Gujarat High Court
Jigarbhai Pankajbhai Shah vs Natwarsinh Ganpatsinh Parmar on 9 June, 2022
Author: A. P. Thaker
Bench: A. P. Thaker
C/AO/175/2021 CAV ORDER DATED: 09/06/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/APPEAL FROM ORDER NO. 175 of 2021
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2021
In R/APPEAL FROM ORDER NO. 175 of 2021
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JIGARBHAI PANKAJBHAI SHAH Versus NATWARSINH GANPATSINH PARMAR ========================================================== Appearance:
MS. SANGEETA PAHWA, ADVOCATE WITH MR RAVI N PAHWA(11493) for the Appellant(s) No. 1 for the Respondent(s) No. 19 MR. R.S.SANJANWALA, SR. ADVOCATE WITH MR DHRUV K DAVE(6928) for the Respondent(s) No. 20 MR SHREYANG S VAYEDA(10917) for the Respondent(s) No. 1,2,3,4,5,6,7 MR. DAVE, SR. ADVOCATE WITH PRERAK P OZA(8279) for the Respondent(s) No. 10,11,12,13,14,15,16,17,18,8,9 ========================================================== CORAM:HONOURABLE DR. JUSTICE A. P. THAKER Date : 09/06/2022 CAV ORDER
1. Being aggrieved and dissatisfied with the impugned order dated 3.11.2021 passed below Exh-5 in Special Civil Suit No. 262 of 2018 by learned 10th Additional Senior Civil Judge, Vadodara, whereby the application preferred by the original plaintiff for interim injunction was rejected, the plaintiff has preferred this Appeal from Order under Order 43 Rule 1 of CPC.
2. The appellant is the original plaintiff and respondents are the original defendants. For the brevity and convenience, the parties are referred to herein as per the status assigned to them before the trial Court.
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3. The brief facts, which emerge from the record, are as under:
3.1 The plaintiff has filed the above stated Suit for specific performance and cancellation of sale deed dated 5.7.2018 entered into between defendant Nos. 1 to 18 and 19 & 20.
It is the case of the Plaintiff that defendant Nos. 1 to 7 has agreed to sell the suit land to him vide agreement to sell dated 22.8.2017 and part consideration amount was paid by the plaintiff. It is further the case of the plaintiff that it was agreed that after the revenue entry regarding legal heirs of the deceased joint owner Dilipsinh Ganpatsinh is certified in the revenue record and after title clearance certificate is obtained, sale deed would be executed in favour of the plaintiff. It is averred by the plaintiff that as some of the co-owners expired, he impleaded the legal heirs of the deceased co-owners as party defendant Nos. 8 to 18 in the Suit.
3.2 It is further case of the plaintiff that he called upon the defendant Nos. 1 to 18 to execute the sale deed by notice dated 4.4.2018. However, behind the back of the plaintiff, they fraudulently executed registered sale deed dated 5.7.2018 in favour of defendant Nos. 19 and 20 without issuance of any title clearance notice. It is contended by the plaintiff that though he was ready and willing to pay the balance consideration and get the title cleared, instead of selling the suit land to him, defendant Nos. 1 to 18 fraudulently sold the suit land to defendant Nos. 19 and 20.
Page 2 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022C/AO/175/2021 CAV ORDER DATED: 09/06/2022 Under this circumstance, the plaintiff was constrained to file Special Civil Suit No. 262 of 2018 in the Court of Civil Judge, Vadodara for specific performance of agreement to sell and to cancel the registered sale deed executed by defendant Nos. 1 to 18 in favour of defendant Nos. 19 and
20. Along with the suit, plaintiff had also moved an application for interim injunction vide Exh-5.
3.3 The application for interim injunction moved by the plaintiff came to be rejected by the trial Court on the ground that all the three ingredients for granting interim injunction namely prima-facie case, balance of convenience and irreparable loss are not in favour of the plaintiff and also on the ground that defendant Nos. 19 and 20 are bonafide purchaser without any notice of the agreement to sell between plaintiff and rest of the defendants as that agreement to sell was unregistered one. Being aggrieved by this Order of the trial Court rejecting the interim injunction application, the plaintiff has preferred this Appeal from Order challenging the findings of the facts by the trial Court.
4. Heard Ms. Sangeeta Pahwa, learned advocate for the plaintiff-appellant, Mr. R.S. Sanjanwala, learned Senior Counsel for Mr. Dhruv Dave, learned advocate for defendant Nos. 19 and 20 as well as Mr. Dave, learned Senior Counsel for Mr. Prerak Oza, learned advocate for defendant Nos. 8 to 18. Perused the Written Submissions and the Citations cited by both the sides and the material Page 3 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 placed on record.
