Madras High Court
B.K.Krishnamurthy vs S.Balasubramanian on 13 November, 2008
Author: S.J.Mukhopadhaya
Bench: S.J.Mukhopadhaya, P.R.Shivakumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 13.11.2008 C O R A M THE HONOURABLE MR.JUSTICE S.J.MUKHOPADHAYA AND THE HONOURABLE MR.JUSTICE P.R.SHIVAKUMAR O.S.A.Nos.4 and 5 of 2008 B.K.Krishnamurthy ... Appellant Vs. 1. S.Balasubramanian 2. Rajni Foundation Pvt. Ltd. ... Respondents These original side appeals have been preferred under Order XXXVI Rule 11 of Original Side Rules read with Clause 15 of Letters Patent as against the order of the learned single judge dated 01.10.2007 made in O.A.Nos.968 of 2007 and 969 of 2007 both in C.S.No.711 of 2007. For Appellant : Mr.R.Thiagarajan For Respondents : Mr.Arvind Pandian (R1) Mr.T.V.Vineethkumar (R2) COMMON JUDGMENT
(Judgment of the court delivered by Hon'ble Mr.Justice P.R.Shivakumar) Both the appeals have been preferred against the common order and decreetal orders of a learned single judge of this court dated 01.10.2007 made in O.A.Nos.968 of 2007 and 969 of 2007 both in C.S.No.711 of 2007 filed on the original side invoking the ordinary original civil jurisdiction of this court. The applicant/plaintiff in the above said applications is the appellant in both the OSAs.
2. The appellant in both the appeals has filed the suit C.S.No.711 of 2007 on the original side of this court invoking the ordinary original civil jurisdiction of this court praying for the following reliefs: 1) a declaration declaring the appellant to be the absolute owner of the property described in the plaint schedule, 2) a direction to the respondents/defendants to hand over vacant possession of the suit property, 3) a permanent injunction restraining the respondents/defendants from alienating the suit property in favour of any third party and 4) a permanent injunction restraining the respondents/defendants from putting up any construction in the suit property. The property described in the plaint schedule is an undivided half share in the vacant site bearing commercial plot No.R-11, 40 Feet Road, TNUDP scheme of Velacherry comprised in Survey No.123 (part) of Velacherry village admeasuring 8 grounds and 50 sq.ft.
3. Along with the plaint, the appellant had also filed two applications in O.A.No.968 of 2007 and O.A.No.969 of 2007 had been filed for an order of interim injunction restraining the respondents from putting up any construction in the property described in the plaint schedule and O.A.No.969 of 2007 had been filed for an order of interim injunction restraining the respondents from alienating the suit schedule property pending disposal of the suit. The above applications, after service of judge's summons on the respondents, came up before a learned single judge of this court (Mrs.Justice Prabha Sridevan) for hearing and the learned single judge, after hearing both sides, dismissed both the applications by a common order dated 01.10.2007.
4. Questioning the correctness of the common order and decreetal orders made in the said applications, the appellant has preferred the original side appeals namely O.S.A.Nos.968 of 2007 and 969 of 2007 under Order XXXVI Rule 11 of Original Side Rules read with Clause 15 of Letters Patent Act, on various grounds set out in the grounds of appeal.
5. The averments made by the appellant in the affidavits filed in support of the applications, in brief, are as follows:-
i) The property bearing commercial Plot No.R-11, 40 Feet Road, TNUDP Scheme of Velacherry (Survey No.123 (part) of Velacherry village) admeasuring an extent of 1835.65 square meters (8 grounds and 50 sq.ft.) was originally allotted in the name of S.Sundaram Pillai, father of the first respondent by the Tamil Nadu Housing Board by an allotment letter dated 06.09.1996 for a consideration of Rs.35,60,000/-. The said allottee, on 22.07.1999 entered into a joint venture agreement with the appellant/applicant for the purchase and development of the said property. Accordingly, each one of them paid to the Tamil Nadu Housing Board a sum of Rs.13,73,942/- towards part of the sale consideration and they also agreed to pay the balance sale consideration equally. The original allottee and the appellant also agreed between themselves to contribute equally for the development of the property and to share the profits in the ratio of 50:50. Subsequently, the appellant also paid 50% of the rest of the monthly installments, to be paid to the Tamil Nadu Housing Board towards his share, to the original allottee Sundaram Pillai.
