Bombay High Court
Ajay Kumar M. Singh vs Mr. Basant Bhoruka on 18 July, 2016
Bench: S.J. Kathawalla
KPPNair 1 S-5086/98
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
SUIT NO. 5086 OF 1998
Ajay Kumar M. Singh )
Hindu, Indian Inhabitant, aged about )
adult, R/at: Heritage C.H.S. Lajpatrao Road, Vile Parle (W) )
Mumbai-400 056 )..Plaintiff
vs.
Basant Bhoruka, presently residing at Flat No. 11A & B,Sudhakar )
Building, 11th floor, 16, Narayan Dabholkar Road, Malabar Hill, )
Mumbai-400 006 )..Defendant
Mr. Pratap Patil, instructed by Mr. Amol Wagh, for the Plaintiff.
Mr. Rajneesh Agarwal, along with Ms. Pooja Thorat, instructed by Mr. V.M.
Thorat, for the Defendant.
CORAM: S.J. KATHAWALLA, J.
Judgment reserved on: 4th March, 2016
Judgment pronounced on: 18th July, 2016
JUDGMENT:
1. The above Suit was originally filed by one Mr. J.P. Karwa against the
Defendant -- Basant Bhoruka for the following reliefs:
" (a) That the Defendant be ordered and decreed to pay a
sum of Rs. 1,41,55,000/- (Rupees One Crore Fortyone Lacs
Fifty five Thousand only) as per particulars of claim at
Exhibit Y along with further interest at the rate of 24 per cent
per annum on the principal amount of Rs. 96,00,000/- from
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the date of filing of the suit till realisation in full.
(a1) that it be declared that, payment of the amounts
mentioned in prayer (a) above duly secured by a valid and
subsisting charge of the immovable property described in
Exhibit W1 hereto and the Plaintiff is entitled to enforce the
said security towards the realisation of the said dues."
2. The original Plaintiff -- J.P. Karwa (who later assigned his rights in favour
of the present Plaintiff -- Ajay Kumar M. Singh) has in the Plaint
stated/submitted as follows:
2.1 That the Plaintiff was a freelance liaison consultant with various
Government authorities and body corporates for arranging finance in the form of
lease, hire purchases, bill discounting, bank limits, public issue, bridge loan, etc.
for body corporates and individuals. The Defendant is the Promoter/Managing
Director of M/s. Digital Leasing and Finance Limited ("Digital Leasing"). The
residential address of the Defendant is Flat No. 11A & B, Sudhakar Building,
11th Floor, 16 Narayan Dabholkar Road, Malabar Hill, Mumbai-400 006 ("suit
property").
2.2 In the year 1992, the Plaintiff came to know from the business circle that
M/s. Digital World India Limited ( "Digital World"), a Company incorporated
under the Companies Act, 1956, intended to go for public issue and was looking
for a liaison person like him for getting approvals and sanctions from various
Government authorities, banks and body corporates. The Plaintiff wrote a letter
KPPNair 3 S-5086/98
dated 8th May,1992 to Digital World , and offered his services which were
accepted by Digital World (Exhibit "B" to the Plaint). The Plaintiff sent his
quotation for various professional services vide letter dated 25th May, 1992. A
Service Agreement dated 2nd June,1992 was entered into by the Plaintiff
with Digital World (Exhibit "D" to the Plaint).
2.3 As per the said Agreement, the Plaintiff commenced rendering services to
Digital World and accordingly submitted his debit notes dated (i) 26th
February, 1993 for Rs. 9,32,000/- (Exhibit "E" to the Plaint), (ii) 12th February,
1994 for Rs. 6,00,000/- (Exhibit "F-1" to the Plaint). The Plaintiff continued to
render his services as agreed from time to time to the said Digital World and also
forwarded a statement of accounts as on 31st March, 1994 showing that an
amount of Rs. 28,16,180/- was due and payable by the said Digital World to the
Plaintiff (Exhibits "G" and "G-1" to the Plaint). Since the Plaintiff arranged
further finance for Digital World, he also raised his debit note dated 28th May,
1994 for the sum of Rs. 4,40,000/- and by his covering letter forwarded the
same to Digital World (Exhibits "H" and "H-1" to the Plaint).
2.4 The Plaintiff sent a letter dated 25th June, 1994 requesting Digital World
to clear the debit notes raised till 31st March, 1994 aggregating to Rs.
28,16,180/- + Rs. 4,40,000/- being the amount of the last debit note dated 28th
May,1994 (Exhibit "I" to the Plaint). M/s. Digital World sent its reply dated
29th June,1994 and requested further time for payment as the Company then
was facing some liquidity crunch which was beyond their control (Exhibit "J" to
KPPNair 4 S-5086/98
the Plaint). Since Digital World did not make the payment, the Plaintiff sent a
reminder letter dated 18th November, 1994, reminding the Digital World for
the over due payment along with interest at the rate of 24 per cent as agreed in
the Service Agreement (Exhibit "K" to the Plaint). M/s. Digital World by its
letter dated 24th November, 1994 , inter alia, apologized for not making the
payment in time and requested for further time (Exhibit "L" to the Plaint).
2.5 Thereafter in the last week of December, 1994, Digital World requested
the Plaintiff to arrange for further funds which were arranged for by the Plaintiff,
and the Plaintiff under cover of his letter forwarded a debit note dated 28th
March,1995 for Rs. 11,20,000/- to Digital World (Exhibits "M" and "M-1" to
the Plaint). The Plaintiff under cover of his letter forwarded a statement of
account as on 31st March, 1995 to Digital World requesting Digital World to
confirm the balance shown in the statement, being total outstanding of Rs.
51,35,663/- and further requested to make the payment due in the statement at
the earliest (Exhibits "N" and "N-1" to the Plaint). A reminder letter dated 5th
May, 1995 was also sent to Digital World. Digital World by its letter dated
10th May, 1995 again apologized for its inability to make the payment to the
Plaintiff and stated that Digital World was in the process of availing further
loan facilities from other body corporate which could be utilised to pay off the
debts against the Plaintiff (Exhibit "O" to the Plaint).
2.6 According to the Plaintiff, the Defendant personally contacted the
KPPNair 5 S-5086/98
Plaintiff several times and assured the Plaintiff that all the dues would be cleared
by the Defendant. The Plaintiff also sent his statement of account dated 5th
April, 1996 to Digital World along with a covering letter requesting Digital
World to make the payments which were long overdue (Exhibits "P" and "P-1" to
the Plaint).
2.7 Thereafter the Defendant approached the Plaintiff for availing his services
for one of the Group Companies, M/s. Digital Leasing, and entered into another
Agreement dated 4th March,1994 for availing the services similar to that of
Digital World (Exhibit "Q" to the Plaint). The Plaintiff rendered his services
from time to time and by a letter dated 5th October,1996 forwarded a statement
of account as on 30th September,1996 to Digital Leasing and requested for
payment aggregating to Rs. 28,12,927/- (Exhibits "R" and "R-1" to the plaint).
The Plaintiff sent a reminder letter dated 12th October, 1996 inviting attention of
the Defendant and demanded a sum of Rs. 1,00,64,399/- due and payable by
Digital World and Digital Leasing cumulatively to the Plaintiff. On 16th
October,1996 the Plaintiff again demanded the said amounts and along with the
said letter also enclosed the statement of complete accounts of Digital World
and Digital Leasing as on 30th September, 1996 (Exhibits "S" and "S-1" to the
Plaint), for transactions undertaken on behalf of both Companies. The Defendant
on receipt of the letter called upon the Plaintiff and requested for reduction of
the total outstanding. The Plaintiff considered the same and agreed for a full
and final settlement at Rs. 95,00,000/-. The Defendant agreed to the said
KPPNair 6 S-5086/98
settlement and by a letter dated 22nd October, 1996 signed by him as Managing
Director of Digital World, and promised to make the payment as agreed upon
by the parties and requested for further time of couple of months (Exhibit "T" to
the Plaint). Thereafter the Defendant by a letter dated 24th October, 1996 signed
by him as Director of Digital World after referring to his earlier letter dated
22nd October, 1996 and subsequent personal discussions forwarded 10 post
dated cheques aggregating to Rs. 95,00,000/- , particulars of which are set out in
paragraph 14 (a) of the Plaint (Exhibit "T-1 to the Plaint). However, on or about
28th October,1996, the Defendant telephonically instructed the Plaintiff not to
present the said cheques till he gave further instructions to do the same. The
letter dated 24th October, 1996 and the fact that the cheques were issued to the
Plaintiff, and thereafter the Plaintiff was instructed not to present the same, were
introduced in the Plaint by an amendment dated 25th April, 2005.
2.8 On 29th October, 1996, the Plaintiff expressed his displeasure to the
Defendant with regard to the delay in clearing his dues (Exhibit "U" to the
Plaint). Therefore, by a letter dated 5th November, 1996 the Defendant
expressed his willingness to execute a personal guarantee and to create a charge
over the immovable property, being the suit property, towards security for the
payment of dues of Rs. 95,00,000/- including interest till 30th September, 1996,
and further interest at the rate of 2 per cent per month on the principal amount of
Rs. 95,00,000/- till the payment in full to the Plaintiff (Exhibit "V" to the Plaint).
Accordingly, the Defendant executed an Agreement (Exhibit "W" to the Plaint)
KPPNair 7 S-5086/98
dated 26th November, 1996 (Exhibit "W-1" to the Plaint) and created a charge
over the Flats i.e. A & B Sudhakar Co-operative Housing Society, Narayan
Dabholkar Road, Malabar Hills, Mumbai-400 006 ('the suit flats') for which the
Defendant is holding shares, towards security for the payment of the long over
due service charges to the Plaintiff, with interest at the rate of 24 per cent per
annum from 1st October, 1996 on Rs., 95,00,000/- till realisation in full. Vide
the Agreement dated 26th November, 1996, the Plaintiff also had the option to
stake a claim on the properties (suit flats) in the event the Defendant failed to
make the payment within 31st March, 1998. The Defendant also executed a
Personal Guarantee dated 26th November, 1996 ( Exhibit "X" to the Plaint),
which according to the Plaintiff, is independent of the charge created earlier vide
Agreement dated 26th November, 1996, and independent of any other right
vested with the Plaintiff for claiming the due payment from the Defendant or
from the respective Companies.
