Bombay High Court
M/S. Gowani Hotel Private Limited Thr. ... vs Shri. Vinod Dhanaji Bhoir And Others on 22 December, 2023
Author: N. J. Jamadar
Bench: N. J. Jamadar
2023:BHC-AS:39385
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
APPELLATE SIDE CIVIL JURISDICTION
APPEAL FROM ORDER NO.241 OF 2023
WITH
INTERIM APPLICATION NO.3346 OF 2023
WITH
APPEAL FROM ORDER NO.444 OF 2023
WITH
APPEAL FROM ORDER (ST.) NO.10020 OF 2023
WITH
INTERIM APPLICATION NO.7975 OF 2023
M/s. Siddhi Real Estate Developers and Others ...Appellants
vs.
Vinod Dhanaji Bhoir and Others ...Respondents
Mr. Pravin Samdani, Senior Advocate a/w. Mr. Karl Tamboly, Mr.
Hrushi Navrekar, Mr. Samit Shukla, Mr. Parag Kabadi and Mr.
Abhishek Kothari i/b. DSK Legal, for the Appellants.
Mr. P.S. Dani, Senior Advocate i/b. Mr. Sachin Hande, for the
Respondents in AO No. 241 of 2023.
Ms. Dipali Mainkar, for the Appellants in AO No. 444 of 2023 and
Respondent No. 6 in AO No. 241 of 2023.
CORAM : N. J. JAMADAR, J.
RESERVED ON : JULY 25, 2023
PRONOUNCED ON : DECEMBER 22, 2023
JUDGMENT :
1. All these appeals are directed against an order dated 23 rd
March, 2023 passed by learned Civil Judge Senior Division, Thane
on an application for temporary injunction (Exhibit 5) in Special
Civil Suit No. 48 of 2022. By the said order, the learned Civil Judge
was persuaded to restrain the defendant No.1/ appellant in Appeal
From Order No. 241 of 2023; defendant No. 2/appellant in Appeal
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From Order No. 444 of 2023 from creating third party interest in
any manner only in respect of suit properties bearing survey Nos.
59/1A, 59/1B and 59/1C (Old Survey Nos. 116/1) admeasuring 36.6
R situated at Balkum/Dhokali, Thane (the suit property) till the
final disposal of the suit.
2. For the sake of convenience and clarity, the parties are
hereinafter referred to in the capacity in which they are arrayed in
the suit.
3. Background facts leading to these appeals can be summarized
as under:-
3A. Vithu Hira Bhoir, the predecessor in title of the
plaintiffs and defendant No. 72 had acquired the suit property
under the Conveyance Deed dated 21st December, 1938 from
late Bendya Hasha Bhoir, late Ramchandra Bendya Bhoir, late
Balkrushna Bendya Bhoir, late Hasha Hira Bhoir and late
Jagannath Hasha Bhoir. The suit property came to be
mutated in the name of the said Vithu Bhoir in the revenue
records vide Mutation Entry No. 644.
3B. The plaintiffs asserted that the deceased Vithu
Bhoir during his life, and, after his demise, the plaintiffs and
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defendant No. 72, have been in lawful possession and
cultivation of the suit property. However, since few years
prior to the institution of the suit, the plaintiffs and defendant
No. 72 had not been cultivating the suit property as it was un-
economical. Thus, the suit property was lying barren and
vacant.
3B. The plaintiffs averred, in the month of December,
2020 some unknown persons made an effort to take forcible
possession of the suit property. It transpired that they were
the representatives of defendant Nos. 1 and 2. The plaintiffs
further averred that on a subsequent visit they noticed that
piling activities have been carried out over the suit property.
Upon being questioned, the representatives of defendant Nos.
1 and 2 informed that defendant Nos. 1 and 2 had purchased
the suit property. The plaintiffs averred, upon further inquiry
it transpired that the defendant Nos. 3 to 41 and 58 to 63 and
their predecessors in title had got their names mutated to
record of rights of the suit property bearing new Survey Nos.
59/1B/1, 59/1B/3, 59/1/C and on the strength thereof
executed a Deed of Conveyance on 19 th April, 2008 in favour
of defendant No. 1. Likewise, defendant Nos. 42 to 57 and 64
to 71 and their predecessors in title by surreptitiously getting
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their names mutated to the record of right of suit property
bearing new Survey Nos. 59/1A/1 and 59/1A/3 had executed
a registered conveyance in favour of defendant No. 2 on 18 th
March, 1987. It further transpired that defendant Nos. 1 and
2, in turn, had surrendered a portion of the suit property in
favour of Thane Municipal Corporation, defendant No. 73 for a
road under registered instrument dated 31 st May, 2016 and
obtained benefits in the form of TDR. Resultantly, the name of
Thane Municipal Corporation also came to be mutated to the
portions of new survey Nos.59/1A/2 and 59/1B/2.
