Gujarat High Court
Keval vs Ashok on 2 August, 2010
Author: Anant S. Dave
Bench: Anant S. Dave
Gujarat High Court Case Information System
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AO/118/2010 30/ 30 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
APPEAL
FROM ORDER No. 118 of 2010
With
CIVIL
APPLICATION No. 4790 of 2010
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KEVAL
DEVELOPERS PRIVATE LTD
Versus
ASHOK
GOVINDRAM HURRA & OTHERS
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Appearance :
Mr.
P.C. Kavina, Senior Advocate, with Mr. Digant M. Popat for the
appellant.
Dr.
Sonia Hurra with Mr. Prasad A. Hurra for respondent No.1
Mr.
N.D. Nanavati, Senior Advocate with Mr. Vimal M. Patel for respondent
Nos. 2 to 5
Respondent
Nos. 6 and 7 party in person.
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CORAM
:
HONOURABLE
MR.JUSTICE ANANT S. DAVE
Date
: 02/08/2010
ORAL
ORDER
1 This Appeal from Order under Order 43 Rule 1(r) of the Code of Civil Procedure is filed by the appellant [original defendant No.5] against the judgment and order dated 27.4.2010 passed by the learned Judge, Court No.9, City Civil Court, Ahmedabad, below Exh.139 [Notice of Motion] in Civil Suit No.545 of 2007, by which, the Notice of Motion filed by the plaintiff came to be allowed and the interim relief in terms of paragraph 6(B) of the Notice of Motion was granted against defendant No.5 till final disposal of the suit.
1.1 Along with the appeal from order, Civil Application No.4790 of 2010 is filed by the applicant-appellant to stay the above order dated 27.4.2010 passed by the trial court.
2. On 3.5.2010, when the matter was listed for admission hearing before the Court [Coram: Ravi R. Tripathi, J.], by order dated 3.5.2010, the appeal was admitted and in the civil application for stay, notice as to interim relief was issued returnable on 21.6.2010. On 21.6.2010, since the notice was not served upon respondent Nos. 2 to 7, the Registry was directed to issue fresh notice to the unserved respondents returnable on 29.6.2010. On the returnable date, the Registry placed the matter before this Court on 29.6.2010. In the note dated 29.6.2010 submitted by the Registry, the matter was placed for the order of the Court since process fees were not paid and the time was to be extended. This Court passed an order to the effect that the process fee be paid on or before 2.7.2010 and returnable date be extended accordingly. Since the matter was not listed, a note was submitted and, accordingly, this Court directed the Registry to notify the matter on 15.7.2010. On 15.7.2010, this Court passed the following order:
Heard learned counsels for the parties.
In view of the office note dated 14.07.2010 filed by the Registrar (Judicial) and the endorsement made by the Hon'ble the Chief Justice to notify the matter, this matter is placed before this Court, today.
Mr. Prasad Hurra, learned advocate appearing for the respondent No.1, submits that he has made a representation to the Hon'ble the Chief Justice expressing no confidence in this Court to conduct this case. He further submits that even today also he has made a representation to the Registrar (Judicial).
In view of the above, the Office is directed to place this matter before the Hon'ble Chief Justice for obtaining appropriate order.
The Registry referred the matter to the Hon'ble Chief Justice as per the note dated 19.7.2010 and, thereafter, as per the order dated 23.7.2010 passed by the Hon'ble Chief Justice - 'before the same Hon'ble Judge i.e, Mr. Justice A.S. Dave on 23.7.2010', the matter was placed before this Court. On 27.7.2010, the appeal as well as civil application for stay was taken up for hearing. The learned advocates for both the parties argued the case for about three and half hours and the matter was adjourned to 29.7.2010 at 14.30 hours and, again, the learned advocates for the parties argued the case for about one and half hours. Thus, the matter is heard extensively by this Court and today the matter is listed for orders.