2.9 Both the Documents i.e. Exhibits "W" and "X" were forwarded by the
Defendant to the Plaintiff under cover of his letter dated 4th December, 1996
(Exhibit "X-1" to the Plaint).
2.10 Thereafter the Plaintiff filed the above Suit on 30th October,1998, only
for an order and decree against the Defendant to pay a sum of Rs. 1,41,55,000/-
as per the particulars of claim Exhibit-Y, along with further interest at the rate of
24 per cent per annum on the principal amount of Rs. 95,00,000/- from the date
of filing of the Suit till realisation in full.
KPPNair 8 S-5086/98
2.11 On 27th July, 1999, the Plaint was amended and prayer (a1) was
introduced seeking a declaration that the payment of the amounts mentioned in
prayer clause (a) were duly secured by a valid and subsisting charge qua the suit
flats and the Plaintiff was entitled to enforce the said security towards the
realisation of the said dues.
2.12 That vide Deed of Assignment dated 15th September, 2012 executed
between the original Plaintiff J.P. Karwa and Assignee Ajay Kumar M. Singh
and Supplementary Deed of Assignment dated 15th March, 2014, the original
Plaintiff transferred and assigned his entire claim and receivables in Suit No.
5086 of 1998 to the Assignee (present Plaintiff -- Ajay Kumar M. Singh). The
Plaint was therefore amended on 25th February, 2015, and the name of the
original Plaintiff -- J.P. Karwa was deleted and substituted by Shri Ajay Kumar
M. Singh.
3. On 16th March, 2006, the Defendant filed his Written Statement and, inter
alia, submitted as under:
3.1 That the entire plaint is patently false, bogus and fabricated, that the
events and transactions alleged in the plaint never took place and that the
entire plaint is a result of the Plaintiff's forgery, fabrication, manipulation, mala
fide intentions and illegality. Never were the alleged services, as stated on record
of the case, provided to the two Public Limited Companies, nor were the alleged
debit notes raised or sent, nor did any of the alleged correspondence ever take
KPPNair 9 S-5086/98
place, nor did the Defendant ever give any alleged personal guarantee for such
non-existent services and nor did Defendant create a charge on the said flats.
3.2 That it is well within the Plaintiff's knowledge that in the records of
Sudhakar Co-operative Housing Society Ltd., the said flats belonged to M/s.
Transport Corporation of India Ltd., as is stated in the said Society's letter to the
Plaintiff's Advocates dated 28th April, 1999, and exhibited by the Plaintiff
himself as Exhibit-C to his Affidavit in Support of the Notice of Motion No. 180
of 1999. Again, it is apparent that the Plaintiff was fully aware of the transfer of
the said flats by registered conveyance by M/s. TCI to Badriprasad Bhoruka
Family Trust in December, 1999, since the Plaintiff's prayer to appoint Receiver
was made on that very foundation. However, the Plaintiff never thought it
necessary to join either the past owner or the present owner of the said flats as
necessary parties to the Suit even though the Plaintiff's Suit is based upon an
alleged charge over the said flats in favour of the Plaintiff.
3.3 That the alleged charge is an unregistered charge and cannot be looked
into by this Court, even if it is presumed, though not admitted, and in fact
vehemently denied that such a document was created;
3.4 That the Document dated 29th May, 1992 being the alleged Service
Contract between the Plaintiff and the Defendant is a false and fabricated
document. In fact, on the date of the alleged personal meeting and execution of
the alleged Document, the Defendant was not even in India but was in Singapore
from 21st May, 1992 upto 10th June, 1992.
KPPNair 10 S-5086/98
3.5 That the execution of the Deed of Guarantee is denied, and in any event
the alleged Personal Guarantee dated 26th November, 1996 is void as the same
is without any consideration.
3.6 That even if the case of the Plaintiff is taken at face value, and for the
sake of argument it is considered that what the Plaintiff has stated is proved, even
then no decree can be passed against the Defendant as prayed for by the Plaintiff
since the Plaintiff has lost securities in the form of Negotiable Instruments and
the right to recover the monies from the two principal borrower Companies, to
which the Defendant certainly would have been entitled.
3.7 It is now apparent that the Defendant will not be in a position to recover
monies from the securities of the principal borrower companies, and as such the
Plaintiff has no right to recover money from the Defendant because Plaintiff is
bound to suffer for its own lapses.
3.8 That the Plaintiff has neither sued those companies nor joined them as
necessary parties in the present Suit, and as such has deliberately not availed of
any opportunity to establish liability against those two Companies which are in
fact principally liable. It is only after the liability of the two companies is
established that it can be ascertained as to whether any sum is due to the Plaintiff
from those two Companies, for which the Defendant is liable.
3.9 That even otherwise the Deed of Guarantee is inadmissible in evidence as
signatures/initials of either party are not affixed on all the pages of the
documents, including on the sheets of stamp paper, and as such the entire
KPPNair 11 S-5086/98
document is inadmissible in evidence.
3.10 That the present proceeding is liable to be dismissed as the same is barred
by limitation.
3.11 That the Plaintiff has not provided any proof of service as alleged to
Digital World, and the Defendant has not received any statement of account or
debit notes issued by the Plaintiff.
3.12 The Defendant has not received the letter dated 25th June,1994 and has
not sent any response dated 29th June, 1994. The Company has also not
received any letter dated 18th November, 1994 nor sent its response dated 24th
November, 1994 to the Plaintiff.
3.13 That the Defendant was not in India from 20th June,1994 to 13th July,
1994, as is borne out from the Defendant's Passport. The question therefore of
him receiving the Plaintiff's alleged letter dated 25th June, 1994 never arose.
3.14 That since the Defendant was often required to visit foreign countries for
its business of import, the Defendant used to keep certain signed blank sheets
and cheques to enable his senior executives, management and staff to complete
documentation and transactions etc. which should not be hampered in his
absence. It is apparent that the Plaintiff made friends in the Office of the
Defendant and got access to such blank signed papers and cheques and mis-
utilised the information and the documents, to fabricate this false Suit.
3.15 That the Defendant never availed of the Plaintiff's services for Digital
Leasing nor Digital World and never entered into any alleged Agreement dated
KPPNair 12 S-5086/98
4th March, 1994, the signature on the said document is forged and/or lifted by
the Plaintiff.
3.16 That the debit notes and statements referred to by the Plaintiff in respect
of both the Companies, Digital World and Digital Leasing are denied. Not a
single debit note in respect of Digital Leasing has been exhibited in the plaint.
3.17 That the alleged reminder letter dated 12th October, 1996 and alleged
letter dated 16th October,1996 are denied vehemently and the Plaintiff is put to
strict proof thereof. The Defendant had never requested the Plaintiff to reduce
the total outstanding which is in itself non-existent. The Defendant never sent
any letter dated 22nd October, 1996.
3.18 That the Defendant had not sent the letter dated 24th October,1996 and
had also not forwarded any post-dated cheques in favour of the Plaintiff
amounting to Rs. 95 lakhs.
3.19 That inspection of the said cheques in their covering letter was never
provided to the Defendant.
3.20 That the Defendant has not offered to personally guarantee the alleged
payment nor to create charge of personal property as alleged.
3.21 That the alleged letter dated 5th November, 1996 is fabricated and the
signature is lifted or forged. The letter is one more example of misuse by the
Plaintiff of stolen stationery.
3.22 That the alleged Agreement of Guarantee and the Agreement for
Creation of Charge were got up and fabricated documents. Stolen sheets with
KPPNair 13 S-5086/98
the signatures of the Defendant have been manipulated and used as page 2 of
both the Documents, which are not genuine and which were created by the
Plaintiff to support his illegal claim.
3.23 That inspection of the original Documents was given to the Defendant
and his Advocate on 25th November, 1998, and during the inspection, certain
detailed handwritten notes were prepared by the Advocate while comparing the
originals given during inspection with the true copies typed and exhibited in the
plaint. The said hand written notes were in the nature of description of specific
physical characteristics of the original documents given for inspection such as
colour of ink used, number of pages, etc. and other such characteristics which
could be referred to in future for identification of the said documents. The
Advocate for the Plaintiff initialled each page of the said notes and signed upon
the last page of the notes thereby verifying the description of the physical
documents as noted by the Advocate for the Defendant. Despite specific request
made by the Defendant's Advocate on 25th November, 1998 that the Plaintiff
should make available photo copies of the original documents, the same were
not given to the Defendant or his Advocate on 25th November,1998, but was
given 19 days later i.e. on 15th December,1998 at about 4.20 p.m. with no
explanation for the delay. There were material variances between the photo
copies as furnished by the Plaintiff's Advocate and the original documents
produced during the inspection, as set out in clauses (a)to (d) of paragraph 14 of
the Written Statement.
KPPNair 14 S-5086/98
3.24 That the Defendant was never at any point of time the owner of the said
flats and never created any mortgage, charge or third party interest in the suit
flats.
3.25 That the Defendant has placed all the relevant facts of the ownership of
the said flats before the Court in the Review Petition filed against the ex-parte
order of the Receiver passed by the Learned Single Judge and also in the
Appeal against the order appointing Receiver filed before the Hon'ble Division
Bench, which are both on the record of the case.
3.26 That in the above circumstances no amount is due and payable by the
Defendant to the Plaintiff.
4. On the basis of the Written Statement filed by the Defendant, this Court
(Coram: Mrs. Roshan S. Dalvi, J.) by her Order dated 3rd November, 2014,
framed the following issues:
"1. Whether the parties entered into service agreement dated 2nd
June, 1992 and 4th March, 1994?
2. Whether the Plaintiff performed his obligation under the
agreement?
3. Whether the Defendant guaranteed the repayment of the dues
of the Plaintiff?
4. What is the amount that the Plaintiff is entitled to be paid?"
Thereafter on 28th October, 2015, by consent of the parties, the following three
KPPNair 15 S-5086/98
additional issues (Nos. 5 to 7) were framed.
"5. Whether the Plaintiff proves that Defendant created charge on
the suit property i.e. flat Nos. 11 A and B, Sudhakar Building,
Narayan Dabholkar Road, Malabar Hill, Mumbai-400 006 in its
favour?