5. Ms. Sangeeta Pahwa, learned advocate for the plaintiff, while referring to the pleadings of the parties and the documentary evidence produced with paper-book, has vehemently submitted that trial Court has failed to consider that all the three ingredients namely prima-facie case, balance of inconvenience and irreparable injury are in favour of the plaintiff. She has submitted that there was a previous agreement to sell entered into between the plaintiff and the defendant Nos. 1 to 7 and the sale consideration was more than Rs.11 Crore. She has submitted that part consideration was paid to defendant Nos. 1 to 7 at the relevant point of time. She has also contended that though the said agreement to sell is unregistered, in a Suit for specific performance of contract, same can be taken into consideration. She has submitted that the observation of the trial Court that the agreement to sell is an unregistered one, and therefore, cannot be looked into, is legally not sustainable. She has also submitted that the plaintiff has also issued notice seeking specific performance of the contract to the defendants, however, they did not reply it nor title clearance was issued, instead they have sold the land in question in favour of defendant Nos. 19 and 20.
5.1 According to submission of Ms. Pahwa, as per the averment made in the Written Submission in Para-10, the defendant Nos. 19 and 20 were aware about the notice dated Page 4 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 14.11.2017 and thus they had knowledge regarding the agreement to sell between plaintiff and the rest of the defendants. She has submitted that the sale consideration, as recorded in the registered sale deed between defendant Nos. 1 to 18 and 19 & 20, is just for Rs. 7.50 Crore whereas the agreed sale consideration in agreement to sell was more than Rs. 11 Crore. According to Ms. Pahwa, this fact itself is sufficient, prima facie, to believe that the subsequent sale is not a bonafide one and subsequent purchaser cannot be treated as a bonafide purchaser. For her submissions, she has relied upon the order of this Court passed in Appeal from Order No. 457 of 2016 in the case of Ghanshyambhai Dhirubhai Barvaliya v. Rasikbhai Dhirubhai Ambaliya.
5.2 Ms. Pahwa, learned advocate has submitted that after purchasing the suit land, there was undue haste on the part of defendant Nos. 19 and 20 to convert the land into NA and this gesture shows that they are not the bonafide purchaser.
5.3 According to her submission, there is a prima facie case in favour of the plaintiff inasmuch as (i) there is an agreement to sell which is executed by the defendants (ii) plaintiff has given notice for execution of the registered sale deed and has shown readiness and willingness to perform his part of contract and (iii) the defendant Nos. 1 to 18 in undue haste has sold the suit land to defendant Nos. 19 and 20 for consideration lower than the consideration offered by the plaintiff and has thus breached the contract. Regarding Page 5 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 balance of convenience, she has submitted that the trial Court has failed to appreciate that the defendant Nos. 1 to 18 have already sold the Suit land to the defendant Nos. 19 and 20 and defendant Nos. 19 and 20 may sold the Suit land in future. Therefore, the right of the plaintiff would be seriously affect and if the interim injunction is not granted, the plaintiff would suffer irreparable loss whereas if injunction is granted, the defendant Nos. 19 and 20 would not suffer any loss because they are in possession of the Suit land. She has also submitted that the trial Court has failed to take into consideration that defendants are ready and willing to pay back Rs. 2,50,000/- with interest which supports the case of the plaintiff that there was agreement to sell entered into between them. Ms. Pahwa, learned advocate submitted that the question is whether the defendant Nos. 19 and 20 are bonafide purchaser or not is a question of fact which needs to be decided at the trial and at the initial stage of interim injunction, such question cannot be decided in favour of the defendants. She has submitted that the trial Court has committed mistake of law in holding that defendant Nos. 19 and 20 are bonafide purchaser.
5.5 Ms. Pahwa, learned advocate has also submitted that even in view of the Section 10 of the Specific Relief Act, unless and until the contrary is proved, the Court has to presume that breach of contract to transfer immovable property cannot be adequately compensated in terms of money. She has submitted that this legal presumption has also not Page 6 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 been considered by the trial Court while rejecting application of the plaintiff. She has submitted to set-aside the impugned order of the trial Court and to grant interim injunction as prayed for by the plaintiff in Exh-5 in Special Civil Suit. She has relied upon the following decisions :
(1) Kaushik Rajendra Thakore v. Allied Land Corporation & Ors, reported in 1987 (1) GLH (UJ) 22, it is observed that:
"The proviso to Section 49 of the Registration Act makes it abundantly clear that the suit of the plaintiff would not fail on the ground of compulsory registration introduced by amendment to Section 17 by Gujarat Act 7 of 1982. This contention was not originally raised in the trial proceedings, but we permitted that learned advocate for the appellant to argue on this contention, as it is purely a question of law. We reject the same contention, however, by relying on the proviso to Section 49 of the Registration Act, 1908."