3C. The plaintiffs averred that the defendant Nos. 3 to
71 had no right, title or interest in the suit property as the
predecessors in title of defendant Nos. 3 to 71 had already
conveyed the suit property in favour of late Vithu Bhoir, the
predecessor in title of the plaintiff and defendant No. 72. The
ownership of the suit property continued to vest in the
plaintiffs and defendant No. 72. Thus no lawful title could pass
to defendant Nos. 1, 2 and 73 on the basis of aforesaid
instrument. As the defendants did not make any amends
despite the service of notice, the plaintiffs were constrained to
institute the suit seeking declaration that the conveyance
dated 21st December, 1938 in favour of late Vithu Bhoir was
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legal, valid and binding, and the plaintiff became absolute
owner of the suit property, the Deeds of Conveyance dated
18th March, 1987 and 19th April, 2008 and the instrument
dated 31st May, 2016 executed by defendant Nos. 1 and 2 in
favour of defendant No. 73 were void, illegal and did not bind
the plaintiffs and defendant No. 72 and the consequential
relief of cancellation of those instruments and clear and
vacant possession of the suit property.
3D. In the said suit, the plaintiffs filed an application
for temporary injunction seeking to restrain the defendants
No. 1 to 71 and 73 from selling, alienating, transferring or
otherwise creating third party interest in and/or dealing with
the suit property and also to restrain defendant No. 73 from
granting any TDR in respect of suit property and any
permission/approval for development over the suit property.
4. In the said application, after adverting to the case set up in
the plaint, the plaintiffs asserted that if the injunction, as sought,
was not granted, the plaintiffs would suffer an irreparable loss as
defendant Nos. 1 and 2 would erect, construction and create third
party interest therein and thereby frustrate the claim of the
plaintiffs.
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5. The defendant Nos. 1 and 2 resisted the prayers in the
application for temporary injunction contending, inter alia, that the
Deed of Conveyance dated 21 st December, 1938 in favour of late
Vithu Bhoir referred only to old Survey No. 116 and not Survey No.
116/1. There was significant discrepancy in the area of land as well.
Under the Deed of Conveyance an area admeasuring 33 guntha was
purported to be sold, whereas, in the instant suit the plaintiffs have
laid claim over an area admeasuring 37.6 gunthas (3803.92
sq.mtrs.).
6. It was further contended that on 25 th May, 1951 pursuant to
direction/ hukum (order) No. PHS/25.5.1951 and as per Purvani
Akar Phod Patrak (Hissa Form No. 12), Gunakar Book, the record of
rights with respect to several Hissa numbers for village Balkum
(including the suit property) came to be corrected, by way of
Mutation entry No. 959 dated 24 th December, 1951. Hasha Hira
Bhoir's name was mutated as the occupant (Kabjedar) of a portion
of the property bearing old Survey No. 116/1A (now 59/1A/1,
59/1A/2 and 59/1A/3), and Bendya Bhoir was shown the Kabjedar
of the balance portion of the suit property. Vithu Bhoir, the
predecessor in title of the plaintiffs was shown the Kabjedar of the
properties, then bearing Survey Nos. 89/9C, 213/1C, 233/5/6,
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233/5/9, 233/5/12, 125/5B, 125/5D and 77/3C. On the strength of
the said Mutation entry No.959, subsequently, the names of Vithu
Bhoir and his successors in interest as well as Hasha Bhoir and
Bendya Bhoir and their successors in interest were mutated to the
record of rights of the respective lands and they accordingly
continued to cultivate their respective lands.
7. The defendants contended after the demise of Vithu Bhoir, the
names of his successors in interest were mutated to the properties
which stood in his name vide Mutation entry No. 2490 dated 28 th
March, 1978. The successors interest of Vithu Bhoir conveyed the
properties in favour of defendant No. 1. It was contended that
Mutation entry No. 959 entailed the consequence of realignment of
right, title and interest qua the suit property in favour of defendant
Nos. 1 and 2's predecessors in title and simultaneously conferment
of right, title and interest on Vithu Bhoir in the new properties,
which were thitherto not owned by the late Vithu Bhoir.
8. Banking upon the Deed of Conveyance dated 18th March,
1987 executed by the heirs of Hasha Bhoir in favour of defendant
Nos. 1 and 2 and Deed of Conveyance dated 9 th April, 2008 executed
by successors in interest of Bendya Bhoir in favour of defendant No.