6. Whether the Defendant proves that he is not the owner of the
suit property?
7.
Whether the suit property is liable for the recovery of dues
owed by the Defendant to the Plaintiff? "
5. The Plaintiff examined himself being PW 1 and filed his Affidavit in Lieu
of Evidence dated 28th March, 2015. The Plaintiff also filed additional
Affidavits f Examination-in-Chief dated 24th April, 2015 and 18th June, 2015.
The Plaintiff also led the evidence of Ms. Jyoti Cheulkar (PW 2) who was
working with Digital World from April, 1994 till May, 2001 in the Accounts
Department. Her Affidavit in Lieu of Evidence is dated 7th July, 2015.
6. The Plaintiff has relied on 23 documents. On 24th April, 2015, the
Advocate for the Defendant submitted in writing the admission and denial qua
the said 23 documents as under:
"(a) Document at Sr. Nos.1, 14 to 19 and Sr. No. 22 are denied.
KPPNair 16 S-5086/98
(b) Signatures at Document at Sr. Nos. 2 to 10 and Sr. No. 12 are admitted, however
the contents of the same are disputed.
(c) Statement of account at Sr. No. 13 is denied except the amount of Rs. 3,66,200/-
mentioned in debit note dated 15/07/1995 in clause "B" therein.
(d) Document at Sr. Nos.11, 20 and Sr. No. 21 are admitted.
(e) Document at Sr. No. 23 of Additional Affidavit in lieu of examination in
chief is admitted".
7. By an Order dated 24th June, 2015 the documents relied upon by the
Plaintiff were marked as under:
Sr.No Particulars Exh. No.
1 Agreement of Service dated 02.06.1992 purportedly signed by X for
Defendant and J.P. Karwa identification.
2 Debit note and covering letter dated 26.02.1993 signed by J.P. P-1
Karwa for Rs. 9,32,000/-
3 Debit note dated 12.02.1994 signed by J.P. Karwa for Rs. P-2
6,00,000/-
4 Covering letter dated 12.02.1994 signed by J.P. Karwa P-3
5 Statement of account as on 31.03.1994 signed by J.P. Karwa P-4
6 Debit note dated 28.05.1994 signed by J.P. Karwa for Rs. P-5
4,40,000/-
7 Debit note dated 28.03.1995 signed by J.P. Karwa for Rs. P-6
11,20,000/-
8 Statement of account as on 31.03.1995 signed by J.P. Karwa P-7
9 Statement of account as on 31.03.1996 signed by J.P. Karwa P-8
10 Agreement dated 04.03.1994 between Second Company P-9
Digital Leasing & Finance Ltd. and J.P. Karwa signed by J.P.
Karwa and Defendant.
11 Debit note dated 15.07.1995 signed by J.P. Karwa and P-10
Journal vouchers passed by Company M/s. Digital Leasing
and Finance Ltd. in original.
KPPNair 17 S-5086/98
12 Statement of account as on 30.09.1996 signed by J.P. Karwa P-11.
13 Statement of account of both companies as on 30.09.1996 X-1 for
signed by J.P. Karwa identification.
14 Letter dated 22.10.1996 signed by Defendant agreeing to X-2
statement and promising to make payment.
15 Confirmation letter from Executive of Digital World India Ltd. P-12
dated 22.10.1996 in original
16 Affidavit of Ms. Jyoti Cheulkar, Accounts Executives, Digital P-13.
World India Ltd.
17 Letter dated 05.11.1996 signed by Defendant offering X-3 for
mortgage of flat at 11A and B, Sudhakar , Narayan Dabholkar identification.
Road, Bombay-400 006.
18 Registered Deed of Confirmation dated 19.05.1999 enclosing P-14
deed of guarantee dated 26.11.1996 signed by Defendant and
Agreement to create charge dated 26.11.1996 signed by
defendant and J.P. Karwa . Certified copy issued by Sub-
Registrar of Assurances, Mumbai.
19 Letter dated 04.12.1996 signed by Defendant enclosing X-3A for
personal guarantee and agreement to create charge on flats at identification.
11A and B, Sudhakar, Narayan Dabholkar Road, Bombay-400
20 Arbitration Award dated 29.04.1994 P-15
21 Calcutta High Court decree dated 05.02.1997 P-16
22 Scheme of Arrangement filed at Hon'ble Andhra Pradesh High X-4 for
Court between TCI Ltd. and TCI Industries Limited and Gati identification.
Corporation Ltd. and Transcorp International Ltd. and the
respective shareholders
23 Copy of Agreement of sale dated 29.05.1985 signed by P-18
Defendant and erstwhile owner M/s.TCI
8. The Defendant has only examined himself being DW 1. He has filed his
Affidavit in Lieu of Evidence dated 17th August, 2015 and the additional
Affidavit of Evidence dated 9th September, 2015. The Defendant has relied on
the following 10 documents, which were marked by an Order dated 9th
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September, 2015:
Sr.No Particulars Exh. No.
1 Notarised copy of registered Indenture of Transfer dated D-1
31.12.1999
2 Original Electricity Bills of BEST Undertaking of period D-2
October to December, 1996
3 Original Resolution of Sudhakar Cooperative Housing Soc. D-3
Ltd. dated 27.09.1970
4 Original order u/s 101 of the M.C.S.Act, 1960 dated D-4
30.12.2002 passed by Learned Deputy Registrar, Cooperative
Societies.
Certified copy of order in Revision Application No. 413 of D-5
2005 dated 22.10.2012 passed by Learned District Deputy
Registrar along with official translation into English by the
Chief Translator's office of High Court dated 07.12.2012
6 Copy of Suit No. 1554 of 1992 filed at Hon'ble Bombay D-6
High Court
7 Copy of passport of Defendant -- relevant pages from 21st Y-1 for
May 1992 to 10th June, 1992 identificatio
n.
8 Original and copy of passport of Defendant -- relevant pages D-7
from 20th June,1994 to 13th July, 1994
9 Hand written notes of Adv. Shri Vaibhav Krishna signed by D-8
Advocate Shri Vaibhav Krishna and Advocate Shri Premlal.
9. PW 1 and PW 2 have been extensively cross-examined by the learned
Advocate appearing for the Defendant. The Defendant (DW 1) was also cross-
examined at length by the learned Advocate appearing for the Plaintiff.
10. Issue Nos. 1 and 2.
KPPNair 19 S-5086/98
"1. Whether the parties entered into service agreement dated 2nd
June, 1992 and 4th March, 1994?
2. Whether the Plaintiff performed his obligation under the
agreement?"
10.1 The parties to the Suit are Ajay Kumar M. Singh (Plaintiff) and Basant
Bhoruka (Defendant). It is the Plaintiff's own case that the Defendant -- Shri
Basant Bhoruka has signed the Agreements dated 2nd June, 1992 and 4th
March, 1994 on behalf of Digital World and Digital Leasing respectively (who
are not parties to the Suit), and the same are not signed by the Defendant in his
personal capacity. The Defendant has initially i.e. in his Written Statement
denied and disputed each and every document relied upon by the Plaintiff in the
Plaint by alleging that the same are forged and fabricated. The Defendant also
denied that the Defendant had agreed to pay an aggregate amount of Rs. 95 lacs
to the Plaintiff. Thereafter the Defendant at the stage of admission and denial of
documents admitted the signatures on the debit notes and statement of accounts
forwarded by the Plaintiff to Digital World /Digital Leasing (Exhibits P-1 to P-
11), but denied its contents. The Plaintiff has, in his Affidavit of Evidence not
identified the signature of the Defendant on the Agreement dated 2 nd June, 1992
and has also not led the evidence of the original Plaintiff to establish that the
Defendant had inter alia signed the said Agreement, or that the denials made by
the Defendant qua execution of documents and his signatures being fabricated,
are false. However the Plaintiff led the evidence of Ms. Jyoti Cheulkar (PW -2)
KPPNair 20 S-5086/98
who was admittedly working in the Accounts Department and was inter alia
responsible for accounts data entry and accounts reconciliation for both Digital
World and Digital Leasing. Ms. Cheulkar in her Examination-in-Chief deposed
that at the instance of the Directors she had written a letter dated 22nd October,
1996 (Exhibit P-12) to the Plaintiff recording the meeting held between the
Plaintiff and the Directors of Digital World, wherein the Plaintiff "accepted
settlement of outstanding of both companies M/s. Digital World India Ltd. and
Digital Leasing Finance Ltd. in the amount of Rs. 95 lacs". In her Cross-
Examination on behalf of the Defendant, she further added that she was
instructed by Mr. Rathi, the Finance Director of Digital World to address the
said letter dated 22nd October,1996 (Exhibit P-12) to the Plaintiff; the entire
transaction between the Plaintiff and the two Companies was done under the
supervision of Mr. K.B. Rathi, the amount payable to the Plaintiff was above
Rs. One crore, but the parties had agreed to pay and accept an amount of Rs. 95
lacs in full and final settlement towards the actual amount payable.
10.2 The Defendant who had initially contended that the Plaintiff had not
given any service either to Digital World or Digital Leasing now in his Cross-
Examination inter alia admitted having approved a voucher for payment to the
Plaintiff, and that the Journal Vouchers at pages 13, 14 and 15 were signed by
Mr. K.A. Raveendran and Ms. Kalpana Mayekar who were working for both the
Companies i.e. Digital World and Digital Leasing, and were reporting to the
Finance Director Mr. Rathi. The Defendant in his Cross-Examination also
KPPNair 21 S-5086/98
admitted that though he was one of the Directors of the Company, he was not
directly involved in the accounts, finance and administration of the Company,
and it was Mr. Rathi who used to directly handle all these aspects and therefore
he (the Defendant) would not know the transactions in detail. The Defendant
also admitted that it is possible that letters/reminders may have been sent by the
original Plaintiff to Digital World/Digital Leasing and he is not aware of the
same. He admitted that Ms. Jyoti Cheulkar (PW -2) was working in the
Accounts Department and that the communication dated 22nd October, 1996
(Exhibit P- 10) is signed by her. The Defendant also stated that if the contents of
the letter dated 22nd October, 1996 are correct, the original Plaintiff ought to
have claimed the amount of Rs. 95 lakhs from the Company and should have
sued the Company.
