Gujarat High Court
Ashokbhai Shankar Chaudhary & vs Jayendra Virendra Sharma & on 22 July, 2014
Author: S.H.Vora
Bench: S.H.Vora
C/AO/196/2014 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
APPEAL FROM ORDER NO. 196 of 2014
With
CIVIL APPLICATION NO. 4792 of 2014
In
APPEAL FROM ORDER NO. 196 of 2014
With
APPEAL FROM ORDER NO. 197 of 2014
With
CIVIL APPLICATION NO. 4793 of 2014
In
APPEAL FROM ORDER NO. 197 of 2014
================================================================
ASHOKBHAI SHANKAR CHAUDHARY & 1....Appellant(s)
Versus
JAYENDRA VIRENDRA SHARMA & 1....Respondent(s)
================================================================
Appearance:
MS TRUSHA K PATEL, ADVOCATE for the Appellant(s) No. 1 - 2
MR YN OZA FOR MR S P MAJMUDAR, ADVOCATE for the Respondent(s)
No. 1
MR TATTVAM K PATEL, ADVOCATE for the Respondent(s) No. 2
================================================================
CORAM: HONOURABLE MR.JUSTICE S.H.VORA
Date : 22/07/2014
ORAL ORDER
1. Challenge in both these Appeal from Orders is the order dated 31.03.2014 passed by the learned 3 rd Additional Senior Civil Judge, Vadodara below Exhs.5 and 37 in Special Civil Suit No.263 of 2010 whereby, the learned trial Judge by allowing both the injunction applications Exh.5 and 37, directed the parties to the suit to maintain status quo position qua title and Page 1 of 15 C/AO/196/2014 ORDER possession of the property bearing Revenue Survey No.544/3 admeasuring 19260 sq.ft. including constructed property, more particularly, described in plaint para 10 (for short, the 'suit property').
2. The parties to the present proceedings would be referred to as per their original status in the plaint for convenience.
3. I have heard submissions of learned advocate Ms.Trusha Patel for the defendant Nos.2 and 3 - appellants herein, learned Senior Counsel Mr.Y.N. Oza appearing for learned advocate Mr.S.P. Majmudar for the plaintiff - respondent No.1 and learned advocate Mr.Tattvam K. Patel for defendant No.1- respondent No.2.
4. Briefly stated, the suit property originally owned by Mr.Gnanendra Sharma and Mr.Vijendra Sharma. Upon demise of Mr.Vijendra Sharma, the plaintiff became co-sharer of the suit property with Mr.Gnanendra Sharma. It is also a matter of fact that said Mr.Gnanendra Sharma expired and, therefore, his son i.e. defendant No.1 succeeded/acquired ½ share in the suit property. In nutshell, the plaintiff and defendant No.1 became co-sharers of the suit property and both were holding ½ undivided share in the suit property. It is the case of the defendant Nos.2 and 3 that they have purchased undivided ½ share in the suit property from defendant No.1 vide Registered Sale Deed dated 28.10.2010 and they have paid Rs.32 lacs to the defendant No.1. Prior to it, the plaintiff and defendant No.1 entered into an Agreement to Sale on 07.03.2007 for consideration of Rs.15 lacs wherein, the defendant No.1 agreed to sale his undivided ½ share to the plaintiff and received part payment of Rs.1,50,000/- by way of cheque. It is Page 2 of 15 C/AO/196/2014 ORDER the case of the plaintiff that the plaintiff and defendant No.1 are cousin brothers and the plaintiff paid further Rs.50,000/- and thereafter, he was put into possession of the entire suit property by defendant No.1. As the defendant No.1 was trying to transfer the suit property to the third party, the plaintiff filed a suit for specific performance of the Sale Agreement dated 07.03.2007. Pending hearing of the suit, as the defendant No.1 sold ½ undivided share of the suit property to the defendant Nos.2 and 3 by virtue of Registered Sale Deed dated 28.10.2010, the plaintiff also amended the plaint, inter alia, sought further relief to cancel the said sale deed executed by the defendant No.1 in favour of defendant Nos.2 and 3 on 28.10.2010. Pending hearing of the suit, the plaintiff filed an injunction application Exh.5, inter alia, praying to restrain the defendants to transfer the suit property to the third party. Before hearing of the injunction application Exh.5 commences and concludes, the defendant No.1 sold his ½ undivided share to the defendant Nos.2 and 3 and, therefore, the plaintiff was compelled to file injunction application Exh.37 restraining defendant Nos.2 and 3 from transferring, assigning, gifting, leasing or mortgaging the suit property and further restraining defendant Nos.2 and 3 from dispossessing the plaintiff from the suit property.