(2) Nitinkumar Laxmidas @Lakhubhai & Ors. v. Smt. Savitaben Pranshankar & Ors, reported in 1996 (1) GLH 224;
(3) Dalpat Kumar v. Prahlad Singh, reported in 1992 (1) SCC 719;
(4) Swastik Builders, Nagpur and another v. Dr. Shobha Page 7 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 W/o. Bhaskar Kaore & Ors, reported in 2021 (4) Mh.L.J. 397, wherein in paras-18, 19 and 20 it is observed that:
"18. Insofar as the Letters Patent Appeal No.549 of 2009 is concerned, the appellant is the purchaser, who has purchased a shop block admittedly after passing of the decree. The plea of the appellant in the said appeal is that the appellant is bonafide purchaser for value without notice. It is settled principle in law that onus of proof of good faith is upon the subsequent purchaser, who takes a plea that he is an innocent or bonafide purchaser for value without notice of the original contract. There is no ground raised or any statement in the appeal memo by the appellant-purchaser that he had made any enquiry or taken search in respect of title of property in dispute before producing the property in dispute. It is also not stated in the appeal memo that the purchaser had published public notice before purchase of property in dispute. To consider the submission about bonafide purchaser for value without notice, it is necessary to draw analogy from Rule 102 of Order XXI of the Code of Civil Procedure, which reads as under:
"Rule 102. Rules not applicable to transferee pendente lite - Nothing in Rules 98 and 100 shall apply to resistance or obstruction in execution of a decree for the possession of immovable property by a person to whom the judgment-debtor has transferred the property after the institution of the suit in which the decree was passed or to the dispossession of any such person".
19. The Hon'ble Supreme Court in the case of Usha Sinha Vs. Dinaram and others reported in (2008) 7 SCC 144, had occasioned to consider the dispute of transferee from the Page 8 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 judgment- debtor and in paragraph no. 17, the Hon'ble Supreme Court has held as under:
"Rule 102 clarifies that Rules 98 and 100 of Order 21 of the Code do not apply to transferee pendente lite. That Rule is relevant and material and may be quoted in extenso:
"102. Rules not applicable to transferee pendente lite
- Nothing in Rules 98 and 100 shall apply to resistance or obstruction in execution of a decree for the possession of immovable property by a person to whom the judgment-debtor has transferred the property after the institution of the suit in which the decree was passed or to the dispossession of any such person".
Bare reading of the rule makes it clear that it is based on justice, equity and good conscience. A transferee from a judgment debtor is presumed to be aware of the proceedings before a Court of law. He should be careful before he purchases the property which is the subject- matter of litigation. It recognizes the doctrine of lis pendens recognized by Section 52 of the Transfer of Property Act, 1882. Rule 102 of Order XXI of the Code thus takes into account the ground reality and refuses to extend helping hand to purchasers of property in respect of which litigation is pending. If unfair, inequitable or undeserved protection is afforded to a transferee pendente lite, a decree-holder will never be able to realize the fruits of his decree. Every time the decree- holder seeks a direction from a Court to execute the decree, the judgment-debtor or his transferee will transfer the Page 9 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 property and the new transferee will offer resistance or cause obstruction. To avoid such a situation, the rule has been enacted".
20. The Apex Court in the said judgment of Usha Sinha (supra) has referred to the judgment of the Hon'ble Supreme Court in the case of Silver Line Forum Vs. Rajiv Trust reported in 1998 (3) SCC 723, wherein it has been held that the person purchasing property from the judgment-debtor during pendency of the suit has no independent right to property to resist, obstruct or object the execution of a decree.
(5) Ghanshyambhai Dhirubhai Barvaliya v. Rasikbhai Dhirubhai Ambaliya, order dated 10.1.2017 passed in Appeal From Order No. 457 of 2016;
(6) Maharwal Khewaji Trust (Regd.) Faridkot v. Baldev Dass, reported in (2004) 8 SCC 488, it is observed in Para-10 as under:
"10. Be that as it may, Mr. Sachhar is right in contending that unless and untill 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 Page 10 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 scheduled property to better use. We do not think in the 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".
(7) Dev Prakash & Anr. v. Indra & Anr., reported in (2018) 14 SCC 292, observation is made in Para-13 to the following effect:
"It is the very essence of the concept of temporary injunction and Receivership during pendency of a civil litigation involving any property is to prevent its threatened wastage, damage and alienation by any party thereto, to immeasurable prejudice to other side or to render situation irreversible not only to impact upon ultimate decision but also to render relief granted illusory. Judicial discretion has to be disciplined by jurisprudential ethics and can by no means conduct itself as an unruly horse".
(8) Ibrahim Shah Mohamad & Ors v. Noor Ahmed Noor Page 11 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 Mahamed & Ors, reported in (1983) 2 GLR 961, the following observation is made in Para-21:
"The Court should always lean towards seeing that there is no multiplicity of proceedings and also that the proceedings should go on as far as possible so smooth that the decision can be arrived at between the parties who are on record as early as possible.