10.3 The evidence of Jyoti Cheulkar (PW -2) and the Defendant which is
relevant for the purpose of answering Issue Nos. 1 and 2 and which is referred
to above, is reproduced hereunder:
10.4 Affidavit in lieu of evidence of Ms. Jyoti Cheulkar (PW 2):
3. I say that the Company was mainly looked after by its
Directors viz. Shri Basant Bhoruka and Shri K.B. Rathi.
4. I say that I was appointed to work in the Accounts
Department. I say that amongst others my duties and
responsibilities included:
(a) Accounts data entry and accounts reconciliation for both
Digital World India Ltd. and Digital Leasing & Finance Ltd.;
KPPNair 22 S-5086/98
(b) Keeping accounts and preparing confirmations of accounts.
I say that I was reporting to Shri K.B. Rathi, the Finance
Director of the Company, and after Shri K.B. Rathi resigned in
November 1996 I was reporting to other Directors until my
resignation.
6. I say that I was instructed by the Directors of the Company
to prepare the letter signed by me dated 22.10.1996 calling for
revised debit and credit notes from Mr. J.P. Karwa.
7. I confirm that the letter dated 22.10.1996 bears my
signature."
10.5 Cross-examination of Ms. Jyoti Cheulkar (PW 2):
"Q.5 Do you recall which Director instructed you to write
letter dated 22nd October 1996?
A. I was instructed by Mr. K.B. Rathi.
Q.6 Can you say for sure that K.B.Rathi was fully aware of
the transaction between J.P. Karwa and the two
companies?
A. Yes, the entire transaction between Mr. J.P. Karwa and
the two companies was done under the supervision of Mr.
K.B. Rathi.
Q.10 I suggest that as on date 22nd October 1996 this amount
of Rs. 95,00,000/- was not payable. What do you have to
say?
A. It is not correct. The amount was payable and in fact it
was more than Rs. 1 crore.
Q.11 If you are saying that the amount payable was more than
Rs. 1 crore then why did letter dated 22nd October, 1996
KPPNair 23 S-5086/98
mentioned the amount payable as Rs. 95,00,000/-
(Rupees Ninety Five Lakhs)?
A. The said figure of Rs. 95 lakhs was arrived at after
settlement between J.P. Karwa and the Defendant's
companies.
Q.13 I suggest that you know Ajay Kumar Singh since long
time and you have only filed this Affidavit to help him?
A. I do not agree. I know him since last 6 months only.
10.6 Cross-examination of D.W.1
"Q. 35
Whether Mr. J.P. Karwa submitted debit notes for
the services provided which are mentioned in the suit?
A. Not to my knowledge.
(Witness is shown to Exh. P-10 i.e. Debit Note dated 15.7.1995
at page 16, particularly the initial and the handwritten note
written on it, of the Plaintiff's list of documents dated
28.3.2015).
Q.42 Is this your initial on the voucher?
A Yes. (Witness Volunteers): Though it is my initial, the
handwritten note is not written by me.
Q.43 What does that initial denote?
A. It denotes that I have seen and approved the voucher for
payment.
Q.44 Who has signed these Journal Vouchers at page 13, 14
and 15?
A. These vouchers are signed by Ms. Kalpana Mayekar and
Mr. K. Raveendran.
Q.45 Who are Mr. K. Raveendran and Ms. Kalpana Mayekar?
KPPNair 24 S-5086/98
A. Mr. K.Raveendran was employed in the Administration
Department of Digital World India Ltd. and Ms. Kalpana
Mayekar was in the Accounts Department of Digital
World India Ltd.
Q.46 Were these two persons also working for Digital Leasing
& Finance Ltd.?
A. Yes.
Q.47 Were these two people reporting to you?
A. No. They were reporting to Mr. K.B. Rathi.
Q.48 Was this payment of Rs. 3,66,200/- referred in Journal
Voucher at page 13 of the Plaintiff's compilation of
documents, being Exhibit P-10, ever made to Mr. J.P.
Karwa?
A. I am not aware of it.
Q.49 In your Written Statement you have denied that any
services were rendered by Mr. J.P. Karwa to the two
companies i.e. Digital Leasing & Finance Ltd. and
Digital World India Ltd., but I just now showed you the
original voucher, initialled by yourself and by employees
of your company. What do you have to say about that?
A. I am one of the Director of the Company, but not directly
involved in the accounts, finance and administration of
the Company. Mr. Rathi used to directly handle all these
aspects. I would not know the transactions in detail.
Q.51 Is it possible that any communication would come in the
office and you would not know about the same?
A. Yes, it is possible.
Q.52 Did the original Plaintiff Mr. J.P. Karwa issued several
letters and reminders to your company demanding
KPPNair 25 S-5086/98
payments marked as Exhibits P-1 to P-3 and P-5 to P-11
in Plaintiff's compilation of documents dated 28.03.2015?
A. I am not aware of any of these letters.
Q.53 Are you aware of the debit note at page 19?
A. Now I am aware of it.
Q.54 Is it true that in your office there was lady named Ms.
Jyoti Cheulkar?
A. Yes, she was in Accounts Department.
Q.55 Will you be able to recognise her signature?
A. Yes.
A. Yes.
Q.56 Is this signature of Ms. Jyoti Cheulkar?
Q.57 Is it true that as per this letter, your company owed a sum
of Rs. 95 lakhs to Mr. J.P. Karwa?
A. I do not know the correctness of this letter and of the
amount mentioned in this letter. And if it is so then Mr.
J.P. Karwa should have claimed that amount from the
company and he should have sued the company."
10.7 The Defendant in his Written Submissions too, changed his earlier stand
taken in his Written Statement and inter alia submitted as under:
"The Plaintiff may be entitled to the amount of Rs. 95 lakhs
having entered into the service agreements dated 02.06.1992 and
04.03.1994 with the two companies for which he may have
performed his obligations towards the two principal borrower
Companies. However, this Defendant is not a party to the service
KPPNair 26 S-5086/98
agreements dated 02.06.1992 and 04.03.1994 and is therefore not
liable under the same.
10.8 It is therefore clear that it is the Plaintiff's own case that the said
Agreements are between the original Plaintiff and the two Companies i.e. Digital
World and Digital Leasing, who are admittedly not joined as party Defendants to
the Suit. Further, admittedly the Service Agreements dated 2nd June, 1992 and
4th March, 1994 have not been executed by the Defendant in his personal
capacity. Again, despite the original Plaintiff being available he has not come
forward to depose that the Agreements were executed by the Defendant on behalf
of the two Companies which are not joined as party Defendants to the Suit and
its contents are as agreed between the parties thereto. However, from the
debit notes and the bank statements it is established that the Plaintiff has given
certain services to the two Companies and the Companies have agreed to pay an
amount of Rs. 95 lakhs to the Plaintiff in full and final settlement of the
Plaintiff's claim as agreed in the letter dated 22nd October, 1996 ( Exhibits- P-10)
issued by Ms. Jyoti Cheulkar on behalf of the Companies. Issue Nos. 1 and 2
are answered accordingly.
11. Issue No.3
3. Whether the Defendant guaranteed the repayment of the
dues of the Plaintiff?
11.1 The Plaintiff has, in the plaint, relied on a Deed of Personal Guarantee
KPPNair 27 S-5086/98
dated 26th November, 1996 (Exhibit-X to the Plaint) bearing the signature of the
Defendant and witnessed by one S.L. Chandak. Under the purported Deed of
Personal Guarantee, the Defendant has promised /guaranteed to pay the entire
sum of Rs. 95,00,000/- with interest thereon at the rate of 24 per cent per annum
to the Plaintiff on or before 31st March, 1998. Though in Clause 6 of the said
Deed of Personal Guarantee it is provided that the Guarantee is an independent
guarantee for the due payment of the said amount and can be enforced against the
Defendant alone at the option of the Plaintiff for the realisation of the said
amount owed by the Companies without exercising his right to enforce his
claim against the Companies, it is also mentioned in Clauses, 2 3 and 4 of the
said purported Deed of Personal Guarantee as follows.
"2. I hereby agree and undertake to create a charge in respect
of Flat Nos. 11A & B situated at Sudhakar, Narayan Dabholkar
Road, Bombay-400 006, as security for the due payment of the
said sum of Rs. 95,00,000/- (Rupees Ninety Five lacs only)
together with accrued interest thereon as aforesaid.
2. The said flat is hereby charged by me for the payment of
the said sum of Rs. 95,00,000/- along with accrued interest
thereon and shall not be encumbered by me in any way without
the consent of the said Mr. Karwa in writing, so long as the
said amount or any part thereof remain unpaid by me.
4. I will whenever required by the said Mr. Karwa so to do,
execute at my own expense a proper transfer deed and transfer
the said property to the said Mr. Karwa in lieu of the said
payment above mentioned, on default from my side to comply
KPPNair 28 S-5086/98
with the promise given by these presents. The said securities
are capable of being transferred together with power of sale
and all other necessary power for sales and all other necessary
powers for securing and enforcing the payment of the said
amount and interest thereon."
11.2 The Defendant has in paragraph 11.16 of his Written Statement denied the
genuineness of the document, namely, the Deed of Personal Guarantee dated
26th November, 1996 (Exhibit-X to the Plaint). It is submitted that the said
Document is got up and fabricated and cannot be relied upon. It is submitted that
the stolen sheets with the signature of the Defendant have been manipulated and
used as page 2 of the said Document which are not genuine and are created by
the Plaintiff to support his illegal claim. It is submitted that the fact that the said
Document is fabricated is apparent from the facts that: (i) the stamp paper is not
in the name of either of the persons who have stated to have executed the
Document, but is in the name of an Advocate Shri R.K. Kulkarni, who is
nowhere involved in the alleged transaction; (ii) the typing of the Document at
page 2, especially the part of the signatures is contrived, indicating that the
alleged Document was created and printed around the pre-existing signature;
(iii) no details of the addresses or contact details or designation or description of
the witnesses are stated on the Document or elsewhere. The Defendant has no
knowledge of the alleged witness and was never introduced to him. The said
single witness is common to both the parties to the alleged Document; and (iv)
KPPNair 29 S-5086/98
the stamp paper i.e. page 1 of each of the two Documents are neither signed nor
initialled at the bottom.