5. After considering the pleadings and submissions made at bar, the learned trial Judge accepted the plaintiff's injunction applications filed below Exh.5 and 37 and directed both the parties to maintain status quo position of title and possession qua the suit property.
6. While assailing the impugned order, learned advocate Page 3 of 15 C/AO/196/2014 ORDER Ms.Trusha Patel for the defendant Nos.2 and 3 submitted that the defendant Nos.2 and 3 are transferee/purchasers pendente lite and as they are bona fide purchasers, they are protected under Section 19 of the Specific Relief Act against specific performance of prior sale agreement. It is submitted by her that as per condition Nos.2,3,4 and 8 of the Sale Agreement dated 07.03.2007, the plaintiff was to be put into possession only upon execution of sale deed. It is further submitted that the plaintiff was required to pay balance consideration to the defendant No.1 after three months of mutation entry to be effected in the revenue records and as the plaintiff has failed to pay balance consideration on or before 29.12.2009, as mutation was effected on 24.09.2009, the plaintiff is not entitled to any discretionary relief in his favour. It is submitted by her that vide public notice dated 15.02.2010, the defendant No.1 has cancelled the Sale Agreement dated 07.03.2007 as the plaintiff failed to pay balance consideration within time fixed in the agreement. It is submitted by her that the defendant Nos.2 and 3 before entering into sale deed published public notice for title clearance on 02.03.2010. It is further submitted by her that the plaintiff cannot claim exclusive possession for the suit property as the plaintiff and defendant No.1 are holding ½ undivided share in the suit property as they are joint possessor of the suit property. In nutshell, it is submitted by learned advocate Ms.Patel that the plaintiff failed to perform his part of sale agreement and defendant Nos.2 and 3 being bona fide purchasers of ½ undivided share in the suit property, the learned trial Judge ought not to have injuncted the defendant Nos.2 and 3 from transferring their right, title and interest in the suit property pending trial. In support of her factual and legal submissions, Page 4 of 15 C/AO/196/2014 ORDER learned advocate Ms.Patel pressed into service decision of the Hon'ble Apex Court rendered in the case of Gujarat Electricity Board, Gandhinagar V/s. M/s.Maheshkumar & Co., Ahmedabad reported in AIR 1982 Gujarat 289 for the submission that temporary injunction under Order 39 Rule 2 cannot be granted on mere possibility of multiplicity of judicial proceedings and it is not a relevant consideration. Learned advocate Ms.Patel also relied upon the decision of the Hon'ble Apex Court rendered in the case of Thomson Press (India) Limited V/s. Nanak Builders and Investors Private Limited and others reported in (2013)5 SCC 397 for the proposition of law that sale of immovable property is immune from specific performance of prior sale agreement only if transferee has acquired title for valuable consideration, in good faith and without notice of prior agreement. Further, the transfer/sale pendente lite would remain valid between the parties thereto subject to any directions which competent Court may issue in the suit against vendor in light of the provisions contained in Sections 52 and 54 of the Transfer of Property Act.