(9) Order dated 15.3.2022 passed by this Court in the case of Gitaben Govindbhai Patel v. Rameshbhai Hirabhai Patel in Appeal from Order No. 35 of 2021, the Para-13 reads as under:
"Now, it is well settled principle of law that so far as the suit based on agreement to sell for specific performance of contract, even if that agreement to sell is not registered, same can be considered for collateral purpose. Such agreement to sell can be considered for the purpose of Section 53A of the Transfer of Property Act. Even an unregistered document can be used as evidence for collateral purpose. If there is contract of agreement to sell and the same is not refused by the defendant and further when legal notice has been issued to the defendant for purpose of that contract, if no injunction is granted in favour of the plaintiff, then, there might be multiplicity of litigation in case defendant transfers the property during the pendency of the litigation. Since the right of property is involved in respect of agreement to sell, it is necessary that nature of the property does not change hand or does not change its status during the pendency of the suit".Page 12 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022
C/AO/175/2021 CAV ORDER DATED: 09/06/2022 (10) Bharatkumar Ishwarlal Miterani and Ors v. Girishbhai Manubhai and Ors, reported in (2014) 1 GLH 326, it is observed in Para-38 as under:
"38. The plain language of sub section (b) of section 19 shows that subsequent transferee can retain the benefit of his transfer by purchase, which prima facie, he had no right to get, only after satisfying two conditions i.e. (1) he must have paid the full value for which he purchased the property and (2) he must have paid it in good faith and without notice of prior contract. The burden of proof is upon the subsequent purchasers to establish existence of these two conditions in order to see that his right may prevail over the prior agreement of sale. In order to see whether the said conditions are fully satisfied or not, let us see how the consideration has been paid by the subsequent purchasers to the vendors. Admittedly, in the instant case, the full amount agreed between the vendors and the subsequent purchasers was not paid when the sale deed was executed on 20.6.2011. As recorded herein above, the subsequent purchasers issued six post dated cheques of Rs.12,50,625/- each payable on every 10th day of month of July, 2011 to December, 2011. What is specified in the provisions is that the amount ought to have been actually paid and that is the reason why sub section (b) of section 19 protects the bona fide purchaser, who had parted with his money and without notice of the prior agreement. Otherwise, the provisions would lead unscrupulous purchaser to exploit the situation. In order to invoke provisions under section 19(b), the subsequent purchasers should have entered into transaction bona fidely and that he ought to have paid the entire amount Page 13 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 and that he had no notice. These ingredients have to be established by the subsequent purchasers and onus lies on him. In the case on hand, these ingredients, more particularly payment of full value on the date of execution of sale deed, is lacking. It is so because the purchasers have filed suit on 20.6.2011 and the subsequent purchasers have filed their written statement in the trial Court on 7.7.2011. Meaning thereby, when summons/notices of the suit were served upon the subsequent purchasers, notice as to existence of the suit agreement came to the knowledge of the subsequent purchasers and on such date, the subsequent purchasers have not paid full value, but they have paid only Rs.15 lac. It follows therefore, that unless the subsequent purchasers pays the entire money or its equivalent before the subsequent purchasers had any such notice, the subsequent purchasers will not be entitled to the protection. For the sake of repetition, it requires to be noted that what is specified in the provisions is that the amount has been actually paid and that is the reason why sub section (b) of section 19 protects the bona fide purchaser, who had parted with full money and without notice of the prior agreement. Apart from this, whether the subsequent purchasers have notice of the suit agreement is also a question of fact which needs to be tested at the time of leading evidence. The ratio laid down in the cases of Durga Prasad (supra), Rameshwar Singh (supra), Smt. H.R. Irani (supra), Manjunath Anandappa Urf Shivappa Hansi (supra) and M/s Ciba Geigy Ltd. (supra) cited by learned advocate Mr. Patel is to show that burden to prove that the subsequent purchasers has knowledge of prior contract is on the purchasers since the subsequent purchasers has clearly pleaded want of knowledge about existence of prior Page 14 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 contract. There is no disagreement on the proposition of law laid down in the case cited at bar, but the Court cannot held mini trial at this stage to examine whether the subsequent purchasers have notice of the suit agreement or not prior to execution of the registered sale deed. But with unusual rapidity with which the sale deed is carried out is an important circumstances as it shows an extraordinary and unusual carrying through of sale in respect of immovable property involving huge consideration of more than Rs.1 crore. Normal procedure for sale/purchase of immovable property as a rule are not such which is adopted in the present case. Hence, required ingredients of section 19(b) of Specific Relief Act are missing in this case and hence, the protection of section 19(b) is not available to the subsequent purchasers".
(11) Adani Exports Limited v. Hindustan Organic Chemicals, reported in 2000 (3) GLR 2759, Para-32 reads as under:
"32. It is also well settled principle of law that in order to make out a prima facie case, necessary for granting an interlocutory injunction, the plaintiff need not establish his title. It is enough if he can show that he has a fair question to raise as to the existence Downloaded on : Tue Jun 07 11:21:12 IST 2022 of right which he alleged and can satisfy the court that the property in dispute should be preserved in its present actual condition until such question is disposed of. The court must also, before disturbing any man's legal right stripping him off any of the rights with which law has clothed him, be satisfied that the probability is in favour of his case ultimately failing in the final issue of the suit. 32.1 It is also a well Page 15 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 settled principles of law that what the Court has to determine in granting injunction is whether there is a bona fide contest between the parties and when there is a fair & substantial question to be decided as to the rights of the parties in the suit, it is not necessary for the purpose nor is it right that the Court should further examine the question in dispute or anticipate the decision of the question in the suit itself. 32/2 Keeping in mind, the above legal position, it clearly appears that the plaintiff has made out his prima facie case on the ground that no concluded and enforeable agreement has come into existence and that fraud has been committed by defendant no.1, when it invited to make offer, by floating Tenders.