3. The broad facts, as narrated by the plaintiff, have a root in an agreement dated 12.12.2003, which was entered into between the plaintiff as karta of HUF and his son Prasad Hurra and one Shri Pragnesh, laying down terms and conditions and development of their ancestral bungalow at Ashram Road named 'Sant Kutir'. It is the say of the plaintiff that it was decided to develop the building named 'Florence' and the name of the partnership firm was M/s. Florence Construction. That, the said bungalow owned by the plaintiff HUF and his minor son was valued at Rs.2.31 crores which was later on increased to Rs.2.51 crores with increase of FSI due to amalgamation of the entire plot into one including two rear bungalows. That, the said amount was taken as investment by the plaintiff in the partnership firm and likewise Pragnesh was to pay Rs.50 lakhs as deposit on or before 12.12.2003 and was to bear the entire cost of construction of Florence. On 22.4.2004, a partnership deed was executed adopting all the terms and conditions of the agreement dated 12.12.2003 and, as per clause 10 of the said agreement, the term of partnership would be extended to the new venture by mutual consent of both the partners and, as per clause 22, the funds of the partnership would not be given on loan and if it was so then there should be a written agreement thereto. It is the say of the plaintiff that the said partnership firm was initially formed for the purpose of Florence project but later on it was extended to the new project of Natraj cinema land by consent of both the parties. On 15.9.2004, a development agreement was executed between the parties. That, as per the plaintiff, in the year 2005-2006, the plaintiff suffered a serious disease and due to malignancy of cancer of tongue, he was to be hospitalized and the said situation was exploited by the defendant who committed certain irregularities including criminal misappropriation and embezzlement of partnership funds, for which a criminal complaint, being FIR C.R. No.139 of 2007, came to be filed.
However, in the meanwhile, certain transactions took place with regard to letting out a premises owned by the plaintiff to some companies and in or around October 2006 the plaintiff came to know about certain illegal activities of the defendant and thereafter that complaint was filed. It is further submitted that, when the plaintiff came to know about the defendant's efforts to sell the partnership property of Natraj cinema to one Fame Group for Multiplex, the plaintiff filed Civil Suit No.545 of 2007 in the City Civil Court, Ahmedabad, on 14.3.2007. Initially, a writ petition being Special Civil Application No.6874 of 2007 was filed in this Court wherein this Court granted an interim relief restraining the respondent Nos. 2 to 5 of the said writ petition from selling, mortgaging, leasing or developing the property of Natraj cinema, but, it is stated that the learned advocate appearing for the respondents made a false statement before the learned Single Judge that a caveat was filed on behalf of the respondents and, therefore, the order was not signed and, thereafter, after hearing the learned advocates for both the parties, an undertaking was filed by the respondents to the effect that they will not alienate the partnership property in question and, therefore, the interim relief granted earlier was ordered to continue till 30.3.2007. According to the plaintiff, finally, Special Civil Application No.6874 of 2007 was disposed of with a direction to the trial court to decide the Notice of Motion application within 15 days. On 26.4.2007, a notice of lis pendens under Section 52 of the Transfer of Property Act, 1882, was registered and on 22.7.2007 a caution notice was published in Gujarat Samachar, a widely circulated vernacular newspaper, and a similar notice was published in the Times of India on 24.7.2007. In the meanwhile, the plaintiff filed application dated 29.10.2007 and, as per the order dated 24.10.2007, submitted amended plaint and amended application for interim injunction and other reliefs in Civil Suit No.545 of 2007 and the same was pending for hearing. It is the say of the plaintiff that on 26.3.2008, the impugned sale deed came to be executed since the notice of motion Exh.6/7 for interim relief was rejected by the trial court by order dated 24.10.2007.
3.1 Being aggrieved by the above order dated 24.10.2007 of the trial court, the plaintiff filed Appeal From Order No.3 of 2008 with Civil Application No.15 of 2008, wherein, after hearing the learned advocates for the parties, this Court [Coram: D.N. Patel, as His Lordship then was] by order dated 27.3.2008 dismissed the appeal and the civil application. However, considering the nature of controversy between the parties, the trial court was directed to hear and decide Civil Suit No.545 of 2007 as expeditiously as possible and preferably on or before 31.1.2009 without being influenced by the observations made in the above order as well as the order passed by the court below in Notice of Motion Exh.6/7.
3.2 Being aggrieved by the order dated 27.3.2008 passed by this Court, the plaintiff filed Special Leave to Appeal [Civil] Nos.9411-9412 of 2008 before the Apex Court, wherein, the following order was passed by the Apex Court on 5.5.2008.
Since the impugned order is an interim Order, the Special Leave Petitions are dismissed. We make it clear that observations by the High Court in the impugned order are tentative and shall have no bearings on the merits of the case at final hearing.
3.3 The plaintiff filed an amendment application challenging two sale deeds dated 11.5.2006. On 14.7.2009, the plaintiff filed Civil Suit No.1448 of 2009 against Kewal Developers as defendant No.1 of the said suit. Once again, lis pendens was registered in Civil Suit No.1448 of 2009. A written statement was filed and, thereafter, the amended plaint was filed on 20.8.2009. The application Exh.24 for stay of the suit in Civil Suit No.1448 of 2009 was allowed by order dated 15.9.2009, wherein, the trial court observed that on the same subject matter of the property, the issues are identically same and, therefore, the subsequent suit cannot be proceeded with, but, if the plaintiff is aggrieved against Keval Developers Private Limited, then the plaintiff may also bring out an application for amendment in proper manner in order to enable him to ask new prayer against the newly added party in Civil Suit No.1448 of 2009.
