Bombay High Court
M/S. G.E.Money Financial ... vs K.C.Sheth H.U.F And 4 Ors. And ... on 26 February, 2016
Bench: S.C. Gupte
906-NMS-45-15&641-14-S-3526-99.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO. 45 OF 2015
WITH
NOTICE OF MOTION NO. 641 OF 2014
IN
SUIT NO. 3526 OF 1999
M/s. G.E. Money Financial Services Ltd. ...Plaintiff
Versus
K.C. Sheth & Ors.
ig ...Defendants
----------
Mr. Sameer Pandit, a/w Mr. Abhijeet Sodikale, i/b Wadia Ghandy &
CO., for the Plaintiff.
Mr. S.M. Sharma, i/b M/s. M.P. Vashi & Asso., for the Applicants in
NMS/45/2014.
Mr. Nitesh Shirke, a/w Mr. A. Shirke, for the Applicant in
NMS/641/2014.
----------
CORAM : S.C. GUPTE, J.
DATE : 26th February 2016
P.C. :
1. These two Notices of Motion have been taken out by the
respective Applicants for setting aside a final Judgment and decree
dated 9th December 2013 passed by a learned Single Judge in the
Sharayu. 1/11
906-NMS-45-15&641-14-S-3526-99.doc
present Suit. The Motions contain more or less identical facts. Notice
of Motion No. 641 of 2014 is treated as a representative case for
considering the Motions.
2. The present Suit is filed by the Plaintiff as a Suit on
mortgage seeking a decree of Rs. 1,29,64,666/- together with interest
and for sale of the mortgaged property and application of the sale
proceeds towards the Plaintiff's decretal dues. The mortgage property
consists of a flat, namely, Flat No. 15 in the building known as 'Sun
Flower', Cuffe Parade, Mumbai together with the shares relating to
the said flat in Cuffe Parade Ravi Kiran Co-operative Housing Society.
The Plaintiff was put in possession and occupation of the suit flat by
Defendants No. 2 and 3 under a leave and licence agreement for 36
months on payment of licence fees. (Defendants No. 2 and 3 are
coparceners in Defendant No. 1 HUF, who owned the suit flat.)
Towards this leave and license agreement, the Plaintiff was required
to deposit a total sum of Rs. 1,00,00,000/- with the Defendants, i.e.,
68,50,000/- bearing interest at the rate of 16 per cent per annum and
another deposit of Rs. 31,50,000/- with no interest. Subsequent to
this leave and licence agreement, on 14th July 1994, Defendants No.
1 to 4 created an equitable mortgage in respect of the suit flat in
Sharayu. 2/11
906-NMS-45-15&641-14-S-3526-99.doc
favour of the Plaintiff by depositing the title deeds by way of security.
The Defendants also executed general Power of Attorney in respect of
the flat in favour of the Plaintiff. By its letter dated 25th April 1997,
the Plaintiff expressed its intention to vacate the suit flat on expiry of
the licence period. The Plaintiff also requested Defendants No. 1 to 4
to refund the amount of deposit and offered to surrender the
possession of the flat. Despite this request and several reminders,
which followed it, Defendants No. 1 to 4 did not refund the amount
of deposit. They instead informed the Plaintiff that they were unable
to return the deposit, and suggested that the Plaintiff might continue
to occupy the suit flat as a licensee. The Plaintiff, however, insisted
on refund of the deposit. The Defendant, however, failed to refund
the deposit. The Plaintiff, in the premises, filed the present Suit for
enforcement of the mortgage by an order of sale of the mortgaged
property.
3. In a Notice of Motion taken out by the Plaintiff in the
present Suit, namely, Notice of Motion No. 2040 of 1999, consent
terms were arrived at between the parties. Under these consent
terms, the Defendant agreed to sell, transfer and assign the suit flat
to the Plaintiff or its nominees in accordance with the Memorandum
Sharayu. 3/11
906-NMS-45-15&641-14-S-3526-99.doc
of Compromise dated 20th March 2003. The Memorandum of
Compromise was placed on record along with consent terms by this
Court and the Motion was disposed of in terms of consent terms.
After dismissal of the Motion, and despite passage of about 10 years
after filing of the consent terms, parties have not taken any steps for
sale of the flat. When the Suit came up for final hearing before this
Court, none of the Defendants appeared in the Suit. No Written
Statement was filed and in the premises, the Suit was transferred to
the category of undefended Suits. A learned Single Judge of this
Court by an order and decree dated 9th December 2013 accepted the
Plaintiff's Affidavit in lieu of examination-in-chief and admitted the
documents placed by the Plaintiff in evidence and decreed the Suit in
terms of prayer clauses (a), (b) and (c). Prayer clause (a) related to
the money decree, as noted above, whereas prayer clauses (b) and
(c), respectively, referred to the order of sale and declaration in
connection with the mortgage.