(12) Motilal Jain v. Ramdasi Devi, reported in 2000 (6) SCC 420, the observation in Para-12 to the effect that merely because the plaintiff claims damages in a suit for specific performance of contract as alternative relief, it cannot be said that he is not entitled to the main relief of specific performance of contract itself.
6. Mr. R.S.Sanjanwala, learned Senior Counsel for Mr. Dhruv K. Dave, learned advocate for the defendant Nos. 19 and 20 who are new purchaser and real contestants of the suit, has vehemently submitted that the Suit property is an ancestral property and agreement to sell was executed only by 5 to 6 members out of 18 members. Mr. Sanjanwala has submitted that only defendant Nos. 1 to 7 have executed the agreement to sell dated 22.8.2017 whereas other defendants were no parties to the said agreement to sell.
Page 16 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022C/AO/175/2021 CAV ORDER DATED: 09/06/2022 He has also submitted that there was a condition in the agreement to sell that the land has to be sold to the plaintiff only after final plot is allotted and no such final plot is still allotted. He has also submitted that so far as the defendant Nos. 19 and 20 are concerned, they are the bonafide purchasers of the suit land and sale deed has been executed by all the family members. He has also submitted that upon issuance of the notice, the objection was raised by one of the defendants who is the legal heirs of the deceased and has clearly refused to act according to the agreement to sell and this objection is dated 14.4.2017. He has submitted that when objection was raised by one of the defendants heir, the plaintiff did not acted immediately. He has also submitted that no title clearance certificate was available with the plaintiff and he has also not paid the entire consideration to the defendants. He has also submitted that there was no action taken by the plaintiff for 4 to 5 months and only on 4.4.2018, legal notice was issued by plaintiff that too to only 7 defendants whereas no notice was issued to rest of the defendants.
6.1 Mr. Sanjanwala, learned Senior Counsel also submitted that the averment regarding oral talk by the parties as alleged by the plaintiff is not plausible. He has also submitted that there was mutation entry entered into revenue record in April, 2018 and same came to be certified in June, 2018 itself. He has also submitted that even the plaintiff has not made any offer regarding the further payment of consideration in its legal notice. He has submitted that rest Page 17 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 of the defendants have executed registered sale-deed in favour of defendant Nos. 19 and 20 on 5.7.2018 and defendant Nos. 19 and 20 have paid huge consideration of Rs. 7.50 Crore and mutation entry has already been made in the revenue record. He has also submitted that there was delay on the part of plaintiff in prosecuting the legal remedy as can been seen from the pleadings of the plaintiff. He has also submitted that the defendant Nos. 19 and 20 being bonafide purchasers have already got NA permission from the authorities and since they are bonafide purchaser without notice, no injunction needs to be granted against them. He has further submitted that there was no part performance and even defendant Nos. 8 to 18 were not the signatories to the agreement to sell and, therefore, they cannot be compelled to sell their part of the property to the plaintiff. He has supported the impugned order of the trial Court rejecting the interim injunction application of the plaintiff. Regarding the decisions relied upon by the plaintiffs side, he has submitted that these are not applicable to the facts of the present case. He has submitted that even if no public notice has been issued by the defendant Nos. 19 and 20 before purchasing of the suit land from rest of the defendants, that fact cannot be considered to the effect that defendant Nos. 19 and 20 are not the bonafide purchase. He has submitted that the sale transaction of the defendant Nos. 19 and 20, is on the market price and, therefore, merely because there was earlier amount of consideration higher than the present one, that fact itself cannot be considered Page 18 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 to be factor to hold that the defendant Nos. 19 and 20 are not bonafide purchaser. He has prayed to dismiss the present Appeal from Order.
7. Mr. Dave, learned Senior Counsel for the defendant Nos. 8 to 18 has vehemently submitted that they were not party to the agreement to sell and they are true owners of the property having their share in the suit property. He has submitted that Section 19 of the Specific Relief Act, the same cannot be applied against defendant Nos. 8 to 18. He has submitted that agreement to sell upon which the plaintiff is heavily relying, is not binding to the defendant Nos. 8 to 18 as they were not party to the alleged agreement to sell. He has also submitted that the plaintiff has approached the Court after delay as can be seen that the date of agreement is 22.8.2017 against which objections were raised by some of the defendants dated 14.11.2017 and they refused to abide by the agreement to sell. He has submitted that the date of the Suit is 7.9.2018. Thus, though plaintiff was already informed by the defendants, who was not signatory to the agreement to sell in November, 2017, the plaintiff did not take any action till September, 2018 and this delay part would dis-entitle the plaintiff from claiming any equitable relief of interim injunction.
7.1 Mr. Dave, learned Senior Counsel has also submitted that the sale deed in favour of defendant Nos. 19 and 20 was entered into before the filing of the Suit i.e. on 5.7.2018. He Page 19 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 has also submitted that there is no legal requirement of the law as to publication of the public notice as to get title clearance of the property, to be issued by the proposed purchaser. He has submitted that the purchaser has only to check the revenue records of the property in question. He has also submitted that adequacy of the consideration is not ground available in law to be challenged by the parties to the contract and only the parties to the contract can raise any such question but in the present case the plaintiff cannot raise such question regarding the difference of consideration amount between two transactions. He has submitted that in the case of Ambalal Sarabhai Enterprise v. K.S. Infra (Supra), the Apex Court has held the delay of 7 months as unreasonable, whereas in present case after raising objection by the defendants, the suit was filed almost 10 months later.
