Gujarat High Court
Small vs Navroz on 1 April, 2009
Author: C.K.Buch
Bench: C.K.Buch
AO/277/2008 33/ 33 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD APPEAL FROM ORDER No. 277 of 2008 With APPEAL FROM ORDER No. 324 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE C.K.BUCH ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA - Appellant(s) Versus NAVROZ HOMI TARAPORE SOLE PROPRIETOR OF & 5 - Respondent(s) ========================================================= Appearance : MR SS PANESAR for Appellant(s) : 1, MR SANJAY A MEHTA for Respondent(s) : 1, NOTICE UNSERVED for Respondent(s) : 2, MR RK MISHRA for Respondent(s) : 3, MR JAL SOLI UNWALA for Respondent(s) : 4, MR RS SANJANWALA for Respondent(s) : 5 - 6. ========================================================= CORAM : HONOURABLE MR.JUSTICE C.K.BUCH Date :01/04/2009 CAV JUDGMENT
Mr. S.S. Panesar, learned counsel appearing for the appellant submitted that both these appeals are filed by Small Industries Development Bank of India [hereafter to be referred to as SIDBI ] and both the appeals can be disposed of by a common judgment and order as parties in both the appeals are similar, and both the appeals are arising out of common litigation pending between the parties in City Civil Court, Ahmedabad in the form of Civil Suit No. 2035 of 2006. It is pointed out by learned counsel appearing for both the parties that this Court vide order dated 22nd August, 2008 admitted Appeal From Order No. 277 of 2008 and decided to grant ad-interim relief in terms of para 5[[A]. However, it is clarified by the Court that the appellant-SIDBI also should not alienate/transfer the property in question till final disposal of the appeal admitted. Other appeal i.e. Appeal From Order No. 324 of 2007 has been admitted by this Court vide order dated 7.7.2008. However, the Court directed that the trial court should decide and dispose of the application exh.5 positively on or before 23rd July, 2008. Learned Chamber Judge, City Civil Court, Ahmedabad decided the Notice of Motion by allowing the same. Being aggrieved by the nature of orders passed by the learned Chamber Judge, the appellant SIDBI has filed both these appeals. Appeal From Order No. 324 of 2007 is arising out of the order passed by the learned Chamber Judge dated 18th July, 2007, whereby, the learned Chamber Judge allowed Notice of Motion Exh.50 in Civil Suit No. 2035 of 2006. One another Civil Suit No. 1530 of 2007 between the parties has been filed by plaintiff Dinesh @ Dilip Keshavbhai Patel who is defendant no.4 in Civil Suit No. 2035 of 2006 and one Chhaganbhai Keshavbhai Patel against the defendants in the said suit seeking relief, inter alia, for declaration that agreement of sale dated 28.12.2004 and supplementary agreement dated 25.11.2005 concerning the suit property, allegedly executed by the defendant no.1 is forged, fabricated, illegal and void ab initio. It is also prayed in the said suit that it may be declared that lease deed and the deed of conveyance executed between defendant no.3 of Civil Suit No. 1530 of 2007 and defendant no.2 of Civil Suit No. 2035 of o2006 are invalid, illegal, void and void ab initio. Indisputably, property in both the suits as referred to by the plaintiff is same. In one suit, the property is described as industrial Shed No. C-1 53/1, while in another suit, the same is described as industrial Shed No.3-1 and 53/1.
After going through the papers of both these appeals and submissions made by learned counsel appearing for the parties, if finding is recorded in one of the Appeals From Order, i.e. Appeal From Order No. 277 of 2008, it would automatically minimize the discussion and recording of ultimate finding in Appeal From Order No. 324 of 2007, and therefore, I have decided to deal with the facts and legal proposition placed by the appellant [original defendant no.2] in Appeal From Order No. 277 of 2008. The affidavit in reply filed on behalf of respondent no.3 is on record.