7. Per contra, learned Senior Counsel Mr.Y.N. Oza appearing for learned advocate Mr.S.P. Majmudar for the plaintiff submitted that the learned trial Judge has rightly directed both the parties to maintain status quo position of title and possession qua the suit property as the defendants failed to make out a case of irreparable loss or damage. It is also submitted that the defendant Nos.2 and 3 have also filed Special Civil Suit No.342 of 2013 against the present plaintiff for partition and other ancillary reliefs and also moved an injunction application against the plaintiff not to disturb enjoyment of ½ share in the suit property. The learned trial Page 5 of 15 C/AO/196/2014 ORDER Judge refused the injunction application filed by the defendant Nos.2 and 3 and such order is also confirmed by this Court vide order dated 06.05.2014 passed in Appeal from Order No.195 of 2014. Thus, relying upon the decision of the Hon'ble Apex Court rendered in the case of Maharwal Khewaji Trust (Regd.), Faridkot V/s. Baldev Dass reported in AIR 2005 SC 104 and the order passed by this Court in Appeal from Order No.195 of 2014, learned Senior Counsel Mr.Oza submitted that no case is made out to interfere with the findings recorded by the learned trial Judge as no perversity is pointed out in the impugned order and also considering limited scope of Order 43 Rule 1(r) of the Code of Civil Procedure, the present appeals are required to be dismissed.
8. Considering the facts and submissions made at bar and the case laws cited at bar, it is a fact that the defendant Nos.2 and 3 purchased ½ undivided share in the suit property from the defendant No.1 by Registered Sale Deed dated 28.10.2010. Prior to execution of sale deed, defendant Nos.2 and 3 were made aware about existence of sale agreement executed by defendant No.1 in favour of the plaintiff through public notice. So, at this stage, it cannot be said that defendant Nos.2 and 3 have entered into sale transactions with defendant No.1 without notice of prior sale agreement. So, at this stage, it cannot be inferred that the defendant Nos.2 and 3 are the bona fide purchasers as provided under Section 19-B of the Specific Relief Act so as to non-suit the plaintiff at threshold. It is an admitted fact that the defendant Nos.2 and 3 have also filed a suit for partition and other ancilliary reliefs against the plaintiff and in the said suit, defendant Nos.2 and 3 moved an injunction application against the plaintiff restraining Page 6 of 15 C/AO/196/2014 ORDER them not to disturb enjoyment of ½ share in the suit property and such other reliefs. Such injunction application came to be refused by the learned trial Judge and when the said order was carried before this Court by way of Appeal from Order No.195 of 2014, this Court also refused to grant relief as sought for by the defendant Nos.2 and 3.
9. It is an undisputed fact that the suit property has not been partitioned actually and physically till date. Therefore, co- sharer i.e. defendant No.1 cannot put the defendant Nos.2 and 3 in possession of suit property. In this connection, it is suffice to refer to the principles laid down by the Hon'ble Apex Court in case of Ramdas Vs. Sitabai and others reported in AIR 2009 SC 2735. In nutshell, right of defendant Nos.2 and 3 to possess ½ part in the suit property would commence from the date when specific allotment would be made in their favour at the end of the trial of Special Civil Suit No.342 of 2013 and, therefore, defendant Nos.2 and 3 cannot be handed over possession of any specific part of the suit property unless the suit property is partitioned by metes and bounds amicably or through mutual consent or by decree of the Court. It is also admitted fact that the plaintiff is holding ½ undivided share in the suit property and for rest of ½ undivided share of the defendant No.1, the plaintiff is holding sale agreement in his favour.
