Karnataka High Court
Smt. Lakshmamma vs M/S. Huawei Technologies India Private ... on 28 June, 2023
Author: Alok Aradhe
Bench: Alok Aradhe
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF JUNE, 2023
PRESENT
THE HON'BLE MR. JUSTICE ALOK ARADHE
AND
THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE
COMMERCIAL APPEAL NO.143 OF 2022 (CPC)
BETWEEN:
1. SMT. LAKSHMAMMA
AGED ABOUT 71 YEARS
W/O LATE. SRI. R NARAYANA REDDY
2. SMT. HEMAVATHY
AGED ABOUT 51 YEARS
W/O. SRIVASA REDDY
3. SRI. NO VENKATESH REDDY
AGED ABOUT 50 YEARS
S/O. LATE. MR. R. NARAYANA REDDY
4. SMT. N SUJATHA
AGED ABOUT 46 YEARS
W/O. DR. KESHAV REDDY
5. SMT. N SHASHIKALA
AGED ABOUT 44 YEARS
W/O. DR. VISHWANATH
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6. SMT. N LAKSHMI
AGED ABOUT 36 YEARS
D/O. LATE. SRI. R. NARAYANA
7. SRI. VENKATASWAMY REDDY
AGED ABOUT 89 YEARS
S/O. LATE. SRI. DODDAMUNIYAPPA
8. SRI. V KODANDA REDDY
AGED ABOUT 67 YEARS
W/O SRI. VENKATASWAMY REDDY,
9. SMT. VEDAVATHY
AGED ABOUT 51 YEARS
W/O. SRI. V. KODANDA REDDY
10 . SRI. M R MUNI REDDY
AGED ABOUT 79 YEARS
S/O. LATE. SRI. RAMAIAH REDDY
11 . SMT. SARASWATHAMMA
AGED ABOUT 67 YEARS
W/O. SRI. M R MUNI REDDY
12 . SMT. M SUDHA
AGED ABOUT 49 YEARS
W/O. SRI. T ANAN,
13 . SMT. MANJULA
AGED ABOUT 47 YEARS
W/O. SRI. M LOKESH
14 . SRI. RAMA REDDY
AGED ABOUT 44 YEARS
S/O. SRI. M R MUNI REDDY
15 . SMT. SHOBHA
AGED ABOUT 39 YEARS
D/O. SRI. M R MUNI REDDY
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16 . SRI. BHUVENDRA REDDY
AGED ABOUT 37 YEARS
S/O. SRI. M R MUNI REDDY,
APPELLANTS NO.1 TO 16 ARE
REPRESENTED BY THEIR
GENERAL POWER OF ATTORNEY
HOLDER M/S. SHYAMARAJU &
COMPANY (INDIA) PRIVATE LIMITED
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT, 1956,
HAVING ITS REGISTERED
OFFICE AT DIVYASREE CHAMBERS
A WING, NO. 11, O SHAUGNESSY ROAD,
BENGALURU 560025,
REP BY ITS
CHAIRMAN AND MANAGING DIRECTOR
MS.P SHYAMARAJU
17 . M/S. SHYAMARAJU AND COMPANY
(INDIA) PRIVATE LIMITED
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT, 1956,
HAVING ITS REGISTERED
OFFICE AT DIVYASREE CHAMBERS
A WING, NO. 11, A-WING,
O'SHAUGNESSY ROAD, BENGALURU 560025,
REPRESENTED BY ITS
MANAGING DIRECTOR
MR. BHASKAR RAJU
... APPELLANTS
(BY SRI.ASHOK HARANAHALLI, SENIOR COUNSEL FOR
SMT.RASHMI DESHPANDE ADVOCATE A/W
SRI.RAJATH ARIGA, ADVOCATE FOR
SRI.YESHU BABA R MISHRA ADVOCATE)
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AND:
M/S. HUAWEI TECHNOLOGIES INDIA PRIVATE LIMITED
A COMPANY INCORPORATED
UNDER THE COMAPNIES ACT, 1956,
HAVING ITS REGISTERED OFFICE AT
SY NO. 36/3, 37,45/1,45/2,45/3,
45/4, 47/1, 47/2, 137, K NO 1540,
KUNDALAHALLI VILLAGE,
BENGALURU 560037,
REPRESENTED BY ITS
AUTHORIZED SIGNATORY
MR. OMESH RAINA
... RESPONDENT
(BY SRI.G.L.VISHWANATH SENIOR COUNSEL FOR
SRI JOSEPH ANTHONY, ADVOCATE)
THIS COMMERCIAL APPEAL IS FILED UNDER SECTION
13(1)(A) OF THE COMMERCIAL COURTS ACT, 2015 R/W
ORDER 43 RULE 1(R) OF THE CPC, PRAYING THAT THIS
HON'BLE COURT MAY BE PLEASED TO CALL FOR RECORDS
AND (A) SET ASIDE THE IMPUGNED ORDER DATED
02/12/2021 PASSED ON I.A.NO.3 FILED BY
RESPONDENT/PLAINTIFF IN COM. O.S.NO.296/2020 BY
THE LXXXIX ADDITIONAL CITY CIVIL AND SESSIONS
JUDGE, BENGALURU (CCH-90) AND ETC.