Navroz Homi Tarapore, plaintiff of Civil Suit No. 2035 of 2006, sole proprietor of M/s. H.T.Engineering, Ahmedabad, moved Notice of Motion against 6 defendants including the present appellant-SIDBI joining it as defendant no.2 as mentioned earlier. It is contended by the plaintiff that he has purchased lease-hold rights of two Sheds in GIDC Naroda Estate, Naroda for carrying out manufacturing activities. The plaintiff was owner of one more Shed, i.e. Shed in GIDC. He came to know that Shed no. C-3, 53/1, Phase-III of Naroda GIDC was lying unused and allottees thereof were desirous of transferring their leasehold rights in favour of any interested person. As the said Shed situation wise was convenient to the plaintiff, he decided to acquire leasehold rights of that Shed. It is contended that the said Shed was allotted to M/s. Surgical Extrusion and on further inquiry being made, it was learnt that M/s.Surgical Extrusion was a partnership consisting of defendant nos. 5 and 6 of the suit and others. The said Shed was allotted to M/s. Surgical Extrusion as sole proprietary concern of one Dinesh @ Dilip Keshavbhai Patel and thereafter the said concern was converted into partnership firm wherein, defendant nos. 5 and 6 were partners. The plaintiff started negotiations with defendant nos. 5 and 6 and as they were desirous to transfer leasehold rights of the said Shed in question in favour of the plaintiff, they worked out terms and conditions. According to the plaintiff, defendant nos. 5 and 6 who were competent to transfer the leasehold rights, entered into an agreement. The agreement was between the plaintiff on one hand and defendant nos. 5 and 6 on the other hand. The parties, i.e. plaintiff and defendant nos. 5 and 6 agreed that the amount required to be paid by the plaintiff to defendant nos. 5 and 6 for acquisition of right in respect of the Shed in question shall be directly paid by the plaintiff as per the directions of defendant nos. 5 and 6 to the Bank of Baroda, who had charge over the said property. The plaintiff placed reliance on the agreement dated 12.12.2004. Amount of Rs. 6.00 lacs was paid to the defendant no.6, out of which, Rs. 1.00 lac were paid to the defendant no.5 directly and rest of the amount was paid by the plaintiff in favour of the Bank of Baroda A/c. M/s. Surgical Extrusion. Say of the plaintiff is that he purchased the leasehold rights by paying total amount of Rs. 6.00 lacs. It is the say of the plaintiff that on account of non-payment of energy bills, electricity connection was also disconnected by the Gujarat Electricity Board and it was agreed that the plaintiff shall make payment of the said amount which was ultimately found due and payable for getting electricity connection re=established in respect of the said Shed. Municipal Corporation property tax bills were also found not paid and were outstanding and all these facts were taken into consideration while arriving at purchase consideration which was to be paid by the plaintiff to defendant nos. 5 and 6.
Say of the plaintiff is that the plaintiff and his family owned about 9 Vintage cars which were parked by the plaintiff in the said Shed immediately after getting possession of the Shed from defendant nos. 5 and 6 and the plaintiff was carrying out repairs and maintenance of the said vehicles also within the said Shed No. C-1 53/1. The plaintiff was also using the said Shed for storing materials belonging to the plaintiff such as glass wool etc and his old books of accounts and other stationery belonging to him which were not in day to day use. It is the say of the plaintiff that the plaintiff was informed by defendant no.1 that prior to the agreement entered into between the plaintiff and defendant nos. 5 and 6, an agreement was entered into between defendant no.5 and defendant no.1 in respect of the said Shed on 29.4.2003 and on 6.12.2003, it was finally cancelled by an agreement of cancellation and the plaintiff was handed over copies of both these agreements. Say of the plaintiff is that subsequent to the agreement entered into between him and defendant nos. 5 and 6 and after the plaintiff was put into possession of the Shed, defendant nos. 5 and 6 along with defendant no.1 approached the plaintiff time and again and attempted to persuade the plaintiff to sell the said Shed to defendant no.1 stating that though he had agreed for cancellation of agreement with defendant nos. 5 and 6 as he was not in a position to pay at relevant point of time, but now, he was once again interested in purchasing the said Shed. It is the say of the plaintiff that as no manufacturing activities were going on in Shed taken over by the plaintiff, he was persuaded that he may retransfer the Shed and may acquire any other suitable place for maintenance and repairs of his cars and other materials. According to the plaintiff, the first defendant had expressed his desire to have a look at the Shed from within and not doubting the intention of the first defendant, in good faith, the plaintiff permitted the first defendant to have a look at the Shed from within. On couple of occasions, the first defendant also requested the plaintiff to show Vintage cars parked within the Shed to a couple of his friends and the plaintiff, all the time cooperated and acceded to the requests of the defendant no.1. But the say of the plaintiff is that at no point of time, the plaintiff had ever agreed to sell or transfer otherwise the said Shed to the first defendant. However, on 11th October, 2005, all of a sudden, officers of the appellant [original defendant no.2] Bank came to the suit property and disclosed their intention to apply seal to the suit property. The plaintiff was shocked to know this and asked the reason as to why the appellant bank was intending to apply seal on the Shed occupied and used by the plaintiff. In response thereof, the plaintiff was told that the Shed [suit property] was furnished as security by the first defendant in favour of the second defendant and since the first defendant failed to make payment of loan, the bank had taken over possession to apply seal on the said property. The plaintiff tried to convince the officers of SIDBI and pointed out that the said property could not have been furnished as security by the defendant no.1 inasmuch as the property in question was never owned or possessed by the first defendant. The plaintiff also tried to show the document of agreement executed between him and defendant nos. 5 and 6, material lying inside the Shed owned by the plaintiff and other material belonging to the plaintiff. The plaintiff also pointed out that nothing belonging to defendant no.1 was lying in the Shed nor in the compound of the Shed No. C-1 53/1 of Phase-III. But the officers of SIDBI were not ready to listen to the plaintiff and threatened him and his staff to leave the premises immediately. The plaintiff and his staff were also threatened for being arrested by the police. The police was accompanying the bank officers. The plaintiff was taken aback by the conduct of the appellant bank and ultimately succumbed to the threat. The plaintiff requested the officers that before sealing the Shed-suit property, proper inventory may be carried out of the material lying inside the Shed and compound including vehicles and other things to safeguard the interest of the plaintiff. It was also requested to make panchnama, however, all these requests were turned down by the appellant bank. According to the plaintiff, the appellant bank took high handed action in autocratic manner and ultimately they applied seal on the premises. This act of the defendant bank was in utter disregard of law and other formalities which were required to be observed. The plaintiff, therefore, filed suit for relief of declaration, injunction and other ancillary reliefs, and inter alia, moved Notice of Motion Exh.7. The plaintiff prayed for following main reliefs:-
[a] The Hon'ble Court be pleased to direct defendant no.2 to forthwith open seals applied by the officers of defendant no.2 to the premises of Shed No. 53/1 in Naroda GIDC Industrial Estate, Naroda, Ahmedabad applied on 11.10.2006 and permit the plaintiff, his servants, agents etc to have an access to the said Shed and its premises as well as the vehicles and other movable lying in the Shed No. 53/1 in Naroda GIDC Industrial Estate, Naroda, Ahmedabad.
