HONOURABLE SRI JUSTICE M.S. RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTICE T. VINOD KUMAR
Civil Miscellaneous Appeal No.250 of 2021
JUDGMENT : (Per Sri Justice M.S.Ramachandra Rao)
This appeal is filed against the order dt.10.03.2021 passed in
Interlocutory Application No.365 of 2020 in Original Suit No.58 of 2020
on the file of Special Judge for Trial of Offences under Schedule Tribe
and Schedule Caste (Prevention of Atrocities) Act, 1989 - cum - V
Additional District and Sessions Judge, Medchal, at Sanga Reddy.
2. The appellant herein is 1st defendant in the above suit.
The case of 1st respondent / plaintiff in the suit :
3. The 1st respondent / plaintiff filed the said suit for specific performance of an Agreement of Sale dt.29.07.2009 executed by appellant in his favour agreeing to sell ten apartments in a complex, viz., Sri Ayappa Sai Ram Residency IV, as described in the plaint Schedule.
4. The 1st respondent / plaintiff contended that appellant is the absolute owner of the land on which the above complex was built having acquired the same under registered Sale Deed dt.04.02.2016, and he was in physical possession and enjoyment of the same.
5. The 1st respondent contended that appellant was in the real estate / construction business and had offered to sell the above ten flats to him MSR,J & TVK,J ::2:: cma_250_2021 for Rs.2 crores and executed Ex.P.1 - Agreement of Sale dt.29.07.2019 after receiving Rs.5 lakhs through a cheque and Rs.45 lakhs in cash as advance sale consideration on the date of agreement in the presence of witnesses.
6. It is also the contention of 1st respondent that appellant executed a separate receipt Ex.P.2 dt.29.07.2019 on the same day acknowledging receipt of the said amount.
7. The 1st respondent / plaintiff contended that as per the terms of the agreement, the appellant had to furnish to 1st respondent certain documents before the property was to be registered pursuant to Ex.P.1 - Agreement of Sale, but the appellant kept the matter pending though the 1st respondent was always ready and willing to pay the balance sale consideration.
8. He contended that the appellant had promised to the 1st respondent on 20.02.2020, along with witnesses, that he would execute Sale Deed and also register the suit schedule property in favour of 1st respondent within one (01) months.
9. Thereafter, from 22.03.2020, there was a lockdown imposed on account of COVID-19 Pandemic for three months, and only on 15.05.2020 when the lockdown was lifted, the 1st respondent could approach the appellant, and at that time the appellant refused to execute any Sale Deed.
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10. He also stated that he came to know when he obtained the Encumbrance Certificate on 04.08.2020 that Flat No.205 which was part of flats agreed to be sold under Ex.P.1 to him was sold to respondent nos.2 and 3 / defendant nos.2 and 3 under a registered Sale Deed Ex.P.4 dt.26.02.2020, and that Flat No.201 was sold in favour of respondent nos.4 and 5 / defendant nos.4 and 5 under registered Sale Deed Ex.P.5 dt.20.03.2020.
11. The 1st respondent contended that this conduct on the part of appellant was not fair since he had received a huge amount as advance under Ex.P.1 - Agreement and he cannot avoid to complete the transaction.
Written statement of 1st respondent :
12. The 1st respondent filed a written statement denying the very execution of Ex.P.1 Agreement of Sale agreeing to sell the ten flats to 1st respondent. The appellant also denied receiving Rs.50 lakhs by way of advance from the 1st respondent and denied executing Ex.P.2 - Receipt, acknowledging receipt of the said amount.
13. According to him, Ex.P.1 - Agreement of Sale is created by the 1st respondent by impersonation of signature of appellant basing on forged signature, and the suit was filed; that Ex.P.1, being a forged document, relief of specific performance cannot be granted; and that the said suit is not maintainable.
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14. Under the heading 'Additional Grounds', the appellant took the plea that it is in the construction business; that the 1st respondent was the friend of appellant's Director, that the appellant approached the 1st respondent for hand loan of Rs.2 crores, and at that time, the 1st respondent demanded the appellant for collateral security and advised the appellant to execute an Agreement of Sale for 10 flats in the complex, viz., Sri Ayappa Sai Ram Residency IV.
15. The appellant further contended that its Director sent an e-mail, and at that time, the 1st respondent had agreed to pay Rs.5 lakhs by cheque and Rs.45 lakhs by cash and remaining Rs.1.50 crores within three months through cash, and after receiving the remaining amount, the appellant promised that it would execute the mortgage deed over the suit schedule property.
16. The appellant contended that as per the oral understanding, it's Director signed on the agreement, but after completion of his (appellant's Director's) signature, the appellant requested the 1st respondent to handover the cheque and cash, that 1st respondent stated that the cheque is at his residence and he will hand over the said cheque and amount on the next day at this residence, and the appellant believed this version of 1st respondent.
