subsequent registered deeds, should it foreclose the issues which involve disputed questions of fact and germane for adjudication by the competent Forum under the Act of 1960?
23.4 (d) Whether the Sub-Registrar (Registration) has authority to cancel the registration of any document including an Extinguishment Deed after it is registered? Similarly, whether the Inspector General (Registration) can cancel the registration of Extinguishment Deed in exercise of powers under Section 69 of the Act of 1908?
23.5 (e) Whether the Sub-Registrar (Registration) had no authority to register the Extinguishment Deed dated 9th August 2001, unilaterally presented by the Respondent Society for registration?Page 59 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022
C/AO/130/2020 JUDGMENT DATED: 27/04/2022 23.6 (f) Whether the dictum in the case of Thota Ganga Laxmi (supra) is with reference to the express statutory Rule framed by the State of Andhra Pradesh or is a general proposition of law applicable even to the State of Madhya Pradesh, in absence of an express provision in that regard?"
"42. In absence of any express provision in the Act of 1908 mandating the presence of the other party to the Extinguishment Deed at the time of presentation for registration, by no stretch of imagination, such a requirement can be considered as mandatory. The decision in the case of Thota Ganga Laxmi (supra) is with reference to an express provision contained in the Andhra Pradesh Rules in that behalf. That Rule was framed by the State of Andhra Pradesh after the decision of Full Bench of the High Court. Therefore, the dictum in this decision cannot have universal application to all the States (other than State of Andhra Pradesh). It is apposite to reproduce paragraphs 4 and 5 of the said judgment which read thus:
"4. In our opinion, there was no need for the Appellants to approach the civil Court as the said cancellation deed dated 4.8.2005 as well as registration of the same was wholly void and non est and can be ignored altogether. For illustration, if 'A' transfers a piece of land to 'B' by a registered sale deed, then, if it is not disputed that 'A' had
-the title to the land, that title passes to 'B' on the registration of the sale deed (retrospectively from the date of the execution of the same) and 'B' then becomes the owner of the land. If 'A' wants to subsequently get the sale deed cancelled, he has to file a civil suit for cancellation or else he can request 'B' to sell the land back to 'A' but by no stretch of imagination, can a cancellation deed be executed or registered. This is unheard of in law.Page 60 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022
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43. In this connection, we may also refer to Rule 26(i)(k) relating to Andhra Pradesh under Section 69 of the Registration Act, which states:
"26.(k)(i) The registering officer shall ensure at the time of preparation for registration of cancellation deeds of previously registered deed of conveyances on sale before him that such cancellation deeds are executed by all the executant and claimant parties to the previously registered conveyance on sale and that such cancellation deed is accompanied by a declaration showing natural consent or orders of a competent civil or High Court or State or Central Government annulling the transaction contained in the previously registered deed of conveyance on sale:
Provided that the registering officer shall dispense with the execution of cancellation deeds by executant and claimant parties to the previously registered deeds of conveyances on sale before him if the cancellation deed is executed by a Civil Judge or a Government Officer competent to execute Government orders declaring the properties contained in the previously registered conveyance on sale to be Government or Assigned or Endowment lands or properties not register able by any provision of law.
A reading of the above rule also supports the observations we have made above. It is only when a sale deed is cancelled by a competent Court that the cancellation deed can be registered and that too after notice to the concerned parties. In this case, neither is there any declaration by a competent Court nor was there any notice to the parties. Hence, this rule also makes it clear that both the cancellation deed as well as registration thereof were wholly void and non est and meaningless transactions."Page 61 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022
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43. No provision in the State of Madhya Pradesh enactment or the Rules framed under Section 69 of the Act of 1908 has been brought to our notice which is similar to the provision in Rule 26(k)(i) of the Andhra Pradesh Registration Rules framed in exercise of power under Section 69 of the Act of 1908. That being a procedural matter must be expressly provided in the Act or the Rules applicable to the concerned State. In absence of such an express provision, the registration of Extinguishment Deed in question cannot be labelled as fraudulent or nullity in law. As aforesaid, there is nothing in Section 34 of the Act of 1908 which obligates appearance of the other party at the time of presentation of Extinguishment Deed for registration, so as to declare that such registration of document to be null and void. The error of the Registering Officer, if any, must be regarded as error of procedure. Section 87 of the Act of 1908 postulates that nothing done in good faith by the Registering Officer pursuant to the Act, shall be deemed invalid merely by reason of any defect in the procedure. In the present case, the subject Extinguishment Deed was presented by the person duly authorized by the Society and was registered by the Registering Officer. Once the document is registered, it is not open to any Authority, under the Act of 1908 to cancel the registration. The remedy of appeal provided under the Act of 1908, in Part XII, in particular Section 72, is limited to the inaction or refusal by the Registering Officer to register a document. The power conferred on the Registrar by virtue of Section 68 cannot be invoked to cancel the registration of documents already registered.