[b] The Hon'ble Court be pleased to permit the plaintiff to deploy his own independent security agency at Shed No. 53/1 in Naroda GIDC Industrial Estate, Naroda, Ahmedabad with powers to restrict entry of any other unauthorized person so as to secure safety and security of vehicles and other belongings like books of account, machinery, materials etc. [c] The Hon'ble Court be pleased to restrain the defendants and in particular defendant no.2 from in any manner disposing off or dealing with, transferring, alienating, selling or disposing off or in any other manner whatsoever dealing with the suit property or any part thereof till the hearing and final disposal of the suit.
[d] The Hon'ble Court be pleased to restrain the defendant no.2, its servants, agents etc. from taking away or disturbing in any manner whatsoever possession of the plaintiff in any manner whatsoever the possession of the plaintiff in respect of Shed No.53/1 in Naroda GIDC Industrial Estate, Naroda, Ahmedabad till the hearing and final disposal of the suit.
Learned Chamber Judge issued urgent notice on 7th October, 2006 and making it returnable on 18th October, 2006. However, the learned Chamber Judge ordered to appoint Commissioner as named by the Registrar from the panel of staff members for drawing panchnama as contemplated under Order 27 Rule 9 of Code of Civil Procedure and one Mr. A.R.Chauhan was appointed as Commissioner. Indisputably, panchnama has been drawn. Application Exh.7 came to be resisted by the defendant no.2[present appellant SIDBI] by filing reply. Defendant nos. 5 and 6 appeared through their advocate, but they did not file any formal written statement or reply to the application exh.7. Defendant no.1 Rajeev M.Zaveri appeared through his advocate, but did not file any reply to the application exh.7. Present appellant-defendant no.2 ultimately remained only contesting party. I have gone through the reply filed by the appellant in the suit in response to the application exh.7 vide Exh.17. Say of the appellant is that Notice of Motion is filed in collusion with other defendants and intention of the plaintiff is malafide so that recovery proceedings initiated by the appellant SIDBI may frustrate and hearing of the said proceedings can be protracted. According to the appellant SIDBI, M/s. Tirthesh Aluminium Pvt. Ltd., through its director including defendant no.1 approached the appellant bank with a request to grant project finance for setting up of a unit for manufacturing collapsible aluminium tubes and after assessing the requirement and viability of the project, the appellant SIDBI decided to sanction loan of Rs. 50.00 lacs on 5.12.2005. Against that loan, borrower company, i.e. M/s. Tirthesh Aluminium Pvt. Ltd. executed a document in favour of the appellant bank on 19.1.2006 and deposited the title deeds/documents of Shed No. C-1 53/1 Phase-III of GIDC, Naroda, i.e. suit property with appellant SIDBI and created equitable mortgage. It is the say of the appellant SIDBI that necessary permission to create equitable mortgage was granted by original defendant no.3 GIDC. The charge created in favour of appellant SIDBI is also registered charge with Registrar of Companies, Ahmedabad. Defendant no.3 GIDC had also executed registered sale deed and conveyance deed in favour of M/s. Tirthesh Aluminium Pvt. Ltd. on 28.12.2005. As borrower, M/s. Tirthesh Aluminium Pvt. Ltd. Became defaulter, the appellant bank wrote various letters and ultimately issued notice on 29.6.2006 demanding Rs. 17,04,707/- which had fallen due up to that date against the term loan granted. According to appellant SIDBI, on failure to repay due amount SIDBI decided to invoke exercise of its powers vested in it under Section 38 of the SIDBI Act and took possession of the Shed in question on 11.10.2006 by preparing panchnama in presence of police. It is contended that the plaintiff was present at the relevant point of time. Say of the appellant SIDBI is that there cannot be any legal or valid claim or right either of plaintiff or defendant nos. 4 to
6. So, the claim as to possession of the property i.e. suit property made by the plaintiff should not be accepted and same is not sustainable in the eye of law. It is also alleged by the appelant SIDBI that the agreements allegedly executed on 6.12.2003, 29.4.2004 and 12.5.2004 and special power of attorney relied upon by the plaintiff dated 12.5.2004 have no sanctity and such documents are not binding to SIDBI. Indisputably, GIDC has never agreed as to transfer of leasehold right in favour of the plaintiff and it would not be proper for the Court to accept the say of the plaintiff as gospel truth that defendant nos. 5 and 6 were authorized to transfer the leasehold right of the suit property.