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2, the defendant Nos. 1 and 2 claimed that they acquired absolute
ownership over the suit property. In any event, defendant Nos. 1
and 2 were the bonafide purchasers of the suit property without
notice of the alleged claims of the plaintiff, for valuable
consideration. The defendants contended that the transfer in favour
of defendant Nos. 1 and 2 were also valid as the instruments were
executed by the persons who were the ostensible owners of the suit
property.
9. Moreover, since the year 2014, the defendant Nos. 1 and 2 had
been developing the huge tract of land including the suit property,
by obtaining the permission of the planning authority. Several
instruments have been executed by defendant Nos. 1 and 2 in
favour of the third party purchasers in respect of flats and shops
being developed in the said project. The suit was thus stated to be
barred by limitation and the prayer for equitable reliefs suffered
from delay and laches. The grant of injunction in the face of
substantial developments by the defendant Nos. 1 and 2 at a huge
cost, would entail grave prejudice not only to defendant Nos. 1 and 2
but also to the purchasers in whose favour the rights were created.
10. It would be contextually relevant to note that the learned
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Civil Judge by an order dated 19 th October, 2022 had initially
granted an interim injunction. The said order was carried in appeal
before this Court. By an order dated 23rd February, 2023 in Appeal
From Order No. 1170 of 2022 and connected matters, this Court
was persuaded to set aside the said order and remit the matter back
to the Civil Court with a direction to decide the interim application
afresh after providing effective opportunity to the parties.
11. After the parties filed additional pleadings and hearing the
parties, the learned Civil Judge, by the impugned order, was
impelled to again restrain the defendant Nos. 1 and 2 from creating
any third party interest in the suit property holding, inter alia, that
prima facie the plaintiffs and defendant No. 72 appeared to have a
better title to the suit property and the balance of convenience
tilted in favour of the plaintiffs and defendant No. 72 and they
would suffer irreparable loss in the event the defendant Nos. 1 and
2 carry out the construction and create third party rights therein
as that would render the decree which may be eventually passed, in
the event the plaintiffs succeed, infructious.
12. The learned Judge, inter alia, observed that there was nothing
to erode the validity and sanctity of the registered conveyance
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dated 21st December, 1938 executed in favour of Vithu Bhoir, the
predecessor in title of the plaintiffs and to show that the defendant
Nos. 1 and 2 derived better title on the basis of entries in the
revenue record which were made for fiscal purpose. However, the
learned Judge, considered it appropriate to restrain the defendant
Nos. 1 and 2 from creating third party interest as in the view of the
learned Judge restraining the defendants from carrying out
construction would not have been equitable as the defendant Nos. 1
and 2 had raised many buildings by amalgamating various
properties.
13. Being aggrieved by and dissatisfied with the order restraining
defendant Nos. 1 and 2 from creating third party interest in the suit
property, the defendant No. 1 M/s. Siddhi Real Estate Developers
has preferred Appeal From Order No. 241 of 2023 and defendant
No. 2 has also assailed the order by filing Appeal From Order No.
444 of 2023. The plaintiff Nos. 1 to 6 have also assailed the
impugned order to the extent the learned Judge declined to grant
the relief of temporary injunction restraining the defendant Nos. 1
and 2 from carrying out the construction and defendant No. 73
from granting TDR and approvals to the development over the suit
property.
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14. As all the appeals assailed the very same order and common
questions of law and facts arise for consideration, all the appeals
were heard together and are being decided by this common
judgment.
15. I have heard Mr. Pravin Samdani, learned Senior Advocate for
the appellants in Appeal From Order No. 241 of 2023; Mr. P.S. Dani,
learned senior counsel for the respondents in Appeal From Order
No. 241 of 2023 and Ms. Dipali Mainkar, learned counsel for the
appellants in Appeal from Order No. 444 of 2023 and for
respondent No. 6 in Appeal From Order No. 241 of 2023, at some
length. The learned counsel took the Court through the pleadings
and the documents tendered before the Court. The learned counsel
have also tendered the written submissions in elaboration of the
submissions canvassed across the bar.
16. Mr. Samdani, learned senior advocate for the appellant, took
a slew of exceptions to the impugned order. First and foremost, the
learned trial Judge lost sight of the fact that the plaintiffs failed to
establish the nexus between old Survey No. 116 which was referred
to in the Conveyance dated 21st December, 1938 and the suit
property. There is no material to indicate that old survey No. 116
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which was originally claimed by the plaintiffs got converted into the
suit property. Secondly, the discrepancy in the area of old survey
No. 116 which was acquired under the Sale Deed and the suit
property was also not properly accounted for. It was urged that in
the year 2008, the plaintiffs had sold an area admeasuring 7340 sq.
mtrs. deriving title thereto on the strength of Mutation entry No.