ii) While so, the said Sundaram Pillai died on 01.03.2003 leaving behind him his wife, daughters and his son, the first respondent as his legal heirs. Consequent to the death of Sundaram Pillai, his other legal heirs swore an affidavit expressing no objection for the Tamil Nadu Housing Board executing the sale deed in favour of S.Balasubramanian, the first respondent and the first respondent in turn, entered into a deed of Memorandum of Understanding with the appellant reaffirming the joint venture agreement between the appellant and Sundaram Pillai. Based on the affidavit of the other legal heirs of Sundaram Pillai expressing no objection a sale deed executed by the Tamil Nadu Housing Board on 09.12.2003 in favour of the first respondent and the same was registered as document No.5566/2003 on 15.12.2003 in the office of the Sub Registrar, Velacherry. Though the sale deed was obtained in the name of the first respondent, in view of the joint venture agreement between the original allottee and the appellant and the subsequent deed of Memorandum of Understanding between the first respondent and the appellant, coupled with the fact that the appellant had contributed 50% towards the sale consideration for the purchase of the said property, the appellant has become entitled to an undivided half share in the above said suit property.
iii) While so, the appellant came to know that the first respondent in utter disregard to the joint venture agreement as well as the Memorandum of Understanding, was taking hasty steps to alienate the suit property, pursuant to which the appellant was constrained to issue a lawyer's notice dated 14.05.2007 calling upon the first respondent to desist from taking such steps. The first respondent, who received the said notice on 19.05.2007, did not send any reply and hence the appellant caused a public notice to be published in the newspaper "Dhina Thanthi" dated 16.05.2007 and "The Hindu" dated 20.05.2007. While so, on 26.07.2007, the appellant came across the sign board of the second respondent exhibited in the suit property advertising that residential apartments consisting of 2 and 3 bed rooms were proposed to be constructed. Under such circumstances, the appellant had to come to the court with the above said suit for the reliefs mentioned supra and the applications for injunction 1) not to alienate and 2) not to put up any constructions.
6. Both the applications were resisted by the first respondent by filing a common counter affidavit, the contents of which, in brief, are as follows:-
a) The suit and the applications for interim injunctions are not maintainable either in law or on facts and hence they are liable to be dismissed in limini with exemplary costs. The property described in the plaint schedule, namely Plot No.R-11, 40 Feet Road, TNUDP Scheme of Velacherry (Survey No.123 (part) of Velacherry village, admeasuring 8 grounds and 50 sq.ft.) was originally allotted to late S.Sundaram Pillai, the father of the first respondent by the Tamil Nadu Housing Board vide their letter AMB/A1/R-11/96 dated 06.09.1996 for a sale consideration of Rs.35,60,000/-.
b) Pursuant to the said allotment, possession of the plot was handed over to Sundaram Pillai on 05.09.2002. Thereafter, the said Sundaram Pillai died on 03.01.2003. Since the first respondent happened to be the sole male legal heir of Sundaram Pillai, he filed an affidavit. The other legal heirs swore an affidavit expressing no objection for the Housing Board executing the sale deed in favour of the first respondent. Since the entire consideration was paid, the sale deed was executed on 09.12.2003 by the Tamil Nadu Housing Board in favour of the first respondent and the same was registered on 15.12.2003 as document No.5566/2003, on the file of Sub Registrar, Velacherry. Ever since the execution of the said sale deed, the first respondent has become the absolute owner of the suit property and he alone is in enjoyment of the same.