3.4 In the meanwhile, when the plaintiff came to know about the plan for construction of a six-storyed building namely 'Welcome' on the Natraj cinema property, the plaintiff made inquiries and, accordingly, the letters addressed by Keval Developers Private Limited and other applications for permission to construct building according to the plan, came to the notice of the plaintiff. Even, the Ahmedabad Municipal Corporation also wrote a letter to the plaintiff on 31.12.2009 asking for objections of the plaintiff to the construction plan given by Keval Developers Private Limited and, accordingly, objections were raised by the plaintiff. However, it seems from the record that the competent authority of the Ahmedabad Municipal Corporation granted permission subject to certain conditions by order dated 26.4.2010.
3.5 It is to be noted that in Civil Suit No.1448 of 2009, after considering prima-facie case, etc. of the plaintiff, by order dated 3.3.2010, the trial court granted interim injunction restraining third party-defendant from creating any further rights and prohibiting them from alienating the property in question in any manner. Some of the defendants, being aggrieved by the aforesaid order dated 3.3.2010, filed Appeal From Order No.70 of 2010, which came to be disposed of by this Court by order dated 10.3.2010 on the basis of submissions made by the learned advocates appearing for the parties. While disposing of the aforesaid Appeal From Order, the undertaking dated 4.3.2010 filed by the defendants in Regular Civil Suit No.1448 of 2009 to the extent that they shall not transfer the property in question in any manner, was ordered to be continued till proper amendment application is moved for a period of two weeks. It is further say of the plaintiff that on 13.4.2010, the amendment application was filed in Civil Suit No.545 of 2007 and placed on record the amended plaint after serving a copy of the same to the defendants.
3.6 So far as the criminal proceedings are concerned, the stay granted by the High Court qua investigation of criminal case, came to be vacated by the Apex Court by order dated 26.4.2010.
3.7 It is further case of the plaintiff that the plaintiff had no knowledge about the second sale deed dated 10.4.2008 of the property in question executed in favour of defendant No.5.
3.8 In the context of above facts, the application Exh.139 in Civil Suit No.545 of 2007 was heard and decided by the trial court, by which, the Notice of Motion filed by the plaintiff came to be allowed and the interim relief in terms of paragraph 6(B) was granted against only defendant No.5 till final disposal of the suit, which is under challenge.
4 Mr. P.C. Kavina, learned Senior Counsel for the appellant, has assailed the order passed by the trial court mainly on the ground that the second Notice of Motion for injunction filed after the amendment was granted is wrongly entertained and allowed by the trial court. According to the learned counsel for the appellant, the reliance placed on the provisions of Section 52 of the Transfer of Property Act, 1882, is based on the ignorance and misconceived notion that, if lis pendens is there, the party has to obtain permission from the Court concerned under section 52 of the Act before dealing with the property. According to the learned counsel for the appellant, the correct interpretation of Section 52 of the Act is that, once lis pendens is registered, the subsequent transferee would be bound by the decision, namely, the final order or decree that may be passed by the concerned Court and nothing more than that. At the most, a plea cannot be taken by the subsequent transferee that he is not bound by the final decision or decree of the trial court in spite of lis pendens. According to the learned counsel for the appellant, in the facts and circumstances of the case, when the first notice of lis pendens was registered on 26.4.2007, the trial court rejected the interim application on 24.10.2007, which came to be confirmed by this Honourable Court in Appeal From Order No. 3 of 2008 on 27.3.2008 and even the Special Leave to Appeal (Civil) Nos.9411-9412 of 2008 also came to be rejected by the Apex Court by order dated 5.5.2008 with certain observations. In view of the above, applying the doctrine of very Section 52 of the Act to the subsequently amended plaint and Notice of Motion, the trial court ought not to have exercised its jurisdiction by restraining the defendant from dealing with the property in question. It is further stated that the reliance was placed on the report of the Chartered Accountant appointed and engaged by the plaintiff who had an access to the material supplied and made available by the plaintiff and disputed by the defendants, and the said report of the Chartered Accountant based on such material could not have formed basis for grant of relief in favour of the plaintiff, which upsets the norms of balance of convenience, undue hardship including the prima-facie case. The learned counsel for the appellant has drawn the attention of this Court to the finding of the Chartered Accountant and submitted that his report was based solely on the verification of the statement of accounts which was made available to him and no account books or other material was verified. The learned counsel for the appellant has also submitted that the property in question, as mentioned in paragraph 3 of the plaint, is in two parts and one part was purchased by respondent No.2 and the other part was purchased by respondent No.3 and both the parts were sold, conveyed and transferred to the present appellant by defendant No.1 by two different sale deeds and the same were registered with the Sub-Registrar, Ahmedabad, and necessary entries were also posted in the revenue records. It is further submitted that permission for construction as per the plan submitted is granted by the competent authority of the Ahmedabad Municipal Corporation subject to the conditions laid down thereunder and the appellant is bound by the final outcome of the suit proceedings and any dealing, during pendency of the suit proceeding, is the subject matter or the decision that may be taken finally by the court concerned. In support of his argument, the learned counsel for the appellant has placed reliance on the decision of the Apex Court in the case of Sanjay Verma vs. Manik Roy and others, reported in (2006) 13 SCC 608, and it is submitted that in paragraph 12 of the above decision, the Apex Court clearly lays down that the parties are free to deal with the property, which is subject matter of the suit, and bound by the decree that may be passed, but, when the permission is sought for, lis pendens will not apply.