THIS COMMERCIAL APPEAL HAVING BEEN HEARD
AND RESERVED FOR JUDGMENT ON 26.06.2023, COMING
ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY,
ANANT RAMANATH HEGDE J., DELIVERED THE
FOLLOWING:
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JUDGMENT
The defendants in Commercial O.S. No.296/2020 on the file of LXXXIX Commercial Court/Additional City Civil Judge, Bengaluru have preferred the instant Commercial Appeal challenging the validity of the order dated 02.12.2021, wherein the Commercial Court has allowed the application under Order XXXIX Rules 1 & 2 read with Section 151 of Code of Civil Procedure filed by the plaintiff/ respondent, and restrained the defendants and anyone claiming under them by way of temporary injunction from utilizing or creating any charge over the FAR/FSI in respect of the suit 'A' schedule property in any capacity including as confirming parties, pending disposal of the suit.
2. Brief facts necessary for adjudication of the case can be summarized as under:
Appellants No.1 to 10 are the owners of a certain portion of the lands comprised of 32 distinct survey 6 numbers in Kundalahalli village, Taluk, Bengaluru. The appellants No.11 to 16 are family members of defendant No.10 and defendant No.16 is the power of attorney holder of defendant No.17 which is a Company.
3. Appellants No.10 to 16 executed Joint Development Agreement on 21st March 2005 in favour of appellant No.17 to develop the lands covered under the agreement which also included the portion of suit 'A' schedule property. The said appellants also executed a registered power of attorney authorizing defendant No. 17 to confer a lease of their respective properties.
4. Likewise, appellants No. 1 to 9 executed a joint development agreement on 25.03.2005 and a power of attorney on the same day in favour of appellant No.17 to develop their respective lands which also included the portion of suit 'A' schedule property and to confer the lease in respect of the lands owned by them.
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5. It is stated that on 31st May 2005, the respondent of this appeal (the plaintiff in the suit) and appellant No.17 entered into an agreement which facilitated the appellant No.17 to enter into a perpetual lease in respect of suit 'A' schedule property along with an adjoining land measuring 2 Acres and 9 Guntas in Sy. No. 47/3 and 48 of Kundalahalli, Bengaluru in favour of the respondent. Later in this regard, a registered perpetual lease deed was executed on 21st October 2005. It is further stated that the lease deed was executed in respect of 17 Acres and 31 Guntas for a consideration of 59 crores and 61 lakhs.
6. It is stated that the respondent is enabled under the lease deed to construct an area of 10,56,000 square feet on the suit 'A' schedule property. It is further stated that under certain circumstances specified in Clause 9 of the perpetual lease deed dated 21.10.2005, the 8 respondent has the right to purchase an area in excess of 10,56,000 square feet FAR/FSI from the appellants.
7. The respondent alleged that the appellants acted contrary to the terms of the lease deed dated 21.10.2005 and have tried to create third-party charges over the excess FAR/FSI area available in suit 'A' schedule property. Under the circumstances, the suit is filed to direct the defendants to execute the registered conveyance deeds in respect of suit 'A' schedule property in favour of the respondent. In addition, certain other consequential reliefs are also sought against the appellants. Temporary injunction is also sought under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure.