17. It contended that on the next day, when the appellant approached the 1st respondent and demanded to hand over the cheque and amount as per the agreement, the 1st respondent did not hand over the cheque and cash.
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18. It contended that after it received summons from the Court below in the instant suit, the appellant verified the agreement of sale filed in the suit and to its surprise, it discovered that in the agreement of sale two papers are replaced by putting forged signatures on page nos.4 and 5 thereof, and those signatures are forged.
19. It also claimed that it filed an objection under Section 45 of the Evidence Act to send the said Agreement of Sale to a forensic laboratory for comparison of all signatures on the Agreement of Sale with original signatures of the 1st respondent. It also stated that no notice was issued prior to filing of the suit by the 1st respondent. IA No.365 of 2020
20. Along with the suit, the 1st respondent filed Interlocutory Application No.365 of 2020 under Order XXXIX Rules 1 and 2 of Civil Procedure Code, 1908 for an ad interim injunction restraining appellant and respondent nos.2 and 3 from alienating or creating any charge over the suit schedule property in favour of third - parties, pending disposal of the suit.
21. The 1st respondent reiterated the contents of plaint in the affidavit filed in support of the said application.
22. He also contended in the said application that if the appellant and respondent nos.2 and 3 are not restrained from alienating the suit schedule property, he would be put to irreparable loss and hardship which cannot be compensated in terms of money.
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The stand of appellant in Interlocutory Application No.365 of 2020 :
23. The appellant filed a counter-affidavit reiterating the contents of the Written Statement filed by it and opposing grant of interim relief. The stand of the 4th respondent
24. The 4th respondent filed a separate counter-affidavit and respondent nos.2, 3 and 5 adopted the counter of 4th respondent. They took the same stand as the appellant.
25. In addition, they also contended that the stamp alleged to have been purchased by the 1st respondent for himself was not for entering into Contract of Sale, and the signature of appellant in Ex.P.1 varies from page to page, and it is visible even to the naked eye.
26. He also contended that as per Guidelines of Reserve Bank of India, a sum of Rs.45 lakhs cannot be paid in cash and the 1st respondent had failed to file the Statement of Account to show that an amount of Rs.5 lakhs was credited and paid as alleged by 1st respondent to the appellant. They also pleaded that they are all bona fide purchasers. Order of the Court below in Interlocutory Application No.365 of 2020 :
27. Initially, Ad interim injunction was granted by the Court below on 19.08.2020 and the said injunction was made absolute by Order dt.10.03.2021 in Interlocutory Application No.365 of 2020 by the Court below.
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28. The court below referred to the contentions of parties and the documents filed by them.
29. It observed that the appellant had admitted execution of Ex.P.1 Agreement of Sale by putting signatures in page nos.1 to 3 thereof, but denied his signatures on page nos.4 and 5 of Ex.P.1. It then referred to the wording in Ex.P.1-Agreement of Sale and noted that in that agreement the appellant agreed to sell the suit schedule property to the 1st respondent for Rs.2 crores and also admitted to receiving Rs.5 lakhs by cheque and Rs.45 lakhs by way of cash, and this is also corroborated by Ex.P.2.
30. It further observed that burden is on the appellant to prove that signatures on page no.4 and 5 of Ex.P.1 - Agreement of Sale and Ex.P.2 are forged, and though the appellant referred to Ex.P.3 - Expert Report of Truth Laboratories, such report was obtained without giving any notice to 1st respondent and without sending the admitted and disputed signatures of the 1st respondent along with copy of Ex.P.1 - Agreement of Sale to the handwriting expert. Therefore it observed that Ex.R.3 - Report cannot be considered.
31. It also observed that there is no proof of the plea raised by the appellant that it approached the 2nd respondent to lend Rs.2 crores as collateral security under Ex.R.1, and there was no mortgage deed produced before the Court in support of the said plea.
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32. It then noted that Exs.P.1 and P.2 nevertheless establish receipt of Rs.50 lakhs by the appellant from the 1st respondent.
33. It then referred to the contention of respondent nos.2 to 5 (who are purchasers under Exs.P.4 and P.5 from the appellant) that the appellant is a Private Limited Company and without a resolution by the Board of Directors, any transaction made by appellant was void, but rejected the same on the ground that the executant of Exs.P.3 to P.5 was also the Director of Appellant-Company by name Sri S. Venkatram Reddy, and he had filed Vakalat representing the appellant as Director, and if he was not authorized to file the same or not authorized to execute the documents, the other Directors would have raised objections. It also recorded that the appellant admitted that he is having authority in respect of the suit schedule property and had filed Vakalat on behalf of appellant on the basis of such authority.
34. It also observed that whether it is permissible or not to receive Rs.45 lakhs in cash as recorded in Exs.P.1 and P.2, is a matter to be looked into after considering the R.B.I. Rules, and the same cannot be accepted at this stage.
35. It also rejected the plea of respondent nos.2 to 5 that each apartment costs Rs.40 lakhs and so it was not possible for the appellant to sell each flat at Rs.20 lakhs since the appellant never raised such a plea.