Resistance of application exh.7 by the defendant no.3 which is on record in paper book exh.35 of the file of the lower court reveals that GIDC has taken technical stand. It is contended by the GIDC that the suit against the GIDC is not maintainable for want of statutory notice as provided under Section 55A of the GIDC Act. The suit property, i.e Shed No.C-1 53/1 was originally allotted to M/s. Surgical Extrusion owned by Dinesh @ Dilip K. Patel defendant no.4. Thereafter, on 27th May, 2004, an application was submitted for transfer of the Shed in favour of M/s. Surgical Extrusion having two partners, i.e. Dinesh K. Patel and Chhanabhai K. Patel and the said application was approved by order dated 5th June, 2005. It is submitted that M/s.Surgical Extrusion applied on 26th October, 2005 seeking permission to transfer the Shed in favour of M/s. Tirthesh Aluminium Pvt. Ltd and GIDC had approved the said transfer. Thereafter, vide office order dated 5th January, 2006, GIDC permitted M/s. Tirthesh Aluminium Pvt. Ltd to mortgage the Shed with SIDBI against the term loan. In sum and substance, say of the GIDC is that as such, nothing specifically is alleged against the GIDC by the plaintiff and there is no cause of action which can be said to have been alleged against the GIDC. It is possible to hear the suit and resolve the dispute between the parties even in absence of GIDC.
Affidavit of defendant no.4 Dinesh @ Dilip K. Patel [exh.55] states that agreement of sale dated 28th December, 2004 allegedly executed in favour of defendant no.1 Rajeev Zaveri is forged document and the same does not bear his signature. According to defendant no.4, he has never received office order dated 25.11.2005 either from the GIDC or from defendant no.1 Rajeev Zaveri and till date of filing of the affidavit, the said office order was not served to him. It is also alleged that supplementary agreement also does not bear his own signature or signature of his partner Chhanabhai K. Patel. Defendant no.4 has accepted that the plaintiff is in possession of the suit Shed and possession of the plaintiff is legal and rightful.
According to Mr. S.S. Panesar, learned counsel appearing for the appellant SIDBI, learned Chamber Judge failed in appreciating the real point at issue and erred in deciding that prima facie case as well as balance of convenience are in favour of the plaintiff. Learned Chamber Judge has ignored the law and ought to have directed the plaintiff to appear in the proceedings initiated by SIDBI. Nature of the suit would not be maintainable against SIDBI and the plaintiff would not be entitled to any relief that has been prayed either against SIDBI or GIDC. M/s. Tirthesh Aluminium Pvt. Ltd was not a party to the agreement allegedly executed in favour of the plaintiff nor it has been made party in the suit conveniently. When it prima facie emerges that the suit property was with SIDBI as mortgaged property, the application exh.7 ought to have been dismissed. Mr. Panesar has placed reliance on a decision of the Apex Court in the case of Waheed Baig Vs. Bangi Lakshmamma and others, reported in 2008 AIR SCW 4176.
More particularly, he has placed reliance on the observations made by the Apex Court in para-9 of the judgment, which is reproduced hereunder.
9. A copy of the agreement for sale has been filed before us. This does not refer to any condition that after payment of installment the lessee can become the owner and the agreement for sale was to take effect. Since the appellant was not the owner of the property, he could not have entered into an agreement to sell a property of which admittedly he was not the owner. Great emphasis is laid by learned counsel for the respondents on Section 13 of the Specific Relief Act, 1963 (in short the 'Act').
Section 13 reads as follows:
"13.
Rights of purchaser or lessee against person with no title or imperfect title.
13.
(1) Where a person contracts to sell or let certain immovable property having no title or only an imperfect title, the purchaser or lessee (subject to the other provisions of this Chapter), has the following rights, namely :
(a) if the vendor or lessor has subsequently to the contract acquired any interest in the property, the purchaser or lessee may compel him to make good the contract out of such interest;
(b) where 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, and when a conveyance by other persons is necessary to validate the title and they are bound to convey at the request of the vendor or lessor, the purchaser or lessee may compel him to procure such conveyance;
(c) where the vendor professes to sell unencumbered property, but the property is mortgaged for an amount not exceeding the purchase money and the vendor has in fact only a right to redeem it, the purchaser may compel him to redeem the mortgage and to obtain a valid discharge, and, where necessary, also a conveyance from the mortgagee;
(d) where the vendor or lessor sues for specific performance of the contract and the suit is dismissed on the ground of his want of title or imperfect title, the defendant has a right to a return of his deposit, if any, with interest thereon, to his costs of the suit, and to a lien for such deposit, interest and costs on the interest, if any, of the vendor or lessor in the property which is the subject-matter of the contract.(2)
The provisions of sub-section (1) shall also apply, as far as may be, to contracts for the sale or hire of movable property.