8. The appellant/defendant No.17 filed a written statement as well as objections to the application seeking a temporary injunction. It is contended by appellant No.17 that the respondent is not entitled to an area in excess of 10,56,000 square feet in the suit 'A' schedule property and 9 the appellants are willing to execute the sale deed in respect of 10,56,000 square feet. It is further contended that under the registered lease deed dated 21.10.2005 the area in excess of 10,56,000 square feet in suit 'A' schedule property belongs to appellant No.17 and accordingly prayed for dismissal of the suit and application seeking temporary injunction.
9. The Commercial Court after hearing the parties has allowed the application filed by the respondent and restrained the appellants from creating any third-party charge over FAR/FSI in respect of suit 'A' schedule property till the disposal of the suit.
10. Aggrieved by the said order, the defendants are in appeal.
11. Heard Sri Ashok Harnahalli, learned Senior Counsel appearing for the appellants and Sri G. 10 Vishwanath, learned Senior Counsel appearing for the respondent.
12. Learned Senior counsel appearing for the appellant submitted that under the lease deed entered into by the parties, 10,56,000 square feet of built-up area is the entitlement of the respondent and FAR/FSI in excess of it belongs to the appellant No.17. It is his further contention that the clause No.9 of the registered lease deed dated 21.10.2005 is to be read along with remaining clauses in the lease deed, particularly the clause No.6 (a),
(i) and (f). If read so, it is apparent that appellant No.17 will have right over FAR/FSI in excess of 10,56,000 square feet in 'A' schedule land and the respondent will have right over only 10,56,000 square feet and nothing more.
13. It is also urged on behalf of the appellants that with the consent and knowledge of the respondent, the development plan is modified and a comprehensive development plan is prepared and the same is approved in 11 the year 2015. It is further urged that the appellant No.17 has developed the excess FAR/FSI area in the suit 'A' schedule property and has utilized the same. It is urged that all these developments have taken place with the consent and the knowledge of the respondent as such the suit is not maintainable. It is also urged that the FRA calculated by the Commercial Court in its impugned order is without any basis.
14. It is further urged that the Commercial Court, by merely holding that the plaintiff has made a triable case granted the injunction and the same is impermissible. It is further urged that the impugned order will come in the way of the appellant No.17 from further developing the property in excess of FAR/FSI 10,56,000 square feet which under the lease deed dated 21.10.2005, rightfully belongs to the appellant No.17. He would further submit that the development, if any, takes place, if interim order is vacated will be subject to the result of the suit, as such the 12 Commercial Court could not have granted the injunction in favour of the plaintiff/respondent.
15. He further referred to Clauses 6 and 9 of the registered lease deed and submitted that the terms and conditions agreed upon by the parties, the respondent /plaintiff is not entitled to any relief as the excess FAR/FSI does not belong to the respondent.
16. Sri G. L. Vishwanath learned Senior Counsel appearing for the respondent/plaintiff urged that under Clause 9 of the registered lease deed dated 21.10.2005, the respondent is entitled to exercise his option to purchase the FAR/FSI over 10,56,000 square feet in a suit 'A' schedule property. It is further contended that as per the conditions in Clause 9, the option to purchase the excess FAR/FSI can be exercised as soon as the completion of development work or after the expiry of 12 years from the registration of the lease deed. The work is not yet complete and 12 years have elapsed since the 13 execution of the lease deed, which is registered on 21.10.2005. Thus, the right to purchase excess FAR/FSI in a suit 'A' schedule property has accrued to the respondent immediately after 21.10.2017. The appellants are bound by the above-said clause and cannot alienate the excess FAR/FSI in suit 'A' Schedule property to anyone except the respondent.