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36. It also observed that since the 1st respondent had contended that he had demanded from the appellant to execute a Sale Deed, non- issuance of notice will not be material. It held that whether the respondent nos.2 to 5 are bona fide purchasers or not, it can be decided only after full-fledged trial, particularly since Exs.P.4 and P.5 Sale Deeds were executed in favour of respondent nos.2 to 5 during the subsistence of Ex.P.1.
37. It then held that irreparable loss would be caused to 1st respondent if the appellant was further allowed to alienate the property and prima facie case and balance of convenience also exist in favour of 1st respondent.
The present Civil Miscellaneous Appeal
38. Challenging the same, the present Appeal is filed.
39. Heard Sri L. Ravichander, Senior Counsel appearing for Ms. Rakee Sridharan, counsel for appellant.
40. The learned Senior Counsel contended that the signature of appellant's Director had been forged by the 1st respondent on Exs.P.1 and P.2. He also sought to rely on Ex.R.3 - Report of Truth Laboratories in support of plea of forgery.
Consideration by this Court :
41. Admittedly, in the Written Statement and counter filed by appellant in the Court below, the appellant - Director admitted his MSR,J & TVK,J ::10:: cma_250_2021 signature on page nos.1 to 3 on Ex.P.1 and sought to contend that his signatures on page nos.4 and 5 only were forged, and that those two pages were changed and new matter was substituted by the 1st respondent.
42. The admission about receipt of Rs.5 lakhs by cheque and Rs.45 lakhs in cash is found on page no.2 of Ex.P.1, Agreement of Sale. Therefore, this admission on page no.2 in clause (2) of Ex.P.1 would be binding on the appellant prima facie and would also corroborate Ex.P.2 receipt which contained the same recitals.
43. Normally, when Agreements of Sale are executed a copy of the same is retained by each party, and the appellant would have also retained a copy of the original Ex.P.1 which its Director had executed in favour of 1st respondent. Why the said copy of the Agreement of Sale Ex.P.1 which the appellant possesses is not produced by the appellant, is not explained by the counsel for appellant. This conduct throws serious doubt prima facie on the case pleaded by the appellant.
44. The learned Senior Counsel then sought to contend that as per R.B.I. Rules it was not permissible to pay large sums of money as Rs.45 lakhs in cash. If there is any such infringement of the Rules framed by the R.B.I. it is prima facie open to the said authority to take appropriate action, but the appellant who had admittedly received the said money cannot rely on R.B.I. guidelines to wriggle out of its obligation under Ex.P.1 - Agreement of Sale.
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45. As rightly held by the Court below, Ex.R.3 - Expert Report, cannot be accepted prima facie at this stage since the same was obtained without the consent of 1st respondent and without taking admitted signatures of 1st respondent for the purpose of comparison.
46. The fact that Exs.P.4 and P.5 - Sale Deeds have been executed by appellant in favour of respondent nos.2 to 5 during the subsistence of Ex.P.1 - Agreement of Sale in favour of 1st respondent shows that appellant had an intention to create third-party rights which would cause prejudice to 1st respondent if interim relief were not to be granted in his favour.
47. We also do not accept the contention of counsel for appellant that each apartment costs Rs.40 lakhs and appellant would be foolish to agree to sell the apartment at Rs.20 lakhs, because there is no such plea raised by the appellant.
48. The contention of appellant that it only intended to create a security for a loan and Ex.P.1 is executed only for the said purpose, cannot be accepted prima facie, because the appellant is a Real Estate businessman and clearly understands the difference between an 'Agreement to Sell' immovable property and a 'Mortgage Deed'. Such worldly-wise person cannot be allowed to take the plea that he did not know the difference between a mortgage deed and an agreement to sell.
49. We also prima facie do not accept the contention of the counsel for appellant that after the appellant signed Ex.P.1 - Agreement of Sale, MSR,J & TVK,J ::12:: cma_250_2021 the 1st respondent promised to pay Rs.5 lakhs by cheque or Rs.45 lakhs in cash, and the appellant's Director was gullible enough to sign the document bona fidely believing the assurance of 1st respondent without receiving the said money. No prudent man, that too a real estate dealer, would normally sign any documents acknowledging receipt of money if such money was in fact not paid at the time of signing the agreement.
50. In this view of the matter, we do not find any merit in the Civil Miscellaneous Appeal. It accordingly fails and it is dismissed at the stage of admission. No order as to costs.
51. The Court below is directed to decide the suit uninfluenced by any findings or observations made in this order or in the order passed by it on 10.03.2021 in I.A.No.365 of 2020 in O.S.No.58 of 2020.
52. As a sequel, miscellaneous petitions pending if any in this Appeal, shall stand closed.
____________________________ M.S.RAMACHANDRA RAO, J _______________________ T.VINOD KUMAR, J Date: 30.06.2021 Ndr