11.3 The Defendant has in his Examination-in-Chief repeated and reiterated all
that is stated by him in his Written Statement. He has deposed that the Deed of
Guarantee is fabricated, manipulated and a got up Document and he has not
signed the same. He has further deposed that the Plaintiff has not produced any
witness to prove the said Deed Of Guarantee, nor has the original Plaintiff
himself entered the witness box to prove the said Document. He has deposed that
the alleged Deed of Guarantee is not registered and also suffers from want of
consideration. The same is an unstamped document and therefore is in
contravention of the mandatory provisions of the Stamp Act.
11.4 The Plaintiff has in his Affidavit of Documents/Compilation of
Documents relied upon the Personal Guarantee only as an enclosure to the
registered Deed of Confirmation dated 19 th May, 1999, executed only by the
Plaintiff (Exhibit P-14). In the recital of the Deed of Confirmation, he has stated
that the Defendant has executed in his favour an Agreement dated 26th
November, 1996 and a Deed of Guarantee also on 26th November, 1996, and the
Deed of Guarantee read along with the said Agreement amounts to an
Agreement of Conditional Sale of the property (suit flats). In his evidence the
Plaintiff has not mentioned anything about the person who has witnessed the
purported Deed of Guarantee. He has not explained as to why the stamp paper
was not used in the name of either the original Plaintiff or the Defendant and
KPPNair 30 S-5086/98
why the same was purchased in the name of Advocate Kulkarni, and how the said
Advocate was concerned with the transaction. He has also not explained as to
why the first page of the stamp paper on which the purported Guarantee is typed
is not initialled by the parties. In his Cross-Examination, a specific question (Q.
No.5 ) is put to him as to on what basis does he say that the Deed of Personal
Guarantee (Exhibit-X to the Plaint) bears the signature of the Defendant to which
he first answers that, " I have seen the signature of the Defendant Mr. Basant
Bhoruka appearing on papers of the two Companies i.e. M/s. Digital World India
Ltd. and M/s. Digital Leasing & Finance Ltd. and accordingly I have confirmed
the signatures of Defendant". However, when the next question is put to him i.e.
Question No. 6, whether he means to say that the signature of the Defendant on
the Deed of Guarantee and on the papers of the two Companies are similar, he
has not answered the same in the affirmative but has stated that the original
Plaintiff has informed him that these documents were signed by the Defendant in
his presence and thus the signatures on the Deed of Personal Guarantee is of the
Defendant only. The next question therefore which was put to him in his Cross-
Examination (Q. No. 7) viz. whether the original Plaintiff Mr. J.P. Karwa can
depose to this fact in the present proceedings, the Plaintiff answered that "I had
requested him but till date he has not agreed". In a specific question (Question
No.8) whether the original Plaintiff Mr. J.P. Karwa assigned any reason for such
dis-agreement, the Plaintiff answered the same in the negative. Therefore the
original Plaintiff, though available has chosen not to enter the witness box to
KPPNair 31 S-5086/98
depose that the Defendant had put his signature on the purported Deed of
Guarantee in his presence, and the contents of the Deed of Personal Guarantee
are true and correct. The present Plaintiff who is only an Assignee of the original
Plaintiff is personally unable to identify the signature of the Defendant and has
therefore deposed that the document bears the signature of Defendant only on
hearsay i.e. on the basis of him being purportedly informed by the original
Plaintiff that the Defendant has signed the said Deed of Guarantee in his
presence, which the Defendant has denied and has insisted that his signature is
fabricated. The present Plaintiff (Assignee) could have very well summoned
the original Plaintiff to inter alia prove/establish that the Deed of Guarantee was
signed by the Defendant in his presence and its contents are true and correct,
which the present Plaintiff has not chosen to do. Whilst Cross-Examining the
Defendant, the Plaintiff through Q.81 also put his case to the Defendant that
since the Defendant was unable to pay the dues to the original Plaintiff, he
executed the Deed of Guarantee in favour of the original Plaintiff which the
Defendant answered in the negative.
11.5 In support of his case that the Defendant had executed the said Personal
Guarantee, the Plaintiff has also relied on a letter dated 5 th November, 1996
purportedly addressed by the Defendant to the original Plaintiff ( Exhibit-V to the
Plaint) whereunder the Defendant expressed his willingness to inter alia execute
a Personal Guarantee and to create a charge over the suit flats.
11.6 The Defendant has in paragraph 11.15 of his Written Statement denied
KPPNair 32 S-5086/98
the alleged letter dated 5 th November, 1996 (Exhibit-V to the Plaint) and has
stated that the same is fabricated and the signature is lifted or forged. The
Defendant has further stated that the letter is one more example of misuse by the
Plaintiff of stolen stationary inasmuch as the said letterhead on which the letter is
shown to have been written, is more than 5 years old as is evident from the
telephone number shown at the foot of the paper which are old telephone
exchange numbers and were not in existence and not used by the Defendant
during 1996. The exchange had changed from 811 to 361 before 1993. The
Defendant has in his evidence repeated all that is stated by him in his Written
Statement.
11.7 The Plaintiff in his Affidavit of Documents/Compilation of Documents
relied upon the said letter dated 5 th November, 1996 (Exhibit-V to the Plaint) of
which the Defendant has denied and disputed the signature as well as its contents.
The same was therefore marked as X-3. The burden of proving the said
Document was therefore on the Plaintiff. The Plaintiff has in his evidence
tendered the said Document viz. the letter dated 5 th November,1996 and has
stated that he is familiar with the signature of the Defendant and can therefore
identify the signature of the Defendant. He has not stated how the said letter was
received by the original Plaintiff i.e. through post or by hand delivery. He has
also not led the evidence of the original Plaintiff who has allegedly received the
Document from the Defendant, though it is not his case that the original Plaintiff
is not available for giving evidence. He has not given any explanation to the
KPPNair 33 S-5086/98
Defendant's allegation that he has used a letter-head which was five years old.
11.8 The Plaintiff has in this regard cross-examined the Defendant at length. He
was specifically asked whether it is correct that on 5 th November, 1996 he sent a
letter to Mr. J. P. Karwa expressing his willingness to execute a personal
guarantee to which the Defendant has stated that the said letter is a fake letter,
and the letter-head is also fake. The address and telephone numbers were not in
use at that particular time and the signature is not his.
11.9 The Plaintiff has also relied on a purported letter dated 4th December,
1996 (Exhibit-X1 to the Plaint) under cover of which the Defendant purportedly
forwarded the Personal Guarantee and an Agreement creating charge on the said
suit flats.
11.10 As regards the said letter dated 4-12-1996 ( Exhibit-X1 to the Plaint), the
Defendant has in paragraph 11.17 of his Written Statement submitted that the
same is a misuse of a stolen letter-head pre-signed by the Defendant. In 1996,
the Defendant was not using the said letter-heads and the telephone number
shown at the foot of the paper had been changed from 811 to 361 as far back as
in 1993. The Defendant has in his evidence repeated all that is stated by him in
his Written Statement.
11.11 Since the said letter dated 4 th December, 1996, purportedly written by
the Defendant to the Plaintiff and under cover of which the purported Deed of
Guarantee was forwarded to the Plaintiff by the Defendant, is not admitted by
the Defendant at the stage of admission and denials, the same was marked X-3A
KPPNair 34 S-5086/98
for identification. The Plaintiff was therefore required to prove the document.
However, the Plaintiff has not only not summoned the original Plaintiff to prove
the said Document but has not even taken the trouble to put his own case to the
Defendant viz. that the Personal Guarantee was purportedly forwarded to the
Plaintiff by the Defendant under the cover of the purported letter dated 4 th
December, 1996.
11.12 In my view, the Plaintiff has therefore failed to prove that the Deed of
Guarantee or that the Letters dated 5th November, 1996 and 4th December, 1996
were indeed executed by the Defendant and its contents are true and correct.
11.13 As regards the submission that the Deed of Guarantee is not sufficiently
stamped, the said Personal Guarantee dated 26 th November, 1996 is stamped on a
stamp paper of Rs. 100/-. It was submitted on behalf of the Plaintiff that although
the purported Deed of Guarantee dated 26th November, 1996 records, in addition
to the guarantee, the creation of a charge in respect of the two flats mentioned
therein, since there is a separate document of the same date purportedly creating
a charge in respect of the same two flats, and in view of Clause (6) of the
document titled "Deed of Guarantee", the contents of which are set out above,
the said document (Exhibit- X to the Plaint) if treated only as a Deed of
Guarantee, is adequately stamped under Article 5 of the Stamp Act prevailing on
26th November, 1996. Firstly, it is trite law that stamp duty is payable on the
instrument and not on the transactions. As such, the contention that there is a
separate document of the same date purportedly creating a charge in respect of
KPPNair 35 S-5086/98
the same two flats, did not absolve the parties from adequately stamping the
document styled as "Deed of Guarantee" as the said Document also purported to
create a charge on the said flats. Further, even if it were to be assumed that the
instrument styled as Deed of Guarantee was adequately stamped as contended by
the Plaintiff, the fact remains that, the stamp paper on which the said Deed of
Guarantee has been printed, shows that the same was purchased in the name of
Advocate Shri R.K. Kulkarni. Section 34 of the Bombay Stamp Act, as
applicable at the time of ig execution of the purported Deed of Guarantee,
mandated that no instrument chargeable with duty, which is written on a sheet of
paper with impressed stamp, shall be admitted in evidence for any purpose unless
such stamp paper has been purchased in the name of one of the parties to the
instrument. As the stamp paper for the said Deed of Guarantee was admittedly
purchased in the name of Advocate R.K. Kulkarni, and not in the name of either
of the parties thereto, by virtue of the bar contained in Section 34 of the Bombay
Stamp Act, the said Deed of Guarantee becomes inadmissible in evidence for any
purpose.