44. In the dissenting opinion, reference has been made to the decision of the Division Bench of the Madras High Court in the case of E.R. Kalaivan (supra). It was a case where the Registering Officer refused to register the deed of cancellation presented before him on the ground that the cancellation deed was sought to be registered without there being a consent from the Page 62 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 purchaser. The aggrieved person approached the Inspector General of Registration who in turn issued a circular dated 5.10.2007 addressed to all the Registering Officers in the State, that the deed of cancellation should bear the signatures of both the vendor and the purchaser. The validity of this circular was challenged by way of Writ Petition before the High Court. In the present case, our attention has neither been invited to any express provision in the Act of 1908, Rules framed by the State of Madhya Pradesh nor any circular issued by the Competent Authority of the State of Madhya Pradesh to the effect that the Extinguishment Deed should bear the signatures of both the vendor and the purchaser and both must be present before the Registering Officer when the document is presented for registration. Absent such an express provision, insistence of presence of both parties to the documents by the Registering Officer, may be a matter of prudence. It cannot undermine the procedure prescribed for registration postulated in the Act of 1908.
45. The moot question in this case is : whether the action of the Society to cancel the allotment of the plot followed by execution of an Extinguishment Deed was a just action? That will have to be considered keeping in mind the provisions of the Act of 1960 and the Bye-laws of the Society which are binding on the members of the Society. The interplay of the provisions of the Contract Act and the Specific Relief Act and of the Co-operative Laws and the Bye Laws of the Society permitting cancellation of allotment of plot or the membership of the concerned member will have to be considered in appropriate proceedings. Whether the decision of the Society to cancel the allotment of plot made in favour of its member is barred by the law of Limitation Act, is again a matter to be tested in the proceedings before the Cooperative Forum where a dispute has been filed by the appellant, if the appellant pursues that contention.Page 63 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022
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46. In our considered view, the decision in the case of Thota Ganga Laxmi (supra) was dealing with an express provision, as applicable to the State of Andhra Pradesh and in particular with regard to the registration of an Extinguishment Deed. In absence of such an express provision, in other State legislations, the Registering Officer would be governed by the provisions in the Act of 1908. Going by the said provisions, there is nothing to indicate that the Registering Officer is required to undertake a quasi judicial enquiry regarding the veracity of the factual position stated in the document presented for registration or its legality, if the tenor of the document suggests that it requires to be registered. The validity of such registered document can, indeed, be put in issue before a Court of competent jurisdiction.
47. In the present case, the document in question no doubt is termed as an Extinguishment Deed. However, in effect, it is manifestation of the decision of the Society to cancel the allotment of the subject plot given to its member due to non fulfillment of the obligation by the member concerned. The subject document is linked to the decision of the Society to cancel the membership of the allottee of the plot given to him/her by the Housing Society. In other words, it is the decision of the Society, which the Society is entitled to exercise within the frame work of the governing cooperative laws and the Bye-laws which are binding on the members of the Society. The case of Thota Ganga Laxmi (supra), besides the fact that it was dealing with an express provision contained in the Statutory Rule, namely Rule 26
(k)(i) of the Andhra Pradesh Registration Rules 1960, was also not a case of a deed for cancellation of allotment of plot by the Housing Society. But, of a cancellation of the registered sale deed executed between private parties, which was sought to be cancelled unilaterally. Even for the latter reason the exposition in the case of Thota Ganga Laxmi (supra) will have no application to the fact situation of the present case.Page 64 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022
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48. Taking any view of the matter, therefore, we are of the considered opinion that, the High Court has justly dismissed the writ petition filed by the appellant with liberty to the appellant to pursue statutory remedy resorted to by him under the Act of 1960 or by resorting to any other remedy as may be advised and permissible in law. All questions to be considered in those proceedings will have to be decided on its own merits."