7.2 Mr. Dave, learned Senior Counsel also submitted that interference in the impugned order or the trial Court is very much limited and, therefore, this Court may not disturb the impugned order merely because second view of the facts is possible. He has also submitted that even from the filing of the suit till the final hearing of this Appeal from Order, there is no injunction in favour of the plaintiff. He has submitted that the decision relied upon by the plaintiff's side is factually not applicable to the present case. He has submitted to dismiss the present Appeal from Order.
7.3 The defendants' side has relied upon the following Page 20 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 decisions:
(1) Ambalal Sarabhai Enterprise v./ K.S. Infra passed in Civil Appeal No. 9346 of 2019, decision of the Hon'ble Apex Court dated 6.1.2020, the Paras-15, 16, 19 23 read as under:
"15. Chapter VII, Section 36of the Specific Relief Act, 1963 (hereinafter referred to as 'the Act') provides for grant of preventive relief. Section 37provides that temporary injunction in a suit shall be regulated by the Code of Civil Procedure. The grant of relief in a suit for specific performance is itself a discretionary remedy. A plaintiff seeking temporary injunction in a suit for specific performance will therefore have to establish a strong prima-facie case on basis of undisputed facts. The conduct of the plaintiff will also be a very relevant consideration for purposes of injunction. The discretion at this stage has to be exercised judiciously and not arbitrarily.
16. The cardinal principles for grant of temporary injunction were considered in Dalpat Kumar vs. Prahlad Singh, (1992) 1 SCC 719, observing as follows :
"5...Satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The Court further has to satisfy that non-interference by the Court would result in "irreparable injury" to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury or dispossession. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury, but means only that the injury must be a material one, namely one that cannot be adequately compensated by way of damages. The third condition also is that "the balance of convenience" must be in favour of granting injunction. The Court while granting or refusing to grant injunction should exercise sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties, if the injunction is refused and compare it with that which is likely to be caused to the Page 21 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 other side if the injunction is granted. If on weighing competing possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit, the subject matter should be maintained in status quo, an injunction would be issued. Thus the Court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit."
19. In a matter concerning grant of injunction, apart from the existence of a prima facie case, balance of convenience, irreparable injury, the conduct of the party seeking the equitable relief of injunction is also very essential to be considered as observed in Motilal Jain (supra) holding as follows :
"6. The first ground which the High Court took note of is the delay in filing the suit. It may be apt to bear in mind the following aspects of delay which are relevant in a case of specific performance of contract for sale of immovable property:
(i) delay running beyond the period prescribed under theLimitation Act;
(ii) delay in cases where though the suit is within the period of limitation, yet:
(a) due to delay the third parties have acquired rights in the subject-matter of the suit;
(b) in the facts and circumstances of the case, delay may give rise to plea of waiver or otherwise it will be inequitable to grant a discretionary relief."
23. Wander Ltd. (supra) prescribes a rule of prudence only. Much will depend on the facts of a case. It fell for consideration again in Gujarat Bottling Co. Ltd. vs. Coca Cola Co., (1995) 5 SCC 545, observing as follows :
"47....Under Order 39 of the Code of Civil Procedure, jurisdiction of the Court to interfere with an order of interlocutory or temporary injunction is purely equitable and, therefore, the Court, on being approached, will, apart from other considerations, also look to the conduct of the party invoking the jurisdiction of the Court, and may Page 22 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 refuse to interfere unless his conduct was free from blame. Since the relief is wholly equitable in nature, the party invoking the jurisdiction of the Court has to show that he himself was not at fault and that he himself was not responsible for bringing about the state of things complained of and that he was not unfair or inequitable in his dealings with the party against whom he was seeking relief. His conduct should be fair and honest...."
(2) Patel Harji Shamji & Ors v. Dharmji M. Shivla, reported in (2019) 1 GLR 67;
(3) Mandali Ranganna & Ors v. T. Ramachandra & Ors, reported in (2008) 11 SCC 1, para-21 and 22 read as under:
"21. While considering an application for grant of injunction, the court will not only take into consideration the basic elements in relation thereto, viz., existence of a prima facie case, balance of convenience and irreparable injury, it must also take into consideration the conduct of the parties.
22. Grant of injunction is an equitable relief. A person who had kept quiet for a long time and allowed another to deal with the properties exclusively, ordinarily would not be entitled to an order of injunction. The court will not interfere only because the property is a very valuable one. We are not however, oblivious of the fact that grant or refusal of injunction has serious consequence depending upon the nature thereof. The courts dealing with such matters must make all endeavours to protect the interest of the parties. For the said purpose, application of mind on the part of the courts is imperative. Contentions raised by the parties must be determined objectively".Page 23 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022
C/AO/175/2021 CAV ORDER DATED: 09/06/2022 (4) Envision Engineering v. Sachin Infra Envio Ltd. & Ors, reported in 2002 (3) GLR 379;
(5) Veetrag Holdings v. Gujarat State Textile Corporation Ltd, 1996 (3) GLR 536, wherein in Para-9 it was observed that the delay in filing suit for specific performance would dis-entitle the plaintiff to the equitable relief of injunction.