c) The first respondent had taken cash loans from the appellant for personal purposes for which he had given a promissory note, signed blank stamp papers and other blank papers as security for the repayment of the said loan. However, the said amount was entirely repaid in March 2003 itself. However, when he asked for the return of the papers given as security for the loan, the appellant informed him that he had lost them. In view of the good relations they had in the past, the first respondent believed the words of the appellant and kept quiet. Thereafter having waited for about four years, the appellant suddenly has come forward with the plaint and the applications which are barred by limitation. The first respondent did not enter into any Memorandum of Understanding and if there is any, the same should be a fabricated one. The alleged joint venture agreement between the appellant and the father of the first respondent should also be a fabricated one with a view to grab the property. The payment of Rs.13,73,942/- towards 50% of the initial payment of part of the sale consideration and the alleged payment of 50% of the balance monthly installments, are all false, which shall be obvious from the fact that the said payments are not supported by receipts and they are not found in the account books of either the appellant or the first respondent. Payments to the Housing Board was directly made from the account of the father of the first respondent and all the payments made to the Housing Board were shown to be made from his personal source in the income tax returns. All payment made to the Tamil Nadu Housing Board will be reflected in its records. If the records are called for and seen, it shall be obvious that all payments were made by the first respondent's father only from his own source.
d) The first respondent being the lawful and rightful owner of the property, has sold the same to the second respondent for development and on seeing the on-going real estate boom, the appellant, in an attempt to make use of the opportunity and play fraud on the respondents, has fabricated documents. The sale of the property to the second respondent in the month of February itself was very much known to the appellant. However, three months thereafter, only on 14.05.2007, the appellant chose to send a lawyer's notice. As the first respondent had no clue regarding the alleged deed of Memorandum of Understanding, he could not send a reply immediately. Meanwhile the appellant rushed to the court and on seeing the typed set of papers, the first respondent sent a reply on 04.08.2007 to the appellant's notice making it clear that the first respondent was the absolute owner of the suit property and that the claim of co-ownership made by the appellant was baseless and unlawful and with ulterior motive. The appellant has come to the court with unclean hands. He has not made out any prima facie case for grant of interim injunction. The balance of convenience is in favour of the respondents and not in favour of the appellant. Hence both the applications for injunction should be dismissed with cost.
7. The second respondent has filed a separate common counter affidavit in both the applications contining the following averments:-
a) The averments contained in the affidavits filed in support of the original applications are denied and the appellant is put to strict proof of the said allegations. The suit as well as the injunction applications are not maintainable either in law or on facts. The second respondent paid a sum of Rs.2,40,00,000/- to the first respondent on 08.02.2007 towards entire sale consideration in respect of the suit property and on the same day, the first respondent executed a memorandum of sale and also a power of attorney appointing the second respondent as his agent empowering him to deal with the said property in all respects, as it was the usual practice of the property developers to get Power of Attorney from the owners of the property since they have to sell the property as undivided shares to various purchasers of flats. The averments found in the affidavit regarding the lawyer's notice sent to the first respondent and the subsequent paper publications are not known to the second respondent. After making payment of the entire sale consideration, the second respondent collected all the original title deeds regarding the suit property from the first respondent on 08.02.2007 itself. By virtue of the memorandum of sale and power of attorney, the second respondent fixed a display board on 26.07.2007, being an auspicious day. According to Vasthu Sastra within two days thereafter, namely on 28.07.2007 the second respondent received a telegraphic message from the appellant and immediately the second respondent contacted the first respondent, ascertained the facts from him and thereafter filed a caveat petition.
b) As per the information received from the first respondent, the appellant was only a money lender and he had already received the entire principal amount advanced by him to the father of the first respondent with usurious interest and there was no further liability to pay any money to the appellant. The first respondent also guaranteed that he would see no harm or damage was caused to the second respondent. The appellant does not have any right, title or interest over the suit property and he is also not in possession of the same. The appellant can work out his remedy if he is entitled to any, only against the first respondent since it was only a money transaction. The second respondent being the purchaser, having purchased for a valuable consideration without any prior notice of the alleged transaction between the plaintiff and the first respondent and having invested more than three crores of rupees, should not be allowed to suffer any loss at the instance of the appellant.