4.1 The learned counsel for the appellant has further submitted that, since the sale consideration has been paid, the transactions are valid and legal, and the permission to construction is granted by the competent authority of the Ahmedabad Municipal Corporation, the restriction put forth by the trial court not to transfer or alienate the property in question in any manner will cause undue hardship and irreparable loss to the appellant and, therefore, the impugned order of the trial court deserves to be quashed and set aside.
5 Mr. N.D. Nanavati, learned Senior Counsel appearing for original defendant Nos. 2 and 3, has submitted that the nature of the suit and the claim made in Civil Suit No.545 of 2007 and Civil Suit No.1148 of 2009, are about recovery of money with regard to the accounts of the partnership firm and, in the said suits, even if the plaintiff succeeds and a decree is passed in their favour, the amount as claimed can be ordered to be recovered. The learned Senior Counsel also relied upon the very decision of the Apex Court in the case of Sanjay Verma [supra] and submitted that the third party, newly added defendant, is not privy to the contract and there is no lis between the parties and no restrictive or prohibitive order could have been passed. The defendants are independent legal entity and just some of the partners are relatives, presumption cannot be drawn about fraudulent transaction. Besides, the issue involved in the proceeding can be decided and adjudicated without restraining the third party from alienating the property in question and, when the permission is granted to construct a building by the Ahmedabad Municipal Corporation, the same may be permitted to be done.
6 Per contra, on behalf of the plaintiff, respondent No.1 herein, two learned counsels were heard and permitted to argue on the same issue in view of the inability on the part of the learned junior counsel to understand and submit on the basis of certain recital in the sale deeds in vernacular Gujarati. At the outset, it is submitted on behalf of the plaintiff that the trial court, in its well considered and reasoned order, restrained the defendants from alienating or dealing with the property in any manner as prayed for in paragraph 6(B) of the application for injunction and, thereby, no illegality is committed by the trial court while passing the order impugned and, therefore, this Court, in exercise of its appellate power, would not interfere and, even if another view is possible with regard to appreciation of finding of facts by the trial court, this Court would be loathe in substituting its own opinion with that of the trial court. The learned counsel for the plaintiff has further submitted that, in view of the specific and clear permission granted by this Court in Appeal From Order No.3 of 2010, coupled with the observations made by the trial court while passing an order below application Exh.24 of staying the second suit, the amendment application was moved in view of the changed and new circumstances which came to the notice of the plaintiff. It is further submitted that the second sale deed dated 10.4.2008 executed in favour of the appellant came to the notice of the plaintiff only after 10.3.2010, i.e. after the order passed by this Court in Appeal From Order No.70 of 2008. It is further submitted that two sale deeds dated 27.3.2008 and 10.4.2008 were executed surreptitiously so that no action can be taken by the plaintiff. The learned counsel has also referred to the letters addressed by the Ahmedabad Municipal Corporation, which formed the basis for the amendment and a Chartered Accountant appointed by the plaintiff for verification of the account books submitted a report specifically pointing out non-transfer of Rs.50 lakhs in favour of the plaintiff. It is further submitted that, in spite of lis pendens notice, the defendants continued to create third party right on the suit property making it impossible for the plaintiff to get any relief and, virtually, amounting to multiplicity of proceedings and defeating the right of the plaintiff. The trial court, after having noticed the above facts and considering the principles of public policy, equity, good conscience, irreparable loss and the balance of convenience in favour of the plaintiff, passed the order impugned, which cannot be said to be in any manner illegal, which deserves interference by this Court. The learned counsel for the plaintiff [respondent No.1 herein] has also taken this Court to various documents produced and annexed along with this Appeal From Order and recorded in the foregoing paragraphs including the partnership agreement, development agreement, public notices issued in the newspapers and the criminal case filed and submitted that, the defendants created firms and companies to siphon off the fund of the plaintiff to deprive him of his legitimate dues. That, the alleged purchase of the property is not bona fide and the transactions have taken place between the defendants inter-se was to defeat and delay the lawful claim of the plaintiff.