33. Having considered the submission made on behalf of both the sides coupled with the material placed on record, and the various decisions referred to hereinabove, it emerges that there is no dispute about the fact that the defendant Nos. 2 and 3 were having one-half share in the suit property. The following chronology of events can be gathered from the material placed on record:-
1. The defendant No.2 executed notarised agreement to sell dated 15.2.2017 in favour of defendant No.1 for an agreed consideration of Rs. 5.86 Crore with part payment of Rs. 3 lakh in cash in respect of her one-
half share.
2. On the same day i.e. on 15.2.2017, a Power of Attorney came to be executed by defendant No.2 in favour of defendant No.1 to deal with her one-half share in the land.
3. A notarised possession agreement called Kabja Karaar-cum- declaration dated 30.11.2017 came to be executed by defendant No.3 in favour of defendant No.1.
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4. On the same day i.e. on 30.11.2017, defendant No.3 executed a Power of Attorney in favour of defendant No.1 in respect of her undivided one-half share in the land.
5. Defendant No.1 acting as Power of Attorney of defendant No.3, executed a registered agreement to sell dated 1.5.2018 in his own favour for a total sale consideration of Rs. 51 Lakh out of which Rs. 25 Lakh came to be paid in cash by defendant No.1.
6. On 2.5.2018, defendant No.3 directly sold her undivided one-half share of the land in favour of defendant No.4 for an amount of Rs. 9.10 Crore.
7. On 7.5.2018, defendant No.1 filed a Civil Suit No. 246 of 2018 against the defendant No.2 for declaration and injunction in respect of the undivided one-half share of defendant No.2.
8. On 14.5.2018, defendant No.1 as Power of Attorney holder of defendant No.2, executed a sale-deed in his own favour and sold one-half share of defendant No.2 to himself for a total sale consideration of Rs. 40 Lakh (Rs. 20 lakh by cheque + Rs.20 Lakh by way of cash) as against agreed sale consideration of Rs. 5.86 Crore in the agreement to sell dated 15.2.2017.
9. On 14.5.2018, Samjuti Karaar/ MoU/ Agreement to sell came to be executed by defendant No.1 in favour of plaintiff in respect of respective shares of defendant Nos. 2 and 3, upon payment of Rs. 84 Lakh Page 66 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 in cash out of total consideration of Rs. 21 Crore.
10. On 25.10.2018, the defendant No.1 withdrew the Civil Suit No. 246/2018 filed against defendant no.2 unconditionally.
11. On 2.11.2018, a registered cancellation deed came to be executed between defendant No.1 and defendant No.2, cancelling the sale-deed dated 14.5.2018.
12. On 15.12.2018, defendant No.2 executed sale deed with respect to her undivided one-half share of the land, in favour of defendant No.5 for sale consideration of Rs. 11 Crore.
13. On 19.12.2018, defendant No.4 sold the land in question which represented one-half undivided share of defendant No.3, by way of registered sale-deed in favour of defendant No.5 for a sale consideration of Rs. 11 Crore.
14. On 7.1.2019, defendant No.5 received NA permission from the Collector, Ahmedabad.
15. On 22.1.2019, the Collector of Stamps in exercise of power under Section 32(1)(a) of the Gujarat Stamps Act, 1958, passed an order, inter alia, holding that the cancellation deed dated 2.11.2018 is appropriately stamped.
16. On 28.1.2019, the defendant No.5 received Page 67 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 development permission from Ahmedabad Municipal Corporation.
17. On 6.3.2019, the Plaintiff filed Special Civil Suit against all the parties seeking specific performance of the MoU dated 14.5.2018 and cancellation of various sale-deeds.