It was further submitted that the Deed of Guarantee is also not required to be
registered. In K.B. Saha & Sons Private Limited vs. Development Consultant
Limited1, the Hon'ble Supreme Court held that although a document which
requires to be mandatorily registered under the provisions of the Registration
Act, 1908, is not admissible in evidence if the same has not been registered, and
(2008) 8 SCC 564
KPPNair 36 S-5086/98
it can be used in evidence for collateral transactions/purpose as provided in the
proviso to Section 49 of the Registration Act. The said decision further states
that such collateral transaction must be independent of and divisible from the
transaction which requires registration, and the same must not by itself be
registerable. Even if one were to assume that in the present case the Personal
Guarantee constitutes a collateral transaction which is independent of, or
divisible from the creation of the charge under the same instrument, the same
would not take the Plaintiff's case any further in view of the mandatory
provisions of Section 34 of the Bombay Stamp Act (which provision unlike
Section 49 of the Registration Act, does not contain a proviso of the nature
contained in Section 49) as the said instrument cannot be admitted in evidence
until the document is stamped. In the circumstances, as the said instrument,
styled as "Deed of Guarantee" contains a specific provision with regard to the
creation of the charge, and the same clearly has not been stamped as required in
law, even if a portion of the said instrument were to be de-linked from the rest of
the instrument and treated as a separate transaction which does not require
registration, and is therefore held to be admissible for a collateral purpose, the
same cannot be looked into even in order to establish the purported guarantee as
a collateral transaction, in view of the fact that the said instrument has not been
stamped as required in law.
11.14 In any event, since it is held that the Plaintiff has failed to prove that the
Deed of Guarantee or the letters dated 5 th November, 1996 and 4th November,
KPPNair 37 S-5086/98
1996 were indeed executed by the Defendant, the question of going into the other
defences raised by the Defendant does not arise.
Issue No. 3 is therefore answered in the negative.
12. Issue No.4
"4. What is the amount that the Plaintiff is entitled to be paid?"
In view of the reasoning set out in answer to Issue Nos. 1 and 2 and Issue
No. 3 above, the Defendant in his personal capacity is not required to pay any
amount to the Plaintiff.
"5. Whether the Plaintiff proves that Defendant created charge on
the suit property i.e. flat Nos. 11 A and B, Sudhakar Building,
Narayan Dabholkar Road, Malabar Hill, Mumbai-400 006 in its
favour?
7. Whether the suit property is liable for the recovery of dues
owed by the Defendant to the Plaintiff? "
13.1 According to the Plaintiff, along with the Deed of Personal Guarantee, the
Defendant also executed an Agreement dated 26th November, 1996, whereunder
he created a charge on the suit flats towards the due payment of Rs. 95 lacs
together with the agreed interest at the rate of 24 per cent per annum. The said
Agreement was witnessed by one Shri S.L. Chandak (Exhibit-W to the Plaint).
The Plaintiff has again relied on the letter dated 5 th November, 1996 (Exhibit-V
to the Plaint and marked X-3 for identification) purportedly written by the
Defendant to the Plaintiff offering to mortgage the suit flats as security towards
KPPNair 38 S-5086/98
the total outstanding of Rs. 95 lakhs including interest till 30 th September, 1996
with further interest at the rate of 2 per cent per month from 1-10-1996 on the
outstanding amount of Rs. 95 lakhs till the final amount is paid and also the letter
dated 4th December, 1996 (Exhibit X-1 to the Plaint and marked X-3A for
identification) under which the Defendant purportedly forwarded the Personal
Guarantee as well as the Agreement creating charge on the suit flats. Both the
said Documents are denied and disputed by the Defendant. For reasons already
set out above in answer to Issue No.3, the Plaintiff has failed to prove execution
of both the said Documents by the Defendants. As far as the Agreement creating
a charge in respect of the suit flats is concerned, the same was required to be
registered under Section 17 of the Indian Registration Act. However, the same is
not registered. The Plaintiff has sought to rely on a Deed of Confirmation to
which the Deed of Personal Guarantee and the Agreement creating a charge in
respect of the suit flats have been annexed, and has tried to contend that the said
Deeds have thus been registered. The Plaintiff was questioned in Cross-
Examination vide Q/A 40-44 regarding the Agreement to create charge being
unregistered. The Plaintiff first stated that the Document for creation of charge
was subsequently registered, however he thereafter agreed that it was only the
Deed of Confirmation which was registered and not the Document for creation of
charge. The said question and answers are reproduced hereunder:
"Q.40: I suggest to you that the document of creation of Charge dated
KPPNair 39 S-5086/98
26th November 1996 (Part of Exh.P-14) is an unregistered document.
A. I think it has been subsequently registered.
Q.41 Can you tell on which date the said document Creation of
charge dated 26th November 1996 (part of Exh.P-14) was registered?
A. I do not remember.
Q.42 Can you tell us from the records?
A. Witness peruses the compilation of documents dated 28 th March
2015 and states that the said document is registered on 11 th March,
1999.
Q.43 I suggest that on 11th March 1999 the original Plaintiff Mr.
J.P. Karwa got a Deed of Confirmation registered an not the Deed of
Creation of charge dated 26th November, 1996 (part of Exh. P-14)
which is executed by Defendant.
A. On going through the documents, it is seen that the documents bear
the stamp of Registrar dated 10 th June, 2005 and the square stamp of
1999.
Per Commissioner
Witness after perusing the original compilation of documents dated 28 th
March 2015, more particularly Exhibit 'P-14' now states that my
answer to Q.42 is not correct and I now say that the Deed of Creation
of Charge dated 26th November 1996 (part of Exh. P-14) was registered
on 10th June, 2005.
Q.44 I repeat my Q.43 and again call upon you to answer the same.
KPPNair 40 S-5086/98
A. Yes."
In any event, it is trite that registration of the Deed of Confirmation would not
extend to the enclosures annexed to the said Deed of Confirmation. In other
words, by virtue of registration of a Deed of Confirmation, any document
annexed thereto does not ipso facto get registered. As also submitted by the
Defendant, the said Deed of Confirmation relates to some conditional sale and
not to an agreement for creation of charge. Even otherwise the said Document
was submitted for registration on 11th March, 1999 i.e. after almost two and half
years after its execution. As per Sections 23 and 25 of the Registration Act, a
document needs to be tendered within four months of its execution or after
explaining sufficient cause within further 4 months thereof and thereafter the
Superintendent of Stamps or Sub-Registrar does not have the authority
/jurisdiction to even entertain such a request for registration. Both Sections 17 of
Registration Act and Section 100 of the Transfer of Property Act make it
mandatory for a document creating charge to be compulsorily registered.
Section 49 of the Registration Act deals with the effect of non-registration. The
same is reproduced hereunder:
"49l Effect of non-registration of documents required to be
registered.- No document required by Section 17 or by any
provision of the transfer of Property Act, 1882, to be registered
shall -
(a) affect any immovable property comprised therein, or
KPPNair 41 S-5086/98
(b) confer any power to adopt, or
(c ) be received as evidence of any transaction affecting such
property or conferring such power,
unless it has been registered.
Provided that an unregistered document affecting immovable
property and required by this Act, or the Transfer of Property
Act, 1882, to be registered may be received as evidence of a
contract in a suit for specific performance under Chapter II of
the Specific Relief Act, 1877 or as evidence of any collateral
transaction not required to be effected by registered instrument."
13.2. For the reasons set out above, it cannot be said that the Agreement
purportedly creating the charge in respect of the suit flats is a registered
document. In my view, the same therefore cannot even be looked at by the
Court as a piece of evidence in the present Suit.
13.3. Even otherwise, for the same reasons set out whilst answering Issue No.
3, that the Plaintiff has failed to establish that the Deed of Personal Guarantee
has been executed by and between the original Plaintiff and the Defendant and
the contents of the same are true and correct, I hold that the Plaintiff has failed to
establish that the Defendant has executed the Agreement creating a charge in
respect of the suit flats (Exhibit-W to the Plaint). Issue Nos. 5 and 7 are
therefore answered in the negative. In any event it is already held whilst
answering Issue No.4 that no amount is personally payable by the Defendant to
the Plaintiff.
KPPNair 42 S-5086/98
14. Issue No.6
"6. Whether the Defendant proves that he is not the owner of the
suit property?"
14.1 The Defendant in Paragraphs 7 and 17 of his Written Statement inter alia
pointed out that he could not have created any charge in favour of the original
Plaintiff since he was not the owner of the suit flats at any time, but was and is
only in occupation of the same.
14.2
In support of his case that the Defendant is the owner of the suit flats, the
Plaintiff in paragraphs 25, 26 and 27 of his Affidavit in Lieu of Evidence deposed
as under:
"25. I say that in 1969 or thereabouts TCI offered the said
suit property to the father of Defendant herein at book value of
the flat in consideration of his service to the Company, and that
the father of the Defendant requested TCI to transfer the same
to his minor son Shri Basant Bhoruke, and accordingly TCI
passed a resolution on 24.01.1973 agreeing to transfer the suit
property to Defendant upon attaining majority or getting
married and upon payment of book value. I say that
subsequently an Agreement for Sale dated 29.05.1985 was
executed by TCI in favour of Defendant. I say that Defendant
did not pay the book value of the suit property and defaulted in
payment of Society's maintenance charges. I say that in
addition to this default various disputes cropped up between the
family members and finally were referred to sole Arbitrator. I
KPPNair 43 S-5086/98
say that on the basis of the resolution and Agreement of Sale
the Award and Decree were passed by Sole Arbitrator and
Hon'ble Calcutta High Court respectively transferring the suit
property to Defendant. I say that as per Award passed by Sole
Arbitrator dated 29.04.1994 converted into Decree of Hon'ble
Calcutta High Court dated 05.02.1997 the suit property is
transferred to Defendant unconditionally, therefore Defendant
is the owner of the suit property and at the time of execution of
the alleged conveyance deed dated 31.12.1999 TCI had no
right title or interest over the property such that they could
transfer the suit property to the Badriprasad Bhoruka Family
Trust as alleged. I say that the Award and Decree clearly show
that the Defendant is the absolute owner of the suit property. I
further say that when TCI declared the properties in 1998 to
the Hon'ble Andhra Pradesh High Court, they have not
included the suit property, therefore it is clear that they had
transferred said suit property to Defendant vide Arbitration
Award and Decree to which both Defendant and his mother
were signatories. I hereby produce on record and tender in
evidence the copies of the aforesaid Arbitration Award dated
29.04.1994 and Court Decree dated 05.02. 1997 and pray that
the same be taken on record, exhibited and admitted into
evidence.