10. Now coming to the submission made by learned advocate Ms.Patel to the effect that the defendant Nos.2 and 3 cannot be prevented from transferring their right, title and interest in the suit property because of possibility of multiplicity of judicial proceedings and in this connection, decision of the Hon'ble Page 7 of 15 C/AO/196/2014 ORDER Apex Court rendered in the case of Gujarat Electricity Board (supra) is not helpful to the defendant Nos.2 and 3 for the simple reason that in the facts and circumstances before the Court in the said case, it was found that mere possibility of multiplicity of judicial proceedings is not a relevant consideration. In the case on hand, the plaintiff has made out a case that the defendant Nos.2 and 3 should not be permitted to further transfer ½ undivided share in the suit property as it would result into irreparable loss. A case of irreparable loss or damage once made out by the plaintiff to the suit which also includes alienation or transfer of the property which may lead to loss or damage being caused to the plaintiff who may ultimately succeed and may further lead to multiplicity of proceedings. In the instant case, the plaintiff has successfully established that the defendant Nos.2 and 3 are not bona fide purchasers of ½ undivided share of the defendant No.1 in the suit property and more so, defendant Nos.2 and 3 have failed to obtain injunction order against the plaintiff in a suit for partition filed by them. In this connection, it is useful to refer to the observations made by the Hon'ble Apex Court in the case of Maharwal Khewaji Trust (supra), more particularly, para 10 thereof which reads as under:-
"10. Be that as it may, Mr. Sachhar is right in contending that unless and until a case of irreparable loss or damage is made out 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 Page 8 of 15 C/AO/196/2014 ORDER 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. Now, so far as the decision rendered in the case of Thomson Press (India) Limited (supra) is concerned, the said decision is not helpful to the defendant Nos.2 and 3 at this stage for the simple reason that this Court has found that the defendant Nos.2 and 3 are not bona fide purchasers of ½ undivided share in the suit property. So, in view of this decision it is futile that specific performance, as prayed for by the plaintiff, was and continues to be enforceable not only against the defendant No.1 but also against the defendant Nos.2 and 3 i.e. transferees. Needless to say here that the sale of immovable property in the teeth of an earlier Agreement to Sale is immune from specific performance of an earlier contract for sale only if the transferee has acquired title for valuable consideration, in good faith and without notice of the original contract i.e. sale agreement dated 07.03.2007. It is an admitted fact that the plaintiff by public notice published in the newspaper on 13.05.2010, disclosed existence of Sale Agreement dated 07.03.2007 in his favour. So, in view of the provisions contained in Section 19-B of the Specific Relief Act, it is not gainsaid that the plaintiff was not protected against Page 9 of 15 C/AO/196/2014 ORDER specific performance of the contract or even though the defendant No.1 transferred his ½ share in the suit property in favour of the defendant Nos.2 and 3 for valuable consideration as it was not in good faith nor was it without notice of the pre- existing sale agreement dated 07.03.2007. In light of this fact, defendant Nos.2 and 3 would have the defences that were available to the defendant No.1. It may be true that the plaintiff failed to pay the balance consideration on or before 29.12.2009 i.e. the date fixed in the sale agreement. Normally, in the contract relating to immovable property, time cannot be essence of contract and the time stipulated in performance even if expressly read and shown to be the essence required to be read as not being essence of contract and consequently, the contract relating to immovable property does not become terminable by failure to perform before specified time. Thus, it cannot be accepted that as the plaintiff failed to pay balance consideration, defendant No.1 has rightly terminated sale agreement by public notice dated 16.02.2010. Apart from it, whether time was essence of the contract or not is a question to be tried as defendant No.1 approached in the month of February, 2010 with request to pay balance consideration. So, in light of these facts, it cannot be accepted that the plaintiff's sale agreement dated 07.03.2007 is no more in existence as submitted by learned advocate Ms.Patel. Therefore, there is no substance in the said contention so raised that the sale agreement dated 07.03.2007 in favour of the plaintiff is terminated.
12. It is required to be kept in mind that the present Appeal from Order is filed under the provisions of Order 43 Rule 1(r) of the Code and challenge in this appeal is a discretionary order Page 10 of 15 C/AO/196/2014 ORDER passed by the learned trial Judge under the provisions of Order 39 Rules 1 and 2 of the Code. In case of Matrix Telecom Pvt.Ltd. V/s. Matrix Cellular Services Pvt. Ltd. reported in 2011(3) GLR 1951, this Court, in paras 6 and 6.1, observed as under:-
"6. Before proceeding further it is required to be noted that the present appeal is against the rejection of interim relief and the main suit is still pending. If this court elaborately deals with the matter on merits it is likely that the same would prejudice the case of either side. Therefore, it is well settled law that this Court is not required to go into the merits of the entire matter at this stage and what is required to be seen is whether the appellant-plaintiff has made out a prima facie case or not for grant of interim injunction.
6.1. It is required to be noted that it is well settled law that the Appellate Court may not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. The Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by the court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion."