34. Since, Mr. Mihir Thakore, learned Senior Counsel has relied upon Sections 91 and 95 of the Indian Trust Act in support of his submission that rest of the defendants are holding the property in Trust on behalf of Plaintiff as the defendant Nos. 4 and 5 had knowledge of the prior MoU between the defendant No.1 and Plaintiffs- Appellants. It is worthwhile to refer Section 91 of the Indian Trusts Act, which provides as under:
Section 91. Property acquired with notice of existing contract.--Where a person acquires property with notice that another person has entered into an existing contract affecting that property, of which specific performance could be enforced, the former must hold the property for the benefit of the latter to the extent necessary to give effect to the contract.
35. On the analysis of the aforesaid provisions, it is crystal clear that a person acquiring any property with notice that another person has entered into an existing contract affecting that property, of which specific performance could be enforced, he must hold that property for the benefit of Page 68 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 the later to the extent necessary to given effect to the alleged contract. Thus, the notice of the earlier contract is sine qua none for the applicability of the provision of Section
91. At this juncture, it is also worthwhile to refer to Section 96 of the Indian Trusts Act, which provides as under:
Section 96. Saving of rights of bona fide purchasers.-- Nothing contained in this Chapter shall impair the rights of transferees in good faith for consideration, or create an obligation in evasion of any law for the time being in force.
36. On conjoint reading of provisions of Sections 91 and 96, it is clear that if a person acquiring property subsequently is a bonafide purchaser, then, the provisions of Section 91 would not be applicable. Further, in case of transaction by a bonafide purchaser for consideration, is also saved from the applicability of Section 91.
37. Now, on perusal of the facts of the present case, it transpires that whatever transaction is alleged to be entered into between defendant No.1 and original owners defendant Nos. 2 and 3 are concerned, is based upon unauthorised documents and on the Power of Attorney executed in favour of defendant No.1. It also transpires that on the basis of Power of Attorney in favour of defendant No.1 by the defendant No.2, defendant No.1 has himself executed the so-called sale-deed on behalf of defendant No.2 to himself, which came to be cancelled by cancellation deed, which has been not disputed by the defendant No.1 or defendant No.2.
The MoU entered into between plaintiff and defendant No.1 Page 69 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 in relation to the disputed land of the shares of defendant Nos. 2 and 3, is having condition that defendant No.1 shall get cancelled all the documents which may have been executed by the defendant Nos. 2 and 3. Further, it appears that after cancellation of the so-called sale deed, in favour of defendant No.1 by virtue of Power of Attorney holder of defendant No.2 in favour of defendant No.1, has already been cancelled and the original owners of the lands have independently sold the land to the defendant Nos. 4 and 5 through registered sale deed. The transaction entered into in favour of defendant No.1 by the defendant Nos. 2 and 3, has prima-facie come to an end. Therefore, under the facts and circumstances of this case, the provisions of Section 91 of the Indian Trusts Act, is not applicable.
38. It is also pertinent to note that as per the previous notarised documents executed in favour of defendant No.1 by the owners, consideration price was fixed for more than Rs. 5 Crore whereas in the sale deed in favour of defendant No.1 by virtue of Power of Attorney, the sale price was reduced to Rs. 40 Lakh. Not only that, in view of the registered cancellation deed, it emerges that defendant No.1 has admitted that he has not paid any consideration amount to defendant No.2 and, therefore, even if the contention of the plaintiffs-appellants is accepted to the effect that the consideration price can be paid in future is accepted, but, in view of the specific admission by defendant No.1 in the registered cancellation deed that no consideration was ever paid, there is no right devolve in favour of defendant No.1 at Page 70 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 all. Hence, as revealed from the documentary evidence, no property right was ever dwelve in favour of the defendant No.1. The defendant No.1 has no title over the property and, therefore, even if any document is executed by defendant No.1, cannot bind the bonafide purchaser with consideration.