26. I say that without setting aside the Award and/or Decree
TCI could not have transferred their right and title by
Conveyance Deed dated 31.12.1999 to Badriprasad Bhoruka
Family Trust, and therefore the said Conveyance Deed is null
KPPNair 44 S-5086/98
and void. I say that the said Conveyance Deed was executed
while there was an injunction on the Defendant from dealing
with the property by Hon'ble Bombay High Court and for this
reason also the said Conveyance Deed is null and void. I
further say that the Hon'ble Division Bench of Bombay High
Court vide their order dated 27.07.2001 has held that the suit
property belongs to Defendant only.
27. I say that the Badriprasad Bhoruka Family Trust filed a
Notice of Motion in the instant suit some time in 2004 claiming
ownership of the suit property and praying for discharge of the
Court Receiver. The said Trust withdrew the said Notice of
Motion unconditionally on 05.05.2005, therefore it is deemed
that they have admitted they are not the owners of the said suit
property. I say the Trust Deed is not registered with the Charity
Commissioner and therefore has no validity whatsoever. I say
that a Trust can be formed for immovable assets duly existing
at the time of formation of trust, that too in the name of
executor only, but Defendant's father was not the owner of the
property at the time of formation of the Trust, in fact the suit
property did not even exist at that time. It is thus clear that
Badriprasad Bhoruka Family Trust is not a legal entity and
cannot own the said suit property."
14.3 The Plaintiff in his Cross-Examination (Question/Answer 21 and
Question/Answer 22) admitted that he was aware that TCI was the owner of the
property and that the Plaintiff never made any enquiries about the title of the suit
flats. In Answer to Question 24, the Plaintiff acknowledged that TCI was the
KPPNair 45 S-5086/98
owner of the suit flats since 1968-69. In Answer of Questions 25 and 26, the
Plaintiff admitted that he has not seen any registered document whereby TCI
transferred the suit flats to the Defendant, however he maintains that it is only on
the basis of a Resolution passed by the TCI dated 24th January, 1973, the
Agreement for Sale dated 29th May, 1985, the Arbitration Award dated 29th
April, 1994 and the Decree of the Calcutta High Court dated 5th February, 1997
that he claims the Defendant to be the owner of the suit flats. In
Questions/Answers 28 and 29, the Plaintiff has admitted that the Defendant had
to pay some amounts to TCI to take ownership of the flats and subject to the said
payments, the documents were akin to an agreement of sale. Vide
Question/Answer 30, the Plaintiff admits that the Defendant never made
payment to the Company TCI. This position is admitted in Paragraph 25 of the
Plaintiff's Affidavit also. In Question/Answer 31, the Plaintiff admits that he is
not aware about any document whereby TCI transferred the suit flats in favour of
the Defendant. Thus it is clear that the Plaintiff has failed to produce any
registered conveyance showing that the Defendant was the owner of the suit
flats. The said Questions/Answers are reproduced below:
"Q.21 Before accepting the title of the Defendant, did you make
any enquiries as to who is the owner of these flats?
A. As informed by Mr. Karwa, he came to know later on that
the said flats are in the name of a Company M/s. Transport
Corporation of India (TCI).
KPPNair 46 S-5086/98
Q.22 I repeat Q.21 and once again put to you that whether you
made any enquiries as to who is the owner of these flats
before accepting the title of the Defendant to these flats?
A. As the Defendant was staying in the flat along with his
family and claiming to be the owner of the flat, no enquiries
were conducted.
Q.24 Do you know that the original builder of the building
'Sudhakar' around 1968-69, by a registered Indenture of
Transfer directly sold these flats to the Company Transport
Corporation of India?
A. In my affidavit in lieu of Examination in Chief dated 28th
March 2015 at para 24 I have acknowledged the above
position.
Q.25 Have you seen any registered document whereby Transport
Corporation of India transferred these flats to the
Defendant?
A. As already stated hereinabove in reply to Q.20 the basis for
saying that the Defendant is the owner of these flats are
Resolution, Arbitration Award dated 29th April, 1994 and
Decree of Calcutta High Court dated 5th February, 1997.
Q.26 I repeat my Q.25 and again ask you have you seen any
registered document whereby the Company Transport
Corporation of India transferred these flats to the
Defendant?
A. No.
KPPNair 47 S-5086/98
Q.28 Which document according to you, amongst these three,
transfers the ownership from the Company TCI to the
Defendant?
A. Pursuant to these documents the Defendant was required to
pay some amount to the Company TCI and take ownership
of the flat.
Q.29 Do you mean to say that these documents were akin to
agreement to sale?
A. Subject to condition of payment the Defendant was entitled
for the ownership of the flats.
Q.30 To your knowledge, whether Defendant ever made these
payments to company TCI?
A No, I do not know.
Q.31 Is there any document whereby TCI transferred the
property in favour of the Defendant?
A. I am not aware of any document, except for the documents
detailed in para 25 of my Affidavit in lieu of Examination in
Chief dated 28th March 2015."
14.4 The Plaintiff's own witness Ms. Jyoti Cheulkar (PW -2) who worked as an
Accountant in the Office of Digital World and Digital Leasing, has also in her
cross-examination admitted that the suit flats were owned by TCI, the Defendant
never paid consideration to TCI, and TCI transferred the property to the Trust.
KPPNair 48 S-5086/98
The said Question and Answers are reproduced hereunder:
"Q.14 You stated that you were also doing the personal accounts of
Basant Bhoruka, do you know whether he purchased the property
where he resides at 11, Sudhakar, N.D. Road, Mumbai-400 006?
A: In my knowledge he has not purchased the property where he
resides at 11, Sudhakar, N.D. Road, Mumbai-400 006.
Q.15: Do you know that the property where Basant Bhoruka resides
at 11, Sudhakar, N.D.Road, Mumbai-400 006 was transferred to
Badriprasad Bhoruka Family Trust on 31.12.1999?
A: Yes, I am aware.
Q.16: How do you know that the property where Basant Bhoruka
resides at 11, Sudhakar, ND.Road, Mumbai-400 006 was
transferred to Badriprasad Bhoruka family Trust on 31.12.1000?
A: I was present at the Sub-Registrar's office with Mr. Basant
Bhoruka on 31.12.1999 when the said property was transferred to
Badriprasad Bhoruka Family Trust by Transport Corporation of
India.
Q.18 : Did Mr. Basant Bhoruka ever pay any money to TCI for
buying the above mentioned property.
A: No, Mr. Basant Bhoruka did not pay any money to TCI with
respect to the purchase of the above mentioned property.
14.5. In support of his case that he is not the owner of the suit flats the
KPPNair 49 S-5086/98
Defendant relied on a notarized copy of the registered Indenture of Transfer
dated 31st December, 1999 executed between TCI and the Trustees of
Badriprasad Bhoruka Family Trust transferring the suit flats in favour of the
said Trust (Exhibit D-1), original electricity bills of BEST Undertaking for the
period October to December, 1996 (Exhibit D-2), Original Resolution of
Sudhakar Cooperative Housing Ltd. dated 27th September, 1970 (Exhibit D-3),
original Order under Section 101 of the Maharashtra Co-operative Societies Act,
1960, dated 30th December, 2002 passed by the Learned Deputy Registrar, Co-
operative Societies (Exhibit D-4) and a Certified Copy of Order in Revision
Application No. 413 of 2005 dated 22.10.2012 passed by the Learned District
Registrar along with the official translation into English by the Chief
Translator's Office of High Court dated 7th December, 2012 (Exhibit D-5).
14.6. The Defendant has, in his Affidavit in Lieu Of Evidence pointed out that
the said flats were owned by a Company called Transport Corporation of India
(TCI) from 1968 till 1999 and since then the said flats are owned by
Badriprasad Bhoruka Family Trust ('the Trust'). The said flats do not belong to
him and never belonged to him. The said flats were owned from their inception
by TCI, which was well within the knowledge of the original Plaintiff, as
evidenced by the letter of the Society dated 28th April, 1999, addressed to the
Advocates for the original Plaintiff and annexed as Exhibit-C to the Plaintiff's
own additional Affidavit in Support of the Notice of Motion No. 180 of 1999.
KPPNair 50 S-5086/98
The Plaintiff's original Suit was not containing a prayer for declaration of charge
against the property. In spite of the Society informing the Plaintiff that TCI is
the owner of the said flats and not the Defendant, the Plaintiff some time in
May, 1999 amended the Suit to include such a prayer. TCI further sold the said
flats to Badriprasad Bhoruka Family Trust by a registered Indenture of Transfer
dated 31st December, 1999. The electricity bills issued by the BEST
Undertaking for the period October to December, 1996, i.e. at the time when
the Plaintiff alleges that the Defendant signed the purported Guarantee Deed
and the Agreement to create charge, shows that the owner of the flats was TCI.