(6) Saketh India Ltd. & Ors. v. India Securities Ltd. , reported in (1999) 3 SCC 1;
(7) Mangabhai Jadavbhai Makwana v. Tekchand Chhaganlal Shah and Others, reported in 2014 AIR (Gujarat) 12;
8. In rejoinder, Ms. Pahwa, learned advocate for the plaintiff has submitted that defendant Nos. 8 to 18 now has no locus-standi as they have already sold the property to defendant Nos. 19 and 20, and therefore, the contention raised by defendant Nos. 8 to 18 does not required to be considered. She has submitted that only defendant No. 19 and 20 are aggrieved party. She has also submitted that as per the agreement to sell, only defendant Nos. 1 to 7 are the owners and the heirs of the deceased Dilipsinh has been joined on 22.9.2017. She has submitted that so far as the names of defendant Nos. 8 to 18 are concerned, they have been mutated recently on 12.4.2018 in the revenue record and their names have been entered in the revenue Page 24 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 record after the agreement to sell executed in the year 2017. She has also submitted that regarding the public notice, objections were raised only by defendant Nos. 1, 2, 3, 9 and 17. She has also submitted that the defendant Nos. 19 and 20 cannot be said to be bonafide purchaser as they were having knowledge of issuance of notice by plaintiffs and therefore, they have purchased the land in question subject to the right of the plaintiff regarding specific performance of agreement to sell. She has submitted that there is no question of any delay on the part of plaintiff as the sale transaction has been entered into in respect of defendant Nos. 19 and 20 on 5.7.2018 and, therefore, as soon as cause of action has arisen, the plaintiff has preferred the Suit immediately.
8.1 Ms. Pahwa, learned advocate has also submitted that new purchaser have not issued any public notice for title clearance and, therefore, on this count also they cannot be treated as a bonafide purchaser. She has submitted that they must seek title clearance by public notice. She has submitted that Section 12 of the Specific Relief Act as well as Section 25 of the Contract Act are not applicable in the present case. Regarding the various decisions cited, which includes Ambalal Sarabhai's case (Supra) on the point of delay, she has submitted that the facts of those cases are different from present case. She has submitted that in case of Ambalal only MoU was entered into and there was no agreement or contract between the parties and time was essence of the contract and it was a commercial transaction Page 25 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 and contract was not concluded. She has also submitted that the judgment of High Court in the case of Motilal Jain v. Ramdasi Devi (Supra) has already been set-aside. She has submitted that considering the decision cited by her, which are applicable to the facts of the present case and the question as to whether defendant Nos. 19 and 20 are bonafide purchasers or not, needs to be decided after trial, but, the interim injunction in favour of the plaintiff needs to be granted. She has prayed to allow the present Appeal from Order and grant interim injunction in favour of plaintiff.
9. Having considered submissions made on behalf of both the sides coupled with the material placed on record and the various pronouncement which are referred to hereinabove, it emerges from the record that there is no dispute as to the facts that defendant Nos. 1 to 7 had agreed to sell the Suit land to the plaintiff on certain conditions as per the agreement to sell dated 22.8.2017 for consideration of Rs. 11.30 Crore. There is also various conditions incorporated in the said agreement to sell, which includes the title clearance and mutation of the names of the heirs of the deceased Dilipsinh. It reveals from the record that the plaintiff has given notice for title clearance in the Newspaper on 8.11.2017. Against the notice, defendant Nos. 1 to 3 and 9 and 17 have raised objection on 14.11.2017. It reveals from the said objections that respective defendants have clearly contended that the suit land is an ancestral property and they have heir-ship right in Page 26 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 the property and, therefore, since the transaction was entered into without their consent, no title clearance certificate be issued. It also reveals that as per objection, the specific averment has been made by the signatory to the agreement to sell that the plaintiff has not fulfilled his part of the agreement to sell and, therefore, the sellers are not ready to execute the same and informed the advocate of the plaintiff to take back the amount of consideration paid by the plaintiff and to issue receipt thereof.