6.1 The learned counsel for the plaintiff [respondent No.1 herein] has submitted that the Apex Court in the following decisions has considered the scope of exercise of powers by the High Court under Article 227 of the Constitution of India and submitted that the High Court cannot re-appreciate the finding of facts arrived at by the subordinate courts:
[i] (1975) 1 SCC 858 : Bathutmal Raichand Oswal vs. Laxmibai R. Tarta [ii] (1991) 3 SCC 141 : Mani Nariman Daruwala vs. Phiroz N. Bhatena [iii] (2002) 8 SCC 400 : Essen Deinki vs. Rajiv Kumar, which is again referred to in the subsequent decision of the Apex Court in (2003) 6 SCC 641 in the case of State through Special Cell, New Delhi vs. Navjot Sandhu.
6.2 The learned counsel for the plaintiff [respondent No.1 herein] has also referred to various decisions of the Apex Court in the context of Section 52 of the Transfer of Property Act, 1883 and reliance is placed on the decision of the Apex Court in the case of Sarvinder Singh vs. Dalip Singh, reported in (1996) 5 SCC 539 in support of her submission that the defendants in the suit were prohibited by operation of Section 52 to deal with the property and could not transfer or otherwise deal with it in any manner affecting the right of the plaintiff except with the order and authority of the Court.
The learned counsel has placed reliance on the decision of the Apex Court in the case of Guruswamy Nadar vs. P. Lakshmi Ammal, reported in (2008) 5 SCC 796 and submitted that the principle of lis pendens is based on public policy so as to discourage that, for the same subject matter of the property, if subjected to sale to a third person, such transaction has to be checked otherwise the litigation will not come to an end. The above principle was earlier propounded by the Apex Court in (2004) 1 SCC 191, Bibi Zubaida Khatoon vs. Nabi Hassan Sabeb. For grant of an interim injunction under Order 39 Rules 1 and 2, relying on the decision of the Apex Court in the case of Gujarat Bottling Co. Ltd vs. Coca Cola Co. and others, reported in (1995) 5 SCC 545, it is submitted that grant of interlocutory injunction is based on the exercise of sound judicial discretion based on prima-facie case, balance of convenience, irreparable loss, which cannot be compensated in terms of money, undue hardship, etc. etc. and the party seeking the court s interference with an order of injunction must be fair. It is further submitted that, when the conduct of the appellant is not bona-fide, and the relief granted by the trial court in favour the plaintiff being wholly equitable in nature, the appellate court may refuse to interfere.
7. In rejoinder, Mr. P.C. Kavina, learned Senior Counsel for the appellant, has reiterated his submissions with regard to applicability of Section 52 of the Transfer of Property Act and submitted that the appellant-defendant is a bona fide purchaser for value of money and is ready and agreeable that any further alienation of the suit property will be subject to the final outcome of the suit, which is opposed by the learned counsel for the plaintiff on the ground that the same will result into multiplicity of proceedings and unending litigation. Mr. P.C. Kavina, learned Senior Counsel for the appellant, has vehemently denied the submissions made by the learned counsel for the plaintiff that the two suits do have bearing on the criminal case and other submissions regarding irregularity or illegality.
7.1 Learned counsels for the original defendants have vehemently denied the allegations levelled by the learned counsel for the plaintiff and termed the same as baseless and devoid of merit.
8. Heard the learned counsels for the parties and perused the record.
9. From the record, it appears that the first suit was filed on 14.3.2007 basically for recovery of Rs.4,37,18,447/- with the following prayers in paragraph 27 [page 453 of the compilation]:
[A] This Hon'ble Court may kindly be pleased to declare that the suit property commonly known as Natraj Land at Changispur alias Mithakali, in the Registration District and Sub-District of Ahmedabad-3 (Memnagar- bearing Final Plot No.485-paiki of Ellisbridge Town Planning Scheme No.3 admeasuring 5082 sq.yards or thereabout an asset and property of the firm of M/s. Florence Construction;
[A-1] This Hon'ble Court may kindly be pleased to declare null and void thus set aside the two sale deed executed on dated 11.5.2006,one in favour of Pure Infrastructure, defendant No.2 herein, and second in favour of M/s. Parikh Real Estate & Leasing [Pvt] Ltd in relation to suit property commonly known as Natraj Land situated at Changispur alias Mithakali, in the Registration District and Sub-District of Ahmedabad-3 (Memnagar- bearing Final Plot No.485-paiki of Ellisbridge Town Planning Scheme No.3 admeasuring 5082 sq.yards or thereabout which is executed by sellers of Natraj Cinema named in the two sale deeds annexed with the plaint;
[B] This Hon'ble Court may kindly be pleased to declare that the defendants Nos. 2 and 3 have no right, title or interest in the property being Natraj Land situated at Changispur alias Mithakali, in the Registration District and Sub-District of Ahmedabad-3 (Memnagar- bearing Final Plot No.485-paiki of Ellisbridge Town Planning Scheme No.3 admeasuring 5082 sq.yards and the defendants Nos. 2 and 3 be directed by mandatory injunction to convey the said property to the firm of M/s. Florence Construction and/or in the joint names of the plaintiff and defendant No.1' [C] This Hon'ble Court may kindly be pleased to dissolve the partnership firm of M/s. Florence Constructing with effect from the date of suit.