Relying upon the above judgment, Mr. Panesar has argued that defendant nos. 5 and 6 had no title with them or it was at least, not perfect title qua leasehold rights of the Shed in question and therefore, they were not authorized or otherwise entitled to transfer the alleged leasehold right. Learned Chamber Judge ought not to have concentrated on the allegation made by defendant no.4 that his signature was forged. True it is that one another suit is filed and is pending in the lower court, wherein serious allegations have been made against the defendant no.1 Rajeev Zaveri, but that by itself would not make the case of the appellant weak nor would it add any strength in the case of the plaintiff. Mr. Panesar has taken me through the relevant portion and dates of the document referred to by the learned Chamber Judge and has attempted to interpret that the document relied upon by the SIDBI is more genuine, valid and legally executed document and no error was committed by SIDBI in sealing the property under the statutory powers vested with the SIDBI.
I have heard Mr. Sanjay Mehta and Mr. Jal Soli Unwala, learned counsel appearing for respondent nos.1 and 4 respectively. They have submitted that the learned Chamber Judge has decided the application exh.7 keeping in mind all relevant aspects and has recorded just and correct findings. According to both these counsel, this is a case wherein, it impliedly emerges that defendant no.1 Rajeev Zaveri and some officials of SIDBI including the directors of M/s. Tirthesh Aluminium Pvt. Ltd played fraud of Rs. 50.00 lacs otherwise, SIDBI would not have sanctioned huge loan of Rs.50.00 lacs on 5.12.2005 though there was no valid document conferring any right to M/s. Tirthesh Aluminium Pvt. Ltd approved by the GIDC till 28.12.2005. Indisputably, the Shed in question was allotted to one Dinesh @ Dilip K. Patel, proprietor of M/s. Surgical Extrusion, i.e defendant no.4 and ultimately that business was converted into a partnership firm, wherein original allottee Dinesh @ Dilip K. Patel was one of the partners. It is very likely that defendant no.1 Rajeev Zaveri may have introduced one partner of the said firm, but it is not the say even of SIDBI that all the partners decided to transfer the Shed in favour of M/s. Tirthesh Aluminium Pvt. Ltd nor any resolution of the partnership is produced authorizing defendant no.1 Rajeev Zaveri to transfer the Shed on behalf of the firm to M/s. Tirthesh Aluminium Pvt. Ltd. So, M/s. Tirthesh Aluminium Pvt. Ltd who claims to have handed over original title deed and created equitable mortgage with SIDBI had no right whatsoever and the facts were required to be evaluated in the background of allegations made by the plaintiff of other suit filed against defendant no.1 Rajeev Zaveri, and the stand taken by defendant no.4-original allottee Dinesh @ Dilip K. Patel in the present suit. In this background, strength of the case of the plaintiff has been evaluated and finding of the learned lower court is absolutely legal and proper and does not require any interference.
Keeping mind the rival contentions and on scanning of the documentary evidence as well as affidavit available on record in the form of paper book which is considered by the learned Chamber Judge while passing the impugned order, it emerges that the Shed No. C-1 53/1 Phase-III of GIDC, i.e suit property was initially allotted to sole proprietorary concern and the said sole proprietary concern was converted into a partnership firm. GIDC has accepted creation of partnership and has started recognizing M/s. Surgical Extrusion as being in possession and enjoyment of the property leased out by GIDC. There is no dispute that some advances or loan were taken by the partnership firm from one nationalized bank, i.e Bank of Baroda and it is the say of the plaintiff that during the process of transfer of leasehold right from defendant nos. 5 and 6 to the plaintiff, debt of Bank of Baroda was cleared on account of payment made by the plaintiff. Clearance of loan of Bank of Baroda is relevant. Intimation of transfer and about the change in the firm was given to GIDC on 27th May, 2004 and 26th October, 2005. When it is not a matter of dispute that defendant no.1 Rajeev Zaveri is one of the directors of M/s. Tirthesh Aluminium Pvt. Ltd, his status including his right, title and interest in the suit property ought to have been looked into carefully by SIDBI before granting term loan of Rs. 50.00 lacs. This M/s. Tirthesh Aluminium Pvt. Ltd failed to make payment of loan to SIDBI and therefore, after entering into some correspondence, SIDBI issued notice and decided to invoke powers vested in it under Section 38 of the SIDBI Act. It is not a matter of dispute that after taking possession, SIDBI applied its seal and restrained the plaintiff from using the Shed, i.e. suit premises. The appellant SIDBI placed reliance on two sets of documents and the learned Chamber Judge was supposed to determine the case of the plaintiff on the strength of the documents relied upon by the appellant SIDBI as well as plaintiff himself. On plain reading of the order passed by the GIDC , the first allottee of the suit property, i.e plaintiff gets ample support. It clearly emerges that agreement dated 29th April, 2003 executed by defendant no.5 in favour of defendant no.1 Rajeev Zaveri was subsequently cancelled by valid agreement dated 29th April, 2003. On facts, the learned Chamber Judge has rightly concluded that agreement dated 12.5.2004 produced by the plaintiff and executed by defendant nos. 5 and 6 in favour of the plaintiff for transfer of leasehold right qua the suit property does not suffer any infirmity and the same appears to be valid, of course, subject to approval by GIDC if required. But