17. Learned Senior Counsel also referred to the last paragraph of Clause No.9 in the lease deed dated 21.10.2005. Said paragraph reads as under:
"Notwithstanding anything contained in this Deed of Permanent Lease or in any other contract or agreement or arrangement entered into by the Lessors and/or Developer, whether amongst themselves or with any others whomsoever, it is irrevocably agreed by the Lessors and the Developer, that the Lessee shall have the right and option, without obligation to pay any other or further amounts whatsoever (save and except only for 14 adjustment of the Security Deposit in full and final settlement towards the balance price as provided in Clause 3 above and payment by the Lessee of the stamp duty and registration charges and all related expenses as applicable on all required deeds and documents), to get transferred to itself all the residuary and/or reversionary rights in respect of the Schedule Property, so as to obtain the full and absolute title and all rights to and in respect of the Schedule Property and every part or portion thereof, through appropriate sale agreements and sale deeds/conveyances duly executed and registered by the Lessors and Developer in favour of the Lessee. Such right and option of the Lessee to acquire absolute ownership title and rights to the Schedule Property may be exercised, in its sole discretion, at any time after the earliest of:
a. completion of the DivyaSree Technopark project by the Developer; or b. transfer by the Lessee, at the cost of the Developer, after obtaining all required 15 consents and approvals, of its rights with respect to the excess FSI/FAR (beyond 10,56,000 sq. ft.) in respect of the Schedule Property and Future Development Area to the Lessors/Developer and/or to their nominee(s); or c. 12 (Twelve) years from the date of this Deed of Permanent Perpetual Lease."
18. By referring to the said condition it is urged that the appellants are not supposed to sell the property to anyone other than the respondent.
19. This Court has considered the contentions raised at the bar and perused the impugned order.
20. There is no dispute over the fact that the parties to the proceeding are governed by the registered lease deed dated 21.10.2005. It is further not in dispute that the respondent is entitled to 10,56,000 square feet of developed area in 'A' schedule property. The dispute is in 16 respect of FAR/FSI in excess of 10,56,000 square feet in 'A' schedule property.
21. Both the parties to the proceeding referred to the clauses in the agreement to justify their respective stand in respect of excess FAR/FSI area in suit 'A' schedule property.
22. Though clauses 6 (a), (i) and (f) of the agreement indicate that the excess FAR/FSI area belongs to the appellant No.17. Whereas clause No.9 which starts with the non-obstante clause, confers the option to purchase the excess FAR/FSI area in favour of the respondent. The same paragraph further restrains the appellants from transferring the property to anyone other than the respondent.
23. On considering Clause 9, the learned Commercial Court has concluded that Clause 9 prima facie would disclose that the respondent is entitled to purchase 17 FAR/FSI in excess of 10,56,000 square feet in suit 'A' schedule property.
24. The contention of the learned Senior Counsel appearing for the appellants that in view of the modification of the development plan where the composite development plan is approved to develop the property, and development made by the appellant No.17 by using excess FAR/FSI area, the respondent is not entitled to any relief cannot be entertained at this stage. This contention can only be appreciated after the trial. The Commercial Court has rightly taken a view that the plaintiff has made out a case for trial and the contentions of the parties are to be considered after the full-dressed trial.
25. Prima facie, this Court is of the view that there is a registered lease deed which enables the respondent to purchase FAR/FSI in the excess of 10,56,000 sq. ft. as per Clause 9. This being the position, there is a prima facie case in favour of the respondent. Moreover, the document 18 under which the respondent is claiming the right, i.e., the registered lease deed dated 21.10.2005 is undisputed.
26. In case third-party rights are created, the same will result in a multiplicity of litigation and will eventually cause irreparable loss and injury to the respondent. Thus the balance of convenience also lies in favour of the respondent.
27. This Court has perused the impugned order. The Commercial Court has assigned valid reasons while passing the impugned order. The reasons assigned by the Commercial Court are supported by records.
28. It is a well-settled principle of law that in an appeal challenging the interim order passed in the exercise of discretionary power, the appellate court will not interfere with the order unless it is shown that the impugned order is arbitrary, capricious or perverse. 19
29. Having gone through the impugned order and on consideration of the materials placed on record, this Court is of the view that the reasons assigned by the Commercial Court in granting a temporary injunction in favour of the respondent cannot be said to be arbitrary, capricious or perverse. On the other hand the reasons are supported by materials and in sync with established principles of law.
30. For the aforementioned reasons, this Court does not find any reason to interfere with the impugned order. Accordingly, the order dated 02.12.2021 passed in Commercial O.S. No.296/2020 on the file of the LXXXIX Commercial Court/Additional City Civil Judge, Bengaluru is confirmed.
31. Needless to say that the Commercial Court shall decide the case on its merit, without being influenced by any of the observations made in the impugned order and in this appeal as the observations made are only 20 confined to the interim application filed before the Commercial Court.
32. Accordingly, the appeal is dismissed.
Sd/-
JUDGE Sd/-
JUDGE GVP/BRN