[D] This Hon'ble Court may kindly be pleased to direct the defendant No.1 to give complete accounts of the profits and assets, including the property known as Natraj Cinema property, of the firm of M/s. Florence Construction and to direct the defendant No.1 to pay to the plaintiff his share in the profits and assets of the firm on taking such accounts together with interest @ 18% per annum till date of payment;
[E] This Hon'ble Court may kindly be pleased to pass a decree for the sum of Rs.4,37,18,447/- with interest at the rate of 18% per annum against the defendant No.1 as partner of the firm and direct him to pay the said sum to the firm of M/s. Florence Construction;
[F] This Hon'ble Court may kindly be pleased to grant any other and further relief as may be deemed just and fair in the circumstances of the case.
9.1 The amended plaint, as per the order dated 13.4.2010 below application Exh.137, refers to the suit for recovery of Rs.12,83,69,745, with the following prayers [page 505 of the compilation]:
[A] This Hon'ble Court may kindly be pleased to declare that the suit property commonly known as Natraj Land at Changispur alias Mithakali, in the Registration District and Sub-District of Ahmedabad-3 (Memnagar- bearing Final Plot No.485-paiki of Ellisbridge Town Planning Scheme No.3 admeasuring 5082 sq.yards or thereabout an asset and property of the firm of M/s. Florence Construction;
[A-1] This Hon'ble Court may kindly be pleased to declare null and void thus set aside the two sale deed executed on dated 11.5.2006,one in favour of Pure Infrastructure, defendant No.2 herein, and second in favour of M/s. Parikh Real Estate & Leasing [Pvt] Ltd in relation to suit property commonly known as Natraj Land situated at Changispur alias Mithakali, in the Registration District and Sub-District of Ahmedabad-3 (Memnagar- bearing Final Plot No.485-paiki of Ellisbridge Town Planning Scheme No.3 admeasuring 5082 sq.yards or thereabout which is executed by sellers of Natraj Cinema named in the two sale deeds annexed with the plaint;
[B] This Hon'ble Court may kindly be pleased to declare that the defendants Nos. 2 and 3 have no right, title or interest in the property being Natraj Land situated at Changispur alias Mithakali, in the Registration District and Sub-District of Ahmedabad-3 (Memnagar- bearing Final Plot No.485-paiki of Ellisbridge Town Planning Scheme No.3 admeasuring 5082 sq.yards and the defendants Nos. 2 and 3 be directed by mandatory injunction to convey the said property to the firm of M/s. Florence Construction and/or in the joint names of the plaintiff and defendant No.1.
[C-1] This Hon'ble Court may kindly be pleased to declare that defendant No.5 has not acquired any legal right, title or interest in the said half of property pursuant to sale deed dated 27.3.2008 and subsequent sale deed of second half of the property vide registered sale deed dated 10.4.2008 commonly known as Natraj Land situated at Changispur alias Mithakali, in the Registration District and Sub-District of Ahmedabad-3 (Memnagar- bearing Final Plot No.485-paiki of Ellisbridge Town Planning Scheme No.3 admeasuring 5082 sq.yards and thus defendant No.5 be kindly directed to convey the said half property each admeasuring 2541 sq.yards to the firm named M/s. Florence Construction.
[C-2] This Hon'ble Court may kindly be pleased to quash and set aside declaring null and void the sale deeds dated 276.3.2008 registered on dated 27.3.2008 and subsequent sale deed of second half of the property vide registered sale deed dated 10.4.2008 bearing Sr. No.6116, both in favour of M/s. Keval Developer Private Limited, defendant No.5 in relation to the property commonly known as Natraj Land situated at Changispur alias Mithakali, in the Registration District and Sub-District of Ahmedabad-3 (Memnagar- bearing Final Plot No.485-paiki of Ellisbridge Town Planning Scheme No.3 admeasuring 5082 sq.yards, they are not binding on the plaintiff.