4. The Applicants in the present Notices of Motion claim to
be coparceners of Defendants No. 2 to 4 in Defendant No. 1 HUF. It
is the case of the Applicants that the Applicants were not aware of
the transaction between the Plaintiff and Defendants No. 1 to 4. It is
Sharayu. 4/11
906-NMS-45-15&641-14-S-3526-99.doc
submitted that Defendant No. 2, who was a Karta of Defendant No. 1
HUF, along with Defendants No. 3 and 4 was managing the affairs of
the HUF and particularly, the business transactions between the
Plaintiff and the Defendants. It is submitted that originally the father
of the parties was a Karta, but after his death, disputes arose between
coparceners, as a result of which a partition Suit came to be filed
between the coparceners Defendants No. 2 to 4 and the Applicants
wherein are parties to the Suit. That Suit was filed in Madras High
Court and claimed partition of the family business and assets. It is
submitted that the suit flat is shown as one of the properties in the
schedule of joint family properties produced in this Suit. It is
submitted that Defendants No. 2 to 4 chose not to file any Written
Statement on account of a collusion between the Plaintiff and
Defendants No. 2 to 4. It is submitted that the alleged Memorandum
of Understanding or Compromise of 20th March 2003 was not signed
by the Karta of the HUF, but it was signed only by one coparcener,
who had no right to execute, transact or sign on behalf of the HUF.
The Notices of Motion are said to be taken out under the provisions
of Order IX Rule 13 of the Code of Civil Procedure, 1908.
5. At the hearing of the Notices of Motion, Mr. Vashi,
Sharayu. 5/11
906-NMS-45-15&641-14-S-3526-99.doc
learned Counsel appearing for the Applicants submitted that the
Motions may be considered, alternatively, under Order XXIII Rule 3A
or Section 47 of the Code of Civil Procedure, 1908. He submitted that
the Suit was in effect a compromise between the parties by entering
into consent terms and that since his clients, who were also
coparceners along with Defendants No. 2 to 4 in Defendant No. 1
HUF, were not consulted whilst compromising the Suit, the only
remedy they have is to move this Court a Notice of Motion by virtue
of Order XXIII Rule 3A of the Code of Civil Procedure, 1908.
Alternatively, he submitted that the Notices of Motion may be treated
as applications for determining questions between parties arising in
connection with the Suit after the decree was passed or their
representatives and which concerned execution, discharge or
satisfaction of the decree, under Section 47 of the Code of Civil
Procedure, 1908. Curiously enough, he did not argue the case of
Order IX Rule 13 of the Code of Civil Procedure, 1908, which
appeared to be the original provision under which the Motions seem
to have been moved.
6. Be that as it may, at the outset, it must be noted that a
Motion, such as the present, does not lie at the instance of a third
Sharayu. 6/11
906-NMS-45-15&641-14-S-3526-99.doc
party for setting aside a decree passed in the Suit, under Order IX
Rule 13 of the Code of Civil Procedure, 1908. As held by the
Supreme Court in Ram Prakash Agarwal & Anr. Vs. Gopi Krishan
(dead through LRs.) & Ors.1, an application for setting aside the
decree does not lie at the instance of a party, who was not a party to
the Suit. Such Application is not even maintainable under Section
151 of the Code of Civil Procedure, 1908. The statutory provision
under Order IX Rule 13 of the Code of Civil Procedure, 1908 refers to
the Defendant in an action, who alone can move an application
under Order IX Rule 13 of the Code of Civil Procedure, 1908. A
person, who was not a party, despite the fact that he may be
interested in the Suit, is not entitled to move an application under
this Rule and such order cannot be passed at his instance even under
Section 151 of the Code of Civil Procedure, 1908.
7. Secondly, it must be noted that the decree is passed not
under Order IX of the Code of Civil Procedure, 1908 in the absence of
the Defendants. The Defendants did not file any Written Statement to
the Suit. Since there was no Written Statement, the Suit was set
down for hearing as an undefended Suit. The Judgment and Decree
pronounced in the Suit is, accordingly, as a decree passed under
1 (2013)11 SCC 296
Sharayu. 7/11
906-NMS-45-15&641-14-S-3526-99.doc
Order VIII Rule 10 of the Code of Civil Procedure, 1908 and not an
exparte decree under Order IX Rule 6 of the Code of Civil Procedure,
1908. As held by the Division Bench of our Court in the case of
Dhanwantrai R. Joshi & Ors. Vs. Satish J. Dave & Ors. 2, the
remedy in such case is not to file an application for setting aside the
decree, but to file an appeal against such decree.