TCI purchased the said flats at the inception, in or around the year 1968, and
was allotted the said flats and car parking spaces and servants quarters as per the
Resolution of the said Society dated 27th September, 1970. In 1968, TCI
allowed the father of the Defendant late Shri Badriprasadji Bhoruka who was a
Partner in TCI to occupy the same along with the members of his family,
including himself. TCI was first a Partnership Firm and was then converted into
a Private Limited Company and thereafter to a Public Limited Company, and
Shri Badriprasad was the whole-time Director of TCI. Since Shri Badriprasad
was instrumental in the growth and success of TCI, during the life time of late
Shri Badriprasad, Shri P.D. Agarwal, Chairman of TCI offered to transfer the
said flats in favour of Shri Badriprasad at book value in consideration of his
valuable life-time services to TCI. The late Badriprasad had settled a Family
Trust by the name Badriprasad Bhoruka Family Trust ('the Trust') vide Trust
KPPNair 51 S-5086/98
Deed dated 10th September, 1966. In the said Trust Deed he had expressly
stated his wish that all his properties, distributions and entitlements would
belong to the Trust for the joint enjoyment of his family members, but since the
Defendant was 8 years old at the time of Shri Badriprasad's death and therefore
unaware of his affairs, in the year 1973 after the death of late Shri Badriprasad,
TCI passed a Resolution dated 24th January,1973 wherein the Defendant was
shown as the Nominee of his late father. Upon the Defendant attaining majority,
the said Resolution was followed up by an Agreement of Sale dated 29th May,
1985 which required book value of the said flats to be paid by the Defendant as
a condition precedent to the execution of the Agreement of Sale and the said flats
were not transferred and continued to remain in the name of TCI. Multiple
disputes ensued between the family members from 1985 onwards relating to
property and shareholding issues leading to protracted litigation before this
Court and the Calcutta High Court which are a matter of record. The Defendant
has further deposed that all the disputes were finally referred to a Sole
Arbitrator who passed his Award on 29th April, 1994 which was converted into
Rule of Court on or about 5th February, 1997. The Award and Decree explicitly
recorded that TCI remained the owner of the said flats and passed directions for
transfer of the said flats in the name of the Defendant upon fulfilment of
conditions, including payment of book value. However, even after the
Arbitration Award and Decree, disputes continued between the family members
as the Trustees of the Trust insisted that TCI should not transfer the said flats in
KPPNair 52 S-5086/98
the name of the Defendant on the ground that it was the wish of his late father
that the said flats be transferred to the Trust for the joint enjoyment of all family
members and that the Defendant should not be made the sole owner thereof. In
the year 1999, the mother of the Defendant late Kamladevi Bhoruka filed a Suit
and obtained an injunction restraining TCI from transferring the said flats in
favour of the Defendant. TCI decided to transfer the said flats to the Trust.
14.7 The Defendant has further deposed that when Notice of Motion No. 180
of 1999 taken out by the Plaintiff in the instant Suit appeared on Board for
hearing before this Court from time to time, his Advocates did not appear at the
hearing nor did they inform him about the dates of the hearing. No notice was
served upon the Defendant directly by this Court and thus he did not come to
know about the proceedings and hence by an ex-parte order the Court Receiver
came to be appointed in respect of the said flats solely upon the original
Plaintiff's misrepresentation that the said flats are owned by the Defendant and
on the basis of his conduct and non-appearance.
14.8. The Defendant has in support of his case, that he has never been the
owner of the said flats relied on the Recovery Proceedings No. 1960 under
Section 101 of the M.C.S. Act,1960 initiated by the said Society against TCI
and the Defendant, wherein the said Society had impleaded TCI as Respondent
No.1 in the capacity of owner of said flats and the Defendant in his capacity as
the occupant of the same. In the course of the proceedings, the said Society
KPPNair 53 S-5086/98
dropped the proceedings against the Defendant, and the Dy. Registrar of Co-
operative Societies, "D" Ward exercising his powers under Section 101 of the
MCS Act, 1960 observed in Paragraph 8 of his Order dated 30th December,
2002 that it is apparent that the Defendant was not and never was a member or
owner of the subject premises and if the proceeding against the Defendant
would not have been withdrawn by the Society, the same would have been
dismissed against the Defendant. The Society filed Revision Application No. 413
of 2005 against the above mentioned Order of the Dy. Registrar dated 30th
December, 2002, which appeal was heard and disposed off on 22nd October,
2012, by the District Deputy Registrar confirming the Order of the learned Dy.
Registrar.
14.9 The Defendant not being the owner of the property is not only the
consistent case of the Defendant in his pleadings and affidavits but even in his
Cross Examination the Defendant has maintained the same stand, as is apparent
from Q/A 62-76 and 82 reproduced hereunder:
"Q. 62 Is it not true that you always claimed in the Society that
these flats were owned by you?
A. No, it is not true. Neither I was owner nor have I claimed to
be the owner and all the documents speak for themselves.
Q.63 When the matter came up before Hon'ble Justice Shri
D.K. Deshmukh on 17.12.1998 for ad interim reliefs, why
did you not state that before Hon'ble Justice Shri D.K.
KPPNair 54 S-5086/98
Deshmukh that these flats were not owned by you?
A. I had instructed my lawyer to state that I am not the owner.
Q.64 Did you ever inform the Hon'ble High Court that you are
not the owner of these flats?
A. I have informed the Hon'ble High Court many times. It is
also clearly mentioned in the Written Statement filed on
behalf of Defendant in many proceedings from 2001
onwards. The Plaintiff was also aware that the flats belong
to TCI (Transport Corporation of India) and then
subsequently to the Badriprasad Bhoruka Family Trust and
he choose not to make the owners party to the suit.
Q.65 Is it not true that in January 1973 the owner Transport
Corporation of India by its Resolution dated 24.1.1973
resolved to transfer these flats to you?
A. In January 1973 I was 12 years old. My father was
Promoter Director of TCI. In lieu of his life time service,
TCI decided to give him the flats on book value during his
life time, but my father passed away suddenly in 1969, so
TCI decided to put my name on that Resolution as I was the
son.
Q.66 Is it no true that TCI vide agreement dated 29.5.1985
agreed to transfer the said flats in your name on payment
of book value?
A. Yes, there was such agreement.
KPPNair 55 S-5086/98
Q.67 Is it not true that on 29.5.1985 you were an adult?
A. Yes, I was.
Q.68 Is it not true that subsequently you had disputes with TCI
and you claimed the ownership of these flats?
A. Yes, I claimed the flats to be transferred to me as per the
Resolution of January 1973 and the agreement dated
29.5.1985.
|Q.69Is it not true that all these disputes were referred to
arbitration before the sole Arbitrator Mr. Nathmal
Himatsingka?
A. Yes, it is true.
Q.70 Is it not true that by an Award dated 29.4.1994 the said
Arbitrator directed the TCI to transfer these flats in your
favour?
A. Yes,TCI was directed to transfer the said flats in my favour
in terms of the Resolution dated January 1973 and
Agreement dated 29.5.1985 upon payment of book value.
Q.71 Is it not true that the award was filed before the Hon'ble
Calcutta High Court and it became decree on 5.2.1997?
A. Yes, it is true.
Q.72 Is it not true that by virtue of Award and Decree, you
became owner of these two flats?
A. No, this is not true. Firstly, I never paid consideration that
KPPNair 56 S-5086/98
was required to be paid. Secondly, TCI never made any
conveyance deed of the said flats in my favour because my
mother and other trustees of Badriprasad Bhoruka Family
Trust objected to conveying the said flats in my favour and
demanded to TCI that the flats should be transferred to the
Trust settled by my father, as per the wishes of my father.
Finally on 31.12.1999 TCI conveyed the flats to the
Badriprasad Bhoruka Family Trust by a registered
Indenture of Transfer dated 31.12.1999.
Q.73 Whether you consented to such transfer by TCI to the
Badriprasad Bhoruka Family Trust?
A. No, the question of consent did not arise. The owner of the
property at that time TCI decided to transfer the said flats
to Badriprasad Bhoruka Family Trust. They called upon
me to sign as a witness to avoid further disputes, which I
did.
Q.74 Can you tell us why Sudhakar Co-operative Housing
Society Ltd. when it initiated proceedings against you under
Section 101 of the Maharashtra State Co-operative
Societies Act, 1960, it added TCI and you as a party,
however did not add Badriprasad Bhoruka Family Trust as
a party to those proceedings?
A. They recognised TCI as the owner and member of the
Society and me as an occupant. The society did not
transfer the flats to the Badriprasad Bhoruka Family Trust
in the books, nor made the Trust a member because of the
pending dues.
KPPNair 57 S-5086/98
Q.75 Who is the member now of those flats in the books of the
Society?
A. According to my knowledge and information, I believe the
trust has approached the Dy. Registrar of Co-op. Society
and has got an order to the effect that the Trust is now a
deemed member of the Society.
Q.76 How can you say that the suit property belongs to TCI on
31.12.1999 when during the proceedings of their demerger
in 1999 they disclosed a list of their properties to the
Hon'ble
Andhra Pradesh High Court, but the suit
properties do not find mentioned in that list?
A. If a Company does not disclose a property, it does not mean
that the ownership of the property is taken away and in any
event I cannot explain why TCI did, what it did. The
question will have to be asked to TCI. I know TCI was the
owner as per the Sub-Registrar's record and on 31.12.1999
TCI executed the transfer to the Trust.
Q.82 I put it to you that you are the owner of the suit flats.
A. It is not true. Till 31.12.1999 TCI was the owner of those
flats and from 31.12.1999 the Badriprasad Bhoruka Family
Trust is the owner of those flats. At no point of time I ever
became the owner of the said flats."
14.10 From the aforestated submissions of the Plaintiff and the Defendant as
also the Cross-Examination of the Plaintiff and the Defendant, it is clear that the
suit flats till date are not transferred in the name of the Defendant. It also
KPPNair 58 S-5086/98
appears that the said flats were not transferred in the name of the Defendant
because since the year 1985 the Defendant did not comply with the conditions
insisted upon by TCI, viz. to pay the book value of the flats to TCI. It appears
that TCI has on 31st December, 1999 transferred the flats in the name of the
Trust. The Plaintiff has categorically stated in his Answer to Question No. 20 of
his Cross-Examination that the basis on which he claims that the Defendant is
the owner of the suit flats is the Resolution passed by TCI dated 24th January,
1973, the Agreement for Sale dated 29th May, 1985, Arbitration Award dated
29th April, 1994 and the Decree of Calcutta High Court dated 5th February,
1997. In none of these documents, the flats stood transferred in the name of the
Defendant. In fact, in the case of Amol Bhalchandra Joshi and others vs. Deorao
Santoshrao Bhongade2 a learned Single Judge of this Court has held that merely
because a decree for specific performance is passed, it cannot be presumed
that the decree-holder is bound to get a sale deed executed in his favour. The
same would be complete only upon execution of a sale deed in favour of the
decree-holder either by the vendor/judgment debtor or through the process of
Court. Therefore, in my view, it is established that the Defendant is not the
owner of the suit flats and Issue No. 6 is therefore answered in the negative.
15. The Suit is accordingly disposed of as dismissed with no order as to costs.
(S.J. KATHAWALLA, J.)
2011 (2) Bom. C.R. 537