c) The allegations that the appellant is a co-owner is quite baseless and is nothing but a misnomer. The claim of the appellant to be a co-owner is unsustainable in law. The prayer for a declaration that the appellant is the absolute owner of half of the suit property and for recovery of possession is not maintainable in law. The suit filed by the appellant is nothing but an attempt to extract money from the respondents. If any injunction is granted, the second respondent will be put to serious prejudice and hardship. The balance of convenience is in favour of the second respondent and therefore, both the applications should be dismissed with exemplary costs.
8. Based on the said pleadings, the parties went for an enquiry before the learned single judge and after enquiry, the learned single judge came to the conclusion that the appellant was not entitled to the relief of interim injunction claimed in any one of the applications, namely O.A.Nos.968 and 969 of 2007 and accordingly, by a common order dated 01.10.2007 dismissed both the applications.
9. The correctness of the said order is challenged in these original appeals by the appellant who figured as the applicant/plaintiff.
10. This court heard the arguments advanced by Mr.R.Thiagarajan, learned counsel for the appellant, Mr.Arvind Pandian, learned counsel for the 1st respondent and Mr.T.V.Vineethkumar, learned counsel for the 2nd respondent. The materials available on record were also perused.
11. In a miscellaneous application seeking interim relief pending disposal of the suit, in order to succeed, the applicant should prove: 1) that he has got prima facie case and 2) that the balance of convenience lies in his favour.
12. In this case the learned counsel for the appellant, in his arguments, contended that the appellant had made out a prima facie case; that the appellant was a co-owner of the suit property having undivided half share in it by virtue of the joint venture agreement entered into with Sundaram Pillai, the father of the first respondent on 22.07.1999 and the memorandum of understanding between the appellant and the first respondent dated 21.01.2003; that the first respondent having made the appellant pay a huge sum of Rs.13,73,942/- as 50% of the initial payment and balance 13,73,942/- towards 50% of the subsequent monthly installments, should not be allowed to alienate or encumber the property so as to defeat the vested right of the appellant in respect of the suit property and that the same will be enough to show that the appellant had got a prima facie case and the balance of convenience was in his favour.
13. Per contra, the learned counsel for the respondents would contend that in view of the fact that the alleged payment of 50% of the sale consideration payable towards the Tamil Nadu Housing Board was disputed by the respondents, in the absence of any material like receipts evidencing such payment or the authenticated account books showing such payment, the court should hold that the appellant failed to establish a prima facie case of having made such payment and on that score alone the applications for injunction were liable to be dismissed.
14. It is the further contention of the learned counsel for the respondents that even assuming without admitting that such a payment was made, by no stretch of imagination, the same shall be construed as an act conferring title on the appellant in respect of an undivided half share of the suit property; that transfer of title in respect of an immovable property having a value of more than 100 rupees could be effected only by a registered document; that admittedly the property was conveyed by the Tamil Nadu Housing Board in favour of the first respondent herein and no deed of conveyance was executed either by the Tamil Nadu Housing Board or by the first respondent in favour of the appellant herein; that in such circumstances, the contention of the appellant that he had become a co-owner entitled to undivided half share of the suit property was legally untenable and that if at all the joint venture agreement and the memorandum of understanding projected by the appellant could be true, the same could confer only a right on the appellant to seek specific performance of contract and not a title in the immovable property, namely the suit property.
15. Regarding the question of balance of convenience also, the learned counsel for the respondents would contend that the first respondent being the admitted owner of the suit property and the second respondent being a person claiming right through the first respondent, the appellant could not legally maintain a claim for injunction against them in view of the celebrated principle that no injunction can be granted against the true owner.