8. The decree passed by this Court on 9th December 2013
cannot be said to be a decree passed on compromise between the
parties. The original compromise was contained in Consent Terms
dated 24th March 2003, which were filed in the Notice of Motion and
which required sale of the suit flat to the Plaintiff. That agreement,
however, appears to have been given a go by, as noted by this Court
in the decree passed on 9th December 2013. This Court passed a
decree in the mortgage Suit under Order VIII Rule 10 of the Code of
Civil Procedure, 1908, as I have noted above. Therefore, there is no
question of setting aside that decree under the provisions of Order
XXIII Rule 3A of the Code of Civil Procedure, 1908.
9. Learned Counsel for the Applicants alternatively
submitted that the present Notice of Motion may be considered as an
application of Section 47 of the Code of Civil Procedure, 1908. He
2 1999(1) Bom.C.R. 97
Sharayu. 8/11
906-NMS-45-15&641-14-S-3526-99.doc
submitted that as held by the Supreme Court in case of Sushila Devi
Vs. Ran Veer Singh & Anr.3, it was not necessary for the Applicants
to wait until the decree in the Suit is, in fact, sought to be put into
execution against them. He submitted that since the application
requires the Court to determine questions as between the parties
arising out of a decree passed by this Court and which would anyway
concern the execution of the decree, the Applicants are within their
rights to make the present application under Section 47 of the Code
of Civil Procedure, 1908. The present Application is to set aside a
decree passed by this Court. Such application could obviously not be
made before the executing Court. The application also could not be
made before a Court exercising co-ordinate jurisdiction by treating
the decree as a nullity or non est. Here is a case where the Applicants
at best could be said to be aggrieved by a decree passed in the Suit.
The decree is obviously passed under Order VIII Rule 10 of the Code
of Civil Procedure, 1908. If it is their case that the HUF was not
properly represented before the Court and as members of the HUF,
they have a grievance against the decree, their only remedy is to go
in appeal challenging the decree. They cannot come before a Court of
co-ordinate jurisdiction or executing Court and seek an order of that
3 (2009)16 SCC 244
Sharayu. 9/11
906-NMS-45-15&641-14-S-3526-99.doc
Court on the basis that the decree is a nullity or non-est.
10. Learned Counsel for the Applicants submitted that
the decree passed in the present Suit in a final decree passed without
a preliminary decree. Again if the Applicants have any grievance on
this score, that is a matter of an appeal. The decree cannot be
described as a nullity or non-est on that ground.
11. Viewed from any point of view, the applications
are clearly not maintainable. Even otherwise, the Applicants' case
lacks any bona fides. The entire case of the Applicants is premised on
averments that they were not aware of the transaction between the
Plaintiff and Defendants No. 1 to 4, based on which the present Suit
was filed. The documents on record clearly indicate that the
Applicant before the Court in Notice of Motion No. 641 of 2014 not
only knew about the transaction, but was himself a signatory as a
witness to the documents drawn between the parties, namely, the
leave and licence agreement, the deposit agreement and the
memorandum of equitable mortgage.
12. It is also pertinent to note that the Applicants have
never raised any dispute in the correspondence or otherwise with
respect to the suit transaction. Even in the partition suit, which is
Sharayu. 10/11
906-NMS-45-15&641-14-S-3526-99.doc
pending before the Madras High Court, there is no pleading on the
part of the Applicants challenging the Suit transaction either on the
ground that the coparceners, who entered into the transaction, did
not have the requisite authority or that the transfer was not for the
benefit of the HUF. In the premises, even on merits, there is hardly
any case for the Applicants.
13. In the premises, there is no merit in the Notices of
Motion. The same are dismissed, with costs.
14. At one stage, during the course of hearing, it was
suggested by learned Counsel for the Applicants that there was a
restraint order passed by the Madras High Court in respect of the suit
property. Perusal of the order of the Madras High Court indicates
that the suit property, which admittedly is a mortgage property, has
been carved out of the injunction order. (In fact, all mortgage
properties belonging to Defendant No. 1 HUF have been carved out
so.) The Plaintiff/decree-holder may, accordingly, deal with the suit
flat in accordance with law.
[S.C. GUPTE, J.]
Sharayu. 11/11