[C-3] This Hon'ble Court may kindly be pleased to restrain the defendants more particularly defendant No.5 by granting appropriate prohibitory injunction restraining him from alienating, transferring, mortgaging, selling, developing, or otherwise dealing with suit property in any manner whatsoever, i.e. property commonly known as Natraj Land situated at Changispur alias Mithakali, in the Registration District and Sub-District of Ahmedabad-3 (Memnagar- bearing Final Plot No.485-paiki of Ellisbridge Town Planning Scheme No.3 admeasuring 5082 sq.yards, or thereabout which is bounded as under:
North by: Final Plot no.484 [building of Chamber of Commerce] South by: T.P. Land East by :Final Plot no.485 part Ashram Road West by: Final Plot no.481, 482, 483.
[C] This Hon'ble Court may kindly be pleased to dissolve the partnership firm of M/s. Florence Constructing with effect from the date of suit.
[D] This Hon'ble Court may kindly be pleased to direct the defendant No.1 to give complete accounts of the profits and assets, including the property known as Natraj Cinema property, of the firm of M/s. Florence Construction and to direct the defendant No.1 to pay to the plaintiff his share in the profits and assets of the firm on taking such accounts together with interest @ 18% per annum till date of payment;
[E] This Hon'ble Court may kindly be pleased to pass a decree for the sum of Rs.821.71 lacs with interest at the rate of 18% per annum calculated from May 10, 2005 till the date of realization against the defendant No.1 to 8 payable to Florence Construction Partnership Firm as damages for fraud conspired by them recoverable out of sale proceeds of the suit property of partnership firm known as Natraj cinema land, and kindly be pleased to declare that all defendants are jointly and severally liable to satisfy said claim as stated herein.
[E-1] This Hon'ble Court may kindly be pleased to declare that both the parters i.e. plaintiff and defendant No.1 are entitled to receive their share in profits of the firm in proportion to their contribution given towards partnership firm Florence Construction as may be established before this Hon'ble Court, recoverable out of sale proceeds of Partnership Property Natraj cinema and other properties owned by defendants.
[F] This Hon'ble Court may kindly be pleased to grant any other and further relief as may be deemed just and fair in the circumstances of the case.
9.2 So far as Civil Suit No.1448 of 2009 is concerned, the same is stayed by the trial court and there is no challenge thereafter. Therefore, there is no necessity to refer to the said suit.
10. There is no dispute about applicability of doctrine of Section 52 of the Transfer of Property Act to the proceeding in question. Section 52 reads as under:
Transfer of property pending suit relating thereto:-
During the pendency in any Court having authority within the limits of India excluding the State of Jammu and Kashmir or established beyond such limits by the Central Government of any suit or proceedings which is not collusive and in which any right to immoveable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court and on such terms as it may impose.
10.1 The above provision is interpreted by the Apex Court in the case of Sanjay Verma [supra] wherein the issue of transfer pendente lite without leave of the Court fell into consideration of the Apex Court in the context of rejection of an application of the third party to seek impleadment in the pending suit. In the above decision, the Apex Court has considered various case-laws including Bibi Zubaida Khatoon vs. Nabi Hassan Sabhe, (2004) 1 SCC 191, Sarvinder Singh v. Dalip Singh, (1996) 5 SCC 539, Dhurandhar Prasad Singh vs. Jai Prakash University, (2001) 6 SCC 534 and, in paragraph 12, held as under:
The principles specified in Section 52 of the TP Act are in accordance with equity, good conscience or justice because they rest upon an equitable and just foundation that it will be impossible to bring an action or suit to a successful termination if alienations are permitted to prevail. A transferee pendente lite is bound by the decree just as much as he was a party to the suit. The principle of lis pendens embodied in Section 52 of the TP Act being a principle of public policy, no question of good faith or bona fide arises. The principle underlying Section 52 is that a litigating party is exempted from taking notice of a title acquired during the pendency of the litigation. The mere pendency of a suit does not prevent one of the parties from dealing with the property constituting the subject-matter of the suit. The section only postulates a condition that the alienation will in no manner affect the rights of the other party under any decree which may be passed in the suit unless the property was alienated with the permission of the court.
The Apex Court has extensively referred to the principles underlying Section 52 and held that a transferee pendente lite is bound by the decree just as much as he was a party to the suit and the principle of lis pendens embodied in Section 52 of the TP Act being a principle of public policy, good faith or bona fide of the purchaser or transferee is subservient to the principle of public policy. It is further held that one of principles underlying Section 52 is that a litigating party is exempted from taking notice of a title acquired during the pendency of the litigation and the mere pendency of a suit does not prevent one of the parties from dealing with the property constituting the subject-matter of the suit. However, in the case of a property being alienated with the permission of the Court, the same shall be subservient to the decree that may be passed.