13. Similarly, in the case of Wonder Ltd. and another V/s. Antox India Pvt. Ltd. reported in 1990 (Supp.) SCC 727, the Hon'ble Supreme Court in para 9 of the said decision, after considering the scope of Order 43 Rule 1(r) of the Code in an appeal wherein, the discretionary order passed by the learned trial Court is under challenge, observed as under:-
Page 11 of 15 C/AO/196/2014 ORDER"9. Usually, the prayer for grant of an interlocutory injunction is at a stage when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. The court, at this stage, acts on certain well settled principles of administration of this form of interlocutory remedy which is both temporary and discretionary. The object of the interlocutory injunction, it is stated "...is to protect the plaintiff against injury by violation of his rights for which he could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the "balance of convenience lies".
The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie. The court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted."
14. So, in light of the limited powers of this Court, the Appellate Court can interfere with the discretionary order passed by the trial Court only in exceptional circumstances and the Appellate Court cannot interfere with the exercise of discretion of the Court of first instance and substitute its own discretion except, where the discretion has been shown to have been exercised arbitrarily, capriciously or perversely or where the Court had ignored the settled principles of law Page 12 of 15 C/AO/196/2014 ORDER regulating grant or refusal of interlocutory injunctions. In nutshell, an appeal against exercise of discretion is said to be an appeal on principle. To put it differently, the Appellate Court cannot reassess the entire evidence so as to come to its own conclusion contrary to the conclusion arrived at by the trial Court, if two views are possible.
15. In the sum and substance, no case is made out so as to infer that the learned trial Judge has exercised discretion arbitrarily or perversely or ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. Thus, the Appellate Court cannot reassess the entire evidence so as to come to its own conclusion contrary to the conclusion arrived at by the trial Court for taking second view as suggested by learned advocate Ms.Patel to the effect that multiplicity of judicial proceedings is not a relevant consideration in view of the decision rendered in the case of Gujarat Electricity Board (supra).
16. At this stage, learned advocate Ms.Patel urged that the learned trial Judge may be directed to consolidate both the suits i.e. Special Civil Suit Nos.342 of 2013 and 263 of 2010 since the subject matter is the same in both the suits. She further submitted that the learned trial Judge may be directed to expedite hearing of the suit so that lis involved in the present suit may be put to an end at the earliest point of time. Considering the request made at bar, defendant Nos.2 and 3 are at liberty to move the trial Court for both the prayers so made at bar. As and when such prayer is made, the learned trial Judge shall consider the same, if think fit and proper, to grant the same.
Page 13 of 15 C/AO/196/2014 ORDER17. Lastly, learned advocate Mr.Tattvam Patel for the defendant No.1 tried to address the Court on the issue of legality and validity of the impugned order. The Court refrained him from addressing the Court as the defendant No.1 has not challenged the impugned order passed below Exh.5 and 37 and, therefore, defendant No.1 has no locus to challenge the impugned order without preferring appropriate proceedings in accordance with law.
18. While parting with the order, it is clarified that this Court has examined the impugned order passed by the learned trial Judge within the limited scope of provisions of Order 43 Rule 1(r) of the Code, whereas the main controversy involved in the suit is at large before the trial Court to be adjudicated through full-fledge trial. Therefore, the learned trial Judge shall not be influenced by any observations recorded in the impugned order and observations recorded by this Court hereinabove while deciding the suit at the end of trial. The findings recorded either by the trial Court or by this Court at interlocutory stage of the suit are tentative in its nature and the learned trial Judge shall decide the case on its merit and as per evidence that may be led during the course of trial and decide the suit in accordance with law.
19. In view of the above, no case is made out to interfere with the findings recorded by the learned trial Judge in the impugned order and, therefore, present appeals deserve to be dismissed and are accordingly dismissed.
Page 14 of 15 C/AO/196/2014 ORDEROrder in Civil Applications In view of the order passed in the Appeal from Orders, these applications do not survive and the same are also dismissed.
(S.H.VORA, J.) Hitesh Page 15 of 15