39. It is also pertinent to note that in the present case, as per the say of the plaintiff, they have paid Rs. 84 lakh to the defendant No.1 by cash transaction, however, except the copy of books of account, no other material of payment of Rs. 84 Lakh in cash is produced. Whereas, it reveals from the registered sale deed executed in favour of defendant No.5, that amount has been paid by cheques. Thus, the very factum of payment of consideration by the plaintiffs to defendant No.1 is shrouded with cloud. Of course, defendant No.1 has not appeared and has not denied the receipt of Rs. 84 Lakh. But, fact remains that there is no prima-facie documentary evidence to support the version of payment of cash amount to defendant No.1. Even if the say of the plaintiffs- appellants regarding the payment of Rs. 84 lakh is accepted, in that case also, considering the fact that defendant No.1 himself has no legal title over the property, any document executed by him in favour of plaintiff, prima- facie does not give any title to the plaintiffs-appellants over the property.
40. So far as the submission on behalf of the plaintiff that there was a need of registered re-conveyance deed instead of Page 71 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 mere cancellation document in respect of transaction of sale entered into between defendant Nos. 1 and 2 is concerned, the reliance placed on the decisions of the Privy Council as well as other decisions, does not apply to the legal position prevalent in the State of Gujarat, as the decision of the Apex Court is based upon the relevant provisions prevalent in the State of Andhra Pradesh and Tamil Nadu. Therefore, so far as the State of Gujarat is concerned, there is no need of any registered re-conveyance deed to be executed for cancellation of a sale-deed.
41. It is pertinent to note that so far as the agreement to sell for assignment of right in a property is concerned, it can very well be enforceable at law. However, enforceability of an agreement to sell is always depending upon the fact that the person who is assigning his right in property, has some sort of right dwelve upon him by virtue of some prior transaction between himself and the owner of the property. Now, considering the factual aspect of the present case, as referred to hereinabove, prima-facie there is doubt as to any proprietory right in existence in favour of the defendant No.1 on the basis of the alleged sale-deed executed by himself in his own favour by virtue of Power of Attorney of defendant No.2. Since there is a dispute as to any proprietary right dwelve upon him and the fact that subsequently there is a cancellation transaction entered into between defendant Nos. 1 and 2, there is a cloud over the entitlement of the plaintiff in respect of the MoU between himself and defendant No1.
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42. So far as the version of the defendant No.5 that the MoU between plaintiff and defendant No.1 is a contingent contract is concerned, at this stage it is to be observed that considering the averment made in the alleged MoU and the various documents executed between the parties, the question of nature of the Contract whether it is a contingent or not, needs to be decided on the basis of the evidence which may be produced by both the sides in the trial.
43. Now, considering the entire material placed on record, it clearly transpires that all the three ingredients for granting interim injunction is lacking in this matter. The trial Court has considered this fact. Under the facts and circumstances of the case, the impugned order of the trial Court is plausible and, therefore, this Court being appellate Court having limited discretion in interfering with the discretionary order of the trial Court, does not seem to interfere with the said decision. However, considering the fact that there is some disputed question of fact involved in the matter and during the pendency of the proceedings, construction have been erected rightly or wrongly, this Court is of the opinion that interest of justice should be subserved if the construction, if any made or third party interest, if any, created by defendant No.5, is made subject to the ultimate decision of the Suit.
44. Hence, considering the facts and circumstances of the case, the present Appeal from Order deserves to be dismissed, of course with the following observations:
Resultantly, the present appeal from order stands Page 73 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022 C/AO/130/2020 JUDGMENT DATED: 27/04/2022 dismissed. The construction, if any, carried out by defendant No.5, shall be subject to the decision of the Suit and if any third party interest is created and if any deeds is/ are executed in favour of any third party or otherwise, shall clearly stipulate that the matter is sub-judice and all sales shall be subject to the ultimate decision of the Suit.
Considering the facts and circumstances of the case, the trial Court is directed to hear and dispose of the suit, as early as possible, preferably within a period of 4 months from the date of receipt of this order. All parties must cooperate in early hearing and disposal of the Suit.
Nothing in the observation made in the present order, shall be deemed or construed any expression of final opinion of this Court and the trial Court shall have to decide the suit naturally on its own merits.
No order as to costs.
Direct Service is permitted.
The Civil Application also stands disposed of accordingly.
(DR. A. P. THAKER, J) SAJ GEORGE Page 74 of 74 Downloaded on : Wed Apr 27 21:22:07 IST 2022