10. It also reveals from the record that after receipt of the said objection in November, 2017, the plaintiff has issued legal notice on 4.4.2018 to defendants for withdrawal of the objections raised by them against the public notice and get title clearance certificate and to execute the sale deed in favour of the plaintiff, as per the agreement to sell entered into between the parties within 15 days thereof. It appears that this notice has not been replied by the concerned defendants. It also reveals from the record that defendant Nos. 1 to 7 have got entered the names of defendant Nos. 8 to 18 in revenue record vide entry No. 7124 dated 12.4.2018. It also reveals from the record that on 5.7.2018, defendant Nos. 1 to 18 have executed sale deed in favour of defendant Nos. 19 and 20 for sale consideration of Rs. 7.50 Crore. It reveals that such transaction was made without any public notice, without any title clearance certificate. However, the fact remains that from the date of raising of the objections i.e. 14.11.2017, till issuance of legal notice i.e. 4.4.2018, no action was taken by the Page 27 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 plaintiff in respect of the alleged agreement to sell, especially when the concerned defendants have clearly denied to execute the sale deed and directed the plaintiff to get refund of consideration paid by him. It also appears that after issuance of notice on 4.4.2018 wherein time limited to execute sale deed and to withdraw the objection against title clearance within 15 days was fixed, no action was initiated by the plaintiff till the date of filing of the suit i.e. on 7.9.2018. Thus, when the sale deed was executed on 5.7.2018, the plaintiff has not approached the Court immediately but has waited for two months. The explanation given by the plaintiff for not taking any action in between the raising of objections by the defendants against the title clearance and issuance of legal notice, that there was oral conversion between the parties is concerned, is not plausible one. More so, when 15 days time after issuance of the legal notice dated 4.4.2018 was already expired and the original owner of the property have not complied with the notice within the stipulated period of 15 days, the plaintiff has waited for 5 months even thereafter. Not only that even after sale transaction, between defendant Nos. 1 to 8 in favour of defendant Nos. 19 and 20 in July, 2018, the plaintiff has filed the Suit in September, 2018 for equitable relief.
11. It also reveals from the record that the sale consideration as reflected in the agreement to sell is of Rs. 11.30 Crore whereas the sale consideration paid by the new purchaser is Rs. 7.50 Crore, this fact has been heavily agitated by the Page 28 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 plaintiff to show that the transaction entered into between defendants is not bonafide one. This stand of the plaintiff is plausible. However, considering the facts of the present case, it clearly reveals that the sale transaction entered in favour of the new purchaser is by all the legal heirs of the original owners who have their shares in the property, which is admittedly an ancestral property, whereas, in the agreement to sell, there are only 7 signatories. It also reveals that against sale transaction of Rs. 11.30 Crore, as reflected in the agreement to sell, the plaintiff has paid meager amount of Rs. 2,50,000/- whereas new purchaser has paid the entire sale transaction to the defendant sellers. Of course, there is reduction of sale consideration, but, it is for the concerned seller to fix a rate of consideration for selling of his property. There are many factors which may affect the price of the immovable property. Of course, it is common tendency that price of the property is day by day increasing but there are certain factors which may affect the reduction of price in the property. Therefore, merely because the property is sold on lesser consideration then the previous one, it does not ipso-facto make the subsequent transaction illegal or malafide. In the facts of the present case, at the cost of repetition, it needs to be observed that plaintiff was within the knowledge that the original signatory to the agreement to sell have refused in November, 2017 to execute the sale deed in his favour, and therefore, the point raised by the plaintiff regarding the less amount of consideration of the suit land, need not be considered at this stage in the Page 29 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 present case. However, the observation of the trial Court regarding the non-consideration of the agreement to sell as it is unregistered is concerned, the observations of the trial Court is not proper, as held by this Court in the Appeal from Order No. 35 of 2021. Unregistered agreement to sell can be considered for a collateral purpose in a suit for specific performance of a contract.
12. Further, the observation of the trial Court that the new purchaser are the bonafide purchaser is, its prima-facie opinion. Considering the factual aspect, as referred to hereinabove, keeping silence by the plaintiff even after dis- inclination on the part of the original signatories to the agreement to sell to execute the sale deed way back in the November, 2017, the equitable relief of interim injunction need not be granted in favour of the plaintiff. Further, since it is well settled principle of law that in an Appeal against exercise of "discretion" by the Court of first instance, the power of appellate Court to interfere with the exercise of discretion is restrictive. Merely because, on facts, the appellate Court would have concluded differently from that of the Court below, that would not by itself, provide justification for appellate Court to interfere. To justify interference, the Appellant would have to demonstrate that the discretion has been shown to have been exercised arbitrarily or capriciously or perversely or whether the Court had ignored the settled principle of law regulating grant or refusal of interlocutory injunction. An appeal against exercise of discretion is an appeal on Page 30 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022 C/AO/175/2021 CAV ORDER DATED: 09/06/2022 principle. Considering this well settled principles, it appears that considering the peculiar facts and circumstances of this case, though the observation of the trial Court on the point of unregistered agreement to sell is not proper, the conclusion arrived at by the trial Court is plausible one. Therefore, this Court does not consider it proper to interfere with the impugned discretionary order passed by the trial Court in rejecting the application of interim injunction of the plaintiff.
13. In view of the above discussion, the present Appeal from Order is hereby dismissed.
Considering the fact that the suit is of the year 2018, the trial Court is hereby directed to expedite the hearing of the same and try to dispose it of as early as possible, preferably within a period of 4 months from the date of receipt of this order. The parties are directed to cooperate with the trial Court in early disposal of the suit, as aforesaid.
No order as to costs.
In view of the above, the Civil Application also stands disposed of accordingly.
(DR. A. P. THAKER, J) SAJ GEORGE Page 31 of 31 Downloaded on : Fri Jun 10 21:01:08 IST 2022