defendant nos. 5 and 6 were legitimately entitled to put the plaintiff into possession of the suit property and as such, there is no challenge that on the day on which the officers of SIDBI went to the site for applying seal, the Shed was possessed and enjoyed by the plaintiff. SIDBI itself accepts that plaintiff or his representatives were present at the time when alleged panchnama was prepared by their officers. During the course of argument, Mr. Panesar has offered that the plaintiff can be permitted to take away his valuable 9 Vintage cars and other material lying in the Shed pending hearing and disposal of the suit. This offer may have been made before the trial court also. When it is not possible for SIDBI to deny that on the day on which they applied seal on the suit property, the suit property was in possession of the plaintiff, and this offer was advanced. This is nothing but implied admission of the fact that plaintiff was in lawful possession of the suit property and the same was being used and the valuable property lying inside the Shed is getting adversely affected. Valuable Vintage cars may get deteriorated in absence of maintenance including the air which is required to be maintained in the tyres etc and may result into loss which cannot be compensated in terms of money. It prima facie appears that sale deed executed on 28.12.2004 alleged to have been executed by defendant no.4 D.K. Patel and supplementary agreement executed by defendant with his partner Chhanabhai Keshavlal Patel in favour of defendant no.1 Rajeev Zaveri are not genuine document. The plaintiff or defendant who have taken rival plea contending specifically that these documents are forged may succeed either in establishing that fact. In para-6 of the order under challenge, the learned Chamber Judge has discussed each argument that were advanced by the learned counsel for the the parties.
One relevant aspect which needs consideration is that transaction relied on by the plaintiff does not appear to be collusive and entered into a dealing with a view to defeat the legitimate claim of any creditor. On the contrary, some of the amount of consideration was paid to Bank of Baroda as there was charge of Bank of Baroda on the Shed in question while getting possession of third shed required by the plaintiff. So, it is difficult to doubt the genuineness of the document dated 12th May, 2004 and it is difficult for the Court to conclude at this stage that case placed by the GIDC supports the case of the appellant SIDBI. Transaction between M/s. Surgical Extrusion and M/s Tirthesh Aluminium Pvt.Ltd approved by GIDC is under great shadow of doubt as crucial documents need close scrutiny keeping in mind the allegation qua authenticity of the signature of Rajeev Zaveri-defendant no.1. Indisputably, Shed No.C-1 53/1 Phase-III was allotted to M/s. Surgical Extrusion owned by sole proprietor-defendant no.4 Dinesh @ Dilip K. Patel and the said proprietary concern was converted into a partnership property. Property thereafater was occupied by partnership firm and intimation thereof was given to GIDC on 27.5.2004 and also about the change in the firm on 26th October, 2005.
Defendant no.1 Rajeev Zaveri is director of M/s Tirthesh Aluminium Pvt.Ltd and he is the person who obtained term loan of Rs. 50.00 lakh from defendant no.2 SIDBI and executed the deed of mortgage. Merely because GIDC had accorded necessary permission for purpose, whether would confer authority or power on Rajeev Zaveri would be a question. This M/s Tirthesh Aluminium Pvt.Ltd failed to make repayment of loan to SIDBI and therefore, the appellant SIDBI issued a notice and invoked powers under Sec.38 of the SIDBI Act. It is emerging from the record that GIDC had accorded permission on 5.1.2006. It is possible to infer that Rajeev Zaveri defendant no.1 who obtained loan was aware about the earlier transactions that had taken place on 24.4.2003 and 6.12.2003 i.e., agreement between Rajeev Zaveri and defendant no.5 and its cancellation and these documents were handed over to the plaintiff on 12.5.2004. This prima facie appears to be fraud played on SIDBI by Rajeev Zaveri-defendant no.1 with the help of the officers of SIDBI, because, on the date of sanction of loan, possession of the property, i.e. above referred Shed was not with M/s Tirthesh Aluminium Pvt.Ltd and the actual possession and use of Shed in question was with plaintiff. Crucial question would be that before granting of huge amount of Rs. 50.00 lacs, whether any officer, agent or servant had ever visited the suit Shed or not or everything was only a paper work and without physical verification also shall have to be determined and therefore, the learned Judge has decided that plaintiff has strong prima facie case. Scope of success in a suit for plaintiff needs to be ascertained prima facie and on the strength of the facts placed on record. These facts have to be gathered from the plaint, documents produced in support thereof and affidavits filed. The plaintiff can add strength in the case placed by him from the written statement filed by the defendant and from the documents produced by contesting party and can point out successfully that his case gets strengthened on account of completion of pleadings placed by rival contenders. Even the appellant SIDBI does not dispute that since 1982 till 2nd October, 2005 the Shed in question was running in the name of M/s. Surgical Extrusion on record of defendant no.3 GIDC and the documents relied on by the appellant SIDBI are not capable of meeting with the circumstances emerging from two crucial documents, i.e Mark 4/3 and 4/4 i.e transaction between Rajeev Zaveri-defendant no.1 and defendant no.5 i.e agreement referred to above and its cancellation.