16. Admittedly, the suit property bearing Plot No.R-11, 40 Feet Road, TNUDP Scheme of Velacherry (Survey No.123 (part) of Velacherry village) admeasuring an extent of 1835.65 square meters (8 grounds and 50 sq.ft.) was allotted to Sundaram Pillai, the father of the first respondent by letter No.AMB/A1/R-11/96 dated 06.09.1996 and the price fixed therein was Rs.35,60,000/-. It is also not in dispute that before ever the sale deed could be obtained from the Tamil Nadu Housing Board, the original allottee Sundaram Pillai died on 03.01.2003 leaving behind him his wife and daughters besides the first respondent (son) as his legal representatives. Since the first respondent happened to be the only male legal heir, all the female legal heirs expressed no objection for the Housing Board executing the sale deed in favour of the first respondent. As the entire sale consideration payable to the Tamil Nadu Housing Board was paid and the other legal heirs of Sundaram Pillai expressed no objection for the Tamil Nadu Housing Board executing the sale deed in favour of the first respondent, the sale deed was executed in favour of the first respondent on 09.12.2003 and the same was registered as document No.5566 of 2003 on 15.12.2003 on the file of Sub Registrar office, Velachery. A copy of the sale deed has also been enclosed in the typed set of papers. The appellant who claims to have title to a common undivided half share of the suit property, admittedly does not have any document to show that the same was conveyed to him in the manner known to law. On the other hand, he simply relies on the joint venture agreement dated 22.07.1999 allegedly entered into between the appellant and Sundaram Pillai, the father of the first respondent and the alleged Memorandum of Understanding dated 21.01.2003 between the appellant and the first respondent. The appellant also relies on the alleged payment of 50% of the sale consideration payable to the Tamil Nadu Housing Board in support of his claim that by virtue of the said joint venture agreement and the Memorandum of Understanding he has become the co-owner of the suit property entitled to an undivided half share in it. It is the clear case of the respondents that the entire amount paid by the Sundaram Pillai, the father of the first respondent was shown to be paid out of his own funds from his personal account. It also reflected in the income tax returns. On the other hand the appellant has not produced any other document except the said joint venture agreement to prove payment of half of the sale consideration. The documents like receipt for payment, the account books showing such payment and the income tax returns have not been produced.
17. The appellant in paragraph 3 of the plaint has made the following averments:-
"thereafter on 22.07.1999 the first defendant's father Sundaram Pillai, entered into a Joint venture agreement with the plaintiff for the purchase and development of the above said property and a sum of Rs.13,73,942/- was paid by each of them to the Tamil Nadu Housing Board towards part of the sale consideration and also agreed to pay balance sale consideration equally and to contribute for the development of the property in the ratio of 50:50 and share the profits and gains equally".
The said averment tends to imply that 50% of the initial payment of sale consideration amounting to Rs.13,73,942/- was paid by the appellant to the Tamil Nadu Housing Board. There is no document to show that such a payment was made by him to the Tamil Nadu Housing Board. The averment found in the plaint as well as the affidavit filed in support of the applications are to the effect that the entire amount of Rs.13,73,942/- was paid to the Tamil Nadu Housing board at one stroke. On the other hand, from the alleged joint venture agreement it has been stated that a total advance amount of Rs.8,90,000/- was paid by the original allottee Sundaram Pillai in two spells, at the first spell Rs.3,67,128/- as initial payment and at the second spell as further advance Rs.5,22,872/-; that for the said total amount the original allottee and the appellant contributed equally and that apart from the said advance, a sum of Rs.18,57,854/- was paid as 28 monthly installments at the rate of Rs.66,353/-, totaling a sum of Rs.27,47,884/- which includes interest for the monthly installments. Only out of the said total sum of Rs.27,47,884/- the contribution of the appellant is stated to be Rs.13,73,942/-. Therefore, the averment made in paragraph 3 of the plaint as if the said amount of Rs.13,73,942/- was paid on 22.07.1999 towards part of the sale consideration does not seem to be a sound one, according to the submissions made by the learned counsel for the respondents.