11 This Court is in respectful agreement with the proposition of law laid down by the Apex Court on the doctrines of lis pendens embodied in Section 52 of the Transfer of Property Act in various decisions and, considering the facts and circumstances of the case, the decisions quoted in the foregoing paragraphs are suffice to mention.
11.1 The decisions relied upon by the learned counsel for the plaintiff [respondent No.1] with regard to exercise of powers under Article 227 of the Constitution of India will strictly be not applicable to the facts of the present appeal.
12 Keeping in mind the above principles underlying Section 52 of the Transfer of Property Act, admittedly, the property in question, namely, Natraj cinema, came to be transferred as per the sale deeds dated 27.3.2008 and 10.4.2008. It is also true that two earlier sale deeds dated 11.5.2006, the origin of the above two sale deeds dated 27.3.2008 and 10.4.2008, were under challenge in Civil Suit No.545 of 2007, which was instituted on 14.3.2007, whereas, the notice of lis pendens under section 52 was issued on 26.4.2007. No doubt, this Court in the order passed in Appeal From Order No. 3 of 2008 and the Apex Court in Special Leave to Appeal (Civil) No.9411-9412 of 2008 preferred against the above order, had noticed the above facts. So far as Appeal From Order No. 3 of 2008 is concerned, in the order dated 27.3.2008, this Court [Coram: D.N. Patel, J. as His Lordship then was] had given tentative findings/observations for not believing the prima-facie case of the plaintiff. The above findings for deciding the issue involved in the present Appeal From Order may have some bearing but in view of the subsequent development, which took place in Appeal From Order No. 70 of 2010 and the permission granted by this Court to amend the plaint and to move an interim injunction application and the same is to be considered accordingly. The finding of the learned trial judge is based basically on three issues, namely;
[i] plea of lis pendens on the basis of Section 52 of the Transfer of Property Act and consequent thereto;
[ii] the knowledge of the plaintiff about execution of the second sale deed, entries in the revenue record, etc. and the correspondence between the plaintiff and the Ahmedabad Municipal Corporation;
[iii] the report of the Chartered Accountant and prima-facie finding in the said report based on the record submitted by the plaintiff.
12.1 Since the suit is pending before the trial court and the written statement is filed by the defendants, any detailed analysis or discussion of the material on record may have bearing on further proceedings of the suit. Hence, such exercise is not undertaken in this appeal and it is restricted to examining legality and validity of the order impugned only.
13. In view of the prayers quoted hereinabove in Civil Suit No.545 of 2007 and the amended plaint, it was a suit for recovery of money as well as for declaration and injunction. No doubt, if the plaintiff succeeds in his case before the trial court, a decree can be passed in his favour and the plaintiff can be compensated in terms of money as claimed. The defendant-appellant herein had knowledge about pendency of the proceeding and the litigation between the parties. It is further not in dispute that the competent authority of the Ahmedabad Municipal Corporation granted permission to construct building on the suit property subject to certain conditions laid down in the letter of authority [raja-chitti] dated 26.4.2010. Therefore, according to this Court, pending the suit, any further alienation of the suit property may result into multiplicity of proceedings and the fact still remains that in Appeal From Order No. 3 of 2008, the learned Single Judge had given a specific direction to the trial court to finally hear and dispose of the suit as expeditiously as possible preferably on or before 31.1.2009. However, in view of the subsequent development and the order passed in Appeal From Order No. 70 of 2010, the plaint was amended and the injunction as prayed for below application Exh.137 is granted in favour of the plaintiff.
14. Considering the above, if the present case is viewed in light of the prima-facie case, balance of convenience, irreparable loss and undue hardship, including equity and good conscience, the interest of justice will be served by directing the trial court to finally hear and decide the suit as expeditiously as possible preferably on or before 31.12.2010. However, pending hearing and final disposal of the suit, it will be open for the appellant-defendant to continue the construction on the suit land as per the permission granted by the competent authority of the Ahmedabad Municipal Corporation by the order dated 26.4.2010, but the appellant-defendant is restrained from alienating or transferring the suit property in any manner in favour of a third party.
15. In the result, the Appeal From Order is partly allowed. The impugned order of the trial court stands modified to the aforesaid extent. Civil Application stands disposed of. There shall be no order as to costs. It is made clear that the observations and findings made in this order are of tentative in nature and shall have no bearing on the further proceedings of the suit pending before the trial court.
(ANANT S. DAVE, J.) (swamy) Top