True it is that agreement to sell does not create a title but it confers a right and also interest. While entering into an agreement, if possession of immovable property is handed over to a party, then, the party in whose favour agreement to sell has been executed and who is in enjoyment and actual possession of the property can positively hammer that he is entitled to protect his right and assert his claim at least qua third parties. Close reading of the said document produced points out one fact that M/s. Tirthesh Aluminium Pvt.Ltd is not a party so far as the transaction between the plaintiff and the persons who have transferred and handed over the suit Shed to the plaintiff is concerned. Obstruction in personal enjoyment of the suit Shed has been attempted by the appellant SIDBI and the appellant SIDBI has emerged as one of the claimants qua the suit Shed on account of alleged transaction that has taken place between Rajeev Zaveri and appellant SIDBI. Status of defendant no.3 GIDC is for technical purpose and GIDC is proper party and for obtaining effective orders, GIDC was required to be joined. Merely because M/s. Tirthesh Aluminium Pvt.Ltd is not a party to the suit, it does not make the pleading of the plaintiff weak or otherwise unsustainable. The learned Judge has rightly observed that at this stage there is no doubt about the genuineness of the said agreement dated 12.5.2004 [Mark 4/1] .
So, on the date of the suit, possession of the suit Shed of the plaintiff was legal and same needs to be protected. Merely because effective steps were not taken by the plaintiff to get his transfer deed registered in his favour from the vendor and for getting his name entered in the record of GIDC would not make possession and enjoyment of the plaintiff of the suit Shed unauthorized or totally illegal. The appellant SIDBI relies on the document executed by Rajeev Zaveri-defendant no.1. This defendant no.1 Rajeev Zaveri, director of M/s. Tirthesh Aluminium Pvt.Ltd had approached the GIDC, but the entitlement to execute the deed mark 18/7 and 18/8 of Rajeev Zaveri-defendant no.1 in his individual capacity or in capacity of director of M/s. Tirthesh Aluminium Pvt.Ltd needs close scanning. Learned Chamber Judge has assigned good sound reasons in the judgment for granting interim relief and has rightly observed that though there is no register in respect of transfer of ownership of the Shed between M/s. Surgical Extrusion and M/s. Tirthesh Aluminium Pvt.Ltd, officers of SIDBI, for the reasons best known to them, hurriedly sanctioned the term loan of huge amount of Rs.50.00 lacs in favour of M/s. Tirthesh Aluminium Pvt.Ltd and completed the entire loan process hardly within 15 days. While hearing the learned counsel appearing for the parties, this Court also felt that the appellant perhaps has rushed to this Court by moving the present Appeal From Order only on account of these observations made by the learned Chamber Judge. Learned Chamber Judge has further observed that appellant SIDBI itself realized that fraud has been played and on realizing such contingency, the appellant immediately instructed Konkan Mercantile Bank, Mumbai not to make payment of Rs. 22,74,000/- against term loan to the borrowers i.e. M/s. Tirthesh Aluminium Pvt.Ltd. It appears prima facie that M/s. Tirthesh Aluminium Pvt.Ltd is a ghost created by defendant no.1 so that financial institution like appellant or any commercial bank can be defrauded.
One other relevant circumstance which tilts the balance of convenience in favour of the plaintiff also needs consideration and that has been considered by the learned Chamber Judge regarding panchnama dated 11.10.2006 prepared by the officers of the appellant SIDBI wherein there is reference of 5 machines of Palsont Company. These machines were lying in packed condition in the premises i.e suit Shed, but it would not be either legal or proper to infer that these machines were of the ownership of M/s. Tirthesh Aluminium Pvt.Ltd or Rajeev Zaveri-defendant no.1. Panchnama prepared by the officer of the appellant SIDBI on 11.10.2006 which specifically mentions that; no current assets available at the side related to the project and the machinery is not installed at the project which is financed by SIDBI . The document produced by defendant no.4 is the direct answer to the contents of the panchnama prepared by the officers of the appellant on 11.10.2006 which suggests that these machineries of Palsont Company were purchased by M/s. Surgical Extrusion and not by defendant no.1 Mr. Rajeev Zaveri in capacity of director of M/s. Tirthesh Aluminium Pvt.Ltd.