17. Be that as it may, we are not supposed to go into the question whether the payment of the said sum allegedly made is true or false at this stage. On the other hand, the above said discrepancies have been pointed out to show that the appellant does not have a prima facie case. The learned counsel for the respondents have also pointed out the fact that the plaint and affidavits are silent about the actual amount paid subsequent to the date of the alleged joint venture agreement and the dates on which such payments were made. The learned counsel for the respondents have also pointed out the fact that the appellant has not even produced any receipt to show payment of any amount subsequent to the above said alleged joint venture agreement. All these factors are to be taken into account, as rightly pointed out by the learned counsel for the respondents, to arrive at a conclusion whether the appellant has got a prima facie case regarding the derivation of title under the alleged joint venture agreement and the Memorandum of Understanding. Even assuming that the joint venture agreement dated 22.07.1999 and the Memorandum of Understanding dated 21.01.2003 are true and valid and that the appellant has made out a prima facie case regarding the genuineness and validity of the said joint venture agreement and the Memorandum of understanding, as rightly contended by the learned counsel for the respondents, they are not sufficient to make out a prima-facie case that the appellant is a co-owner of the suit property or that the petitioner has derived any title in respect of the suit property. The rights conferred under the said joint venture agreement and the Memorandum of Understanding, by no stretch of imagination shall be construed to confer any title on the appellant in respect of the suit property. At best the appellant shall have a right to specifically enforce the terms of the contracts contained in the said documents against the first respondent or any one claiming under him. A cursory glance at the above said documents will make it clear that the proper course to be adopted by the appellant, who is admittedly not in possession of the suit property, is to seek specific enforcement of the contract and not for declaration of the supposed title of the appellant in the suit property and for injunction. In fact in the impugned order itself, the learned single judge has pointed out the relevant clause in the alleged joint venture agreement dated 22.07.1999, on which the appellant bases his reliance, to be one creating a personal against the other party to the said agreement and not a right or title in the immovable property.
18. Clause '8' of the joint venture agreement dated 22.07.1999 reads as follows:-
" 8. It is further agreed between the parties that after obtaining sale deed in favour of the party of the first part, namely Sri.S.Sundaram Pillai, if any change is required in the ownership of the said commercial plot No.R-11, the same will be decided by the parties hereto subsequently".
19. Relying on the said clause, the learned single judge has rightly observed that the said clause reflects a consensus between the parties that the title of the property after obtaining the sale deed from the Tamil Nadu Housing Board would vest with the allottee S.Sundaram Pillai and that if any one of the parties wanted a change in the ownership, the same would be decided subsequently by the parties to the said joint venture agreement. The learned single judge has rightly observed that the title in respect of the suit property was yet to be conferred on the appellant and that the said state of affairs continued till the filing of the suit. Therefore, the findings of the learned single judge that the appellant has not made out a prima facie case for declaration of title and for recovery of possession and that the appellant shall not be entitled to the relief of interim injunction prayed for in either of the application Nos.968 of 2007 or 969 of 2007 do not warrant any interference.
S.J.MUKHOPADHAYA, J.
and P.R.SHIVAKUMAR, J.
20. We are also of the opinion that the appellant, instead of seeking specific enforcement of contract, has wrongly chosen to file the suit for declaration of supposed title in respect of the suit property and that the appellant has not made out a prima facie case by establishing that he has fair chances of success in the suit. We do concur with the reasons assigned by the learned single judge for coming to the conclusion that the appellant was not entitled to the relief of interim injunction as prayed for in Application Nos.968 of 2007 and 969 of 2007 both in C.S.No.711 of 2007.
21. For all the reasons stated above, both the appeals are bound to fail. There is no merit in either of the appeals and the appeals deserve to be dismissed.
22. In the result, O.S.A.Nos.4 and 5 of 2008 are dismissed. However, there shall be no order as to cost.
(S.J.M.J.) (P.R.S.J) 13.11.2008 Index : Yes Internet : Yes asr/ Pre-delivery judgment in O.S.A.Nos.4 and 5 of 2008