Valuable Vintage cars are lying inside the Shed in question. If the Court allows the appeal and rejects the application granted by the lower court, it is likely to result into great permanent loss. It is rightly submitted that the motor cars lying in the Shed are not routine motor cars which are available in the market. So, loss would be a loss which cannot be compensated in terms of money. Replacement of such Vintage cars may not be impossible, but may create number of difficulties, inconvenience and would need huge finance. Even then, it is very likely that the plaintiff may not be put to status-quo ante position. The offer made by Mr. Panesar on behalf of the appellant SIDBI that the plaintiff may take away his cars and other materials lying in the Shed in question and appellant would cooperate in shifting all these materials also would not help the appellant and such offer would not take away the point of balance of convenience which is in favour of the plaintiff. The learned Chamber Judge was supposed to evaluate the prima facie case and balance of convenience. As discussed above, loss the plaintiff apprehends is the loss which cannot be compensated in terms of money even by efforts.
For short, the learned trial Judge, while allowing the Notice of Motion has taken into account all three vital aspects and has reached to legal, reasonable and just conclusion.
There is no element of error which can be said to be jurisdictional error or legal error as the Court is not in agreement with the argument advanced by Mr. Panesar that the plaintiff is entitled to initiate action to protect its interest in the proceedings initiated by the appellant SIDBI.
Before parting with the order, it is necessary to observe that two different suits are filed for two different reliefs which interwoven with certain common relevant issues and finding in one suit shall have impact on the other. Normal rule of law is that the record of one proceeding cannot be looked into in another legal proceedings, but when the Court is dealing with supplementary proceeding drawn under Order 39 Rule 1 and 2 read with Section 151 of CPC, it is permissible for either party to make use of admissions made, documents produced and the evidence led in other relevant suit and therefore, the learned lower court has rightly referred to pendency of other relevant suit and reliefs prayed therein, i.e. Civil Suit No. 1530 of 2007 filed by Dinesh @ Dilip K. Patel. Here in the case on hand, position is little bit different, because, the plaintiff had produced relevant record of that other suit filed by defendant no.4 Dinesh @ Dilip K. Patel and therefore, the learned trial court was legitimate in peeping into the pleadings of the parties of that suit, more particularly, in the plaint and the reliefs prayed therein. Thus, from all angles, the order under challenge is found legal and proper.
As per settled legal position, jurisdiction of the Court dealing with the Appeal From Order is comparatively limited than that of the Court hearing an appeal preferred under Sec.96 of CPC assailing the judgment, and the findings arrived at by the Court dealing with the appeal under Order 43 of the Code are tentative findings in supplementary proceedings that would merge in the ultimate finding and therefore only, legal requirement for the plaintiff to get interim relief is to establish prima facie arguable case. In the present case, the plaintiff has successfully established that case and therefore, the learned trial Judge was right in allowing the Notice of Motion. There is no need even to modify the order under Challenge. On the contrary, the appellant should be directed to open the seal within 5 clear working days from the date of pronouncement of the present order failing which the plaintiff should be permitted to get the order executed with the machinery of the lower court so that the court machinery can open the lock and hand over possession of the suit Shed.
Here, it is necessary for the Court to observe that to get the order executed, the plaintiff shall have to file an undertaking before the lower court to the effect that if the plaintiff fails in the suit and is directed to hand over possession of the suit Shed to the appellant SIDBI, then, he shall hand over peaceful and vacant possession of the Shed within 30 days from the date of the outcome of the suit and shall not wait for formal order of execution. The Appeal From Order No. 277 of 2008 is hereby dismissed.
The appellant SIDBI, earlier challenged the order dated 18.7.2007 by filing Appeal From Order No. 324 of 2007 before this Court. After the hearing, this Court admitted the said Appeal From Order and also passed order dated 7.7.08 directing the learned Chamber Judge to hear and decide Notice of Motion Exhs. 6/7 filed by the plaintiff of Civil Suit No. 2035 of 2006. Thus, when the Appeal From Order No. 324 of 2007 admitted earlier by this Court remained pending before this Court and the learned Chamber Judge, in compliance of the order passed by the High Court decided the controversy by dealing with the Notice of Motion exhs. 6/7, only formal order is required to be passed in the Appeal From Order No. 324 of 2007 that A.O. No.324 of 2007 automatically stands dismissed for the similar reasons that have been assigned by this Court while dealing with Appeal From Order No. 277 of 2008.
[C.K. BUCH, J.] FURTHER ORDER:
Mr. Panesar, learned counsel appearing for the appellant Bank submitted that the appellant Bank would like to approach the higher forum and therefore, the present judgment and order may be stayed, otherwise, it may result into serious prejudice, more particularly, in the background of the fact that this Court has directed the appellant Bank to open seal of the suit Shed within 5 [Five] working days from today.
Keeping in mind the totality and time spent by the Courts in dealing with the present appeals, the appellant Bank is granted time up to 14th May, 2009 to obtain appropriate order from the higher forum. In the meanwhile, operation of the present judgment and order, shall remain under suspension. It is clarified that there shall be no further extension.
[C.K. BUCH, J.] pirzada/-