959 of 1951 which was the property presumably acquired under
the Sale Deed dated 21st December, 1938.
17. Secondly, Mr. Samdani urged that the plaintiffs had allowed
the vendors of defendant Nos. 1 and 2 to sell the respective portions
of the suit property as the ostensible owners thereof and were thus
precluded from questioning the title of the defendant Nos. 1 and 2
thereto. A number of circumstances including certification of
Mutation entry No. 959, mutation of the names Bendya and Hasha
Bhoir and their predecessors in title to various portions of the
property covered by Mutation entry No. 959, dealing with the
properties which were mutated in the name of Vithu Bhoir under
the said Mutation entry No. 959 by the plaintiffs and their
predecessor in title and not claiming the suit property as the
property owned by the plaintiffs in the return filed under section 6
of the Urban Land (Ceiling and Regulation) Act, 1976 and
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conversely the vendors of the defendant Nos. 1 and 2 laying such
claim, were pressed into service to bolster up the case that the
vendors of the defendant Nos. 1 and 2 were the ostensible owners of
the suit property.
18. Thirdly, the plaintiff's cause suffers from the vice of
inordinate delay and laches. Elaborating this point, Mr. Samdani
urged that there is no material to indicate that plaintiffs or their
predecessor in title ever cultivated any portion of the suit property
since 1938. The plaintiffs and defendant No. 72 had slept over their
alleged rights and despite categorically recording the said fact in
the impugned order, the learned Civil Judge went on to grant
equitable relief in favour of the plaintiffs. The conduct on the part of
the plaintiffs in not resisting the development over the suit
property being carried out by the defendant Nos. 1 and 2 since the
year 2014 despite staying in the vicinity thereof, was also urged by
Mr. Samdani as a ground which dis-entitles the plaintiffs from the
equitable relief of injunction.
19. Mr. Samdani further urged that the learned Judge committed
a manifest error in not properly appreciating the aspect of balance
of convenience and irreparable loss. The defendant Nos. 1 and 2 had
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developed a number of properties including the suit property by
amalgamating various holdings, substantially. Third party interests
have been created in the suit property over a period of time. To
restrain the defendant Nos. 1 and 2 from creating third party rights
in the suit property, at this distant point of time, entails the
consequences of jeopardizing the development of the entire project.
The learned Judge, lost sight of the principle that all the three pre-
requisites for grant of temporary injunction must exist
simultaneously, and granted interim injunction being swayed by the
fact that the prima facie the plaintiffs appeared to have a better
title. Such an approach vitiated the determination, urged Mr.
Samdani.
20. Ms. Mainkar, learned counsel for the appellants in Appeal
From Order No. 444 of 2023, adopted the submissions of Mr.
Samdani.
21. Mr. Dani, learned senior advocate for the plaintiff/
respondents countered the submissions on behalf of the defendant
Nos. 1 and 2, with equal force. Mr. Dani would urge that the
defendant Nos. 1 and 2 can not derive better title than what their
alleged vendors had. In the face of the registered Sale Deed dated
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21st December, 1938 in favour of Vithu Bhoir, the predecessor in
title of the plaintiffs executed by the predecessor in title of
defendant Nos. 3 to 71, no semblance of title in the suit property
vested in the vendors of the defendant Nos. 1 and 2 and, therefore,
the learned Civil Judge was absolutely justified in returning a
finding that the plaintiffs had made out a prima facie case. Such a
title, acquired under a registered instrument, can not be displaced
by the entries in the revenue record. Mutation entry No. 959,
according to Mr. Dani, cannot constitute a source of title over the
properties mentioned therein as those entries are made only for
fiscal purpose.
22. Mr. Dani further submitted that the alleged delay and laches,
sought to be pressed into service on behalf of the defendant Nos. 1
and 2, is a subterfuge. The plaintiffs have categorically asserted
that the defendant Nos. 1 and 2 were developing other properties
and only when the defendant Nos. 1 and 2 started to encroach over
the suit property, the plaintiffs had a cause of action. Immediately
after noticing the wrongful act on the part of defendant Nos. 1 and
2, the plaintiffs, approached the revenue authorities, gave notice to
the defendants and, eventually, instituted the suit. Therefore, the
aspect of delay, in the facts of the case, does not impair the claim for
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equitable relief of injunction.
23. Lastly, Mr. Dani would urge that the learned Civil Judge was
in error in not granting the plaintiffs prayers in the application for
temporary injunction to the fullest. Mr. Dani submitted that once a
finding was recorded that the plaintiffs and defendant No. 72 had
prima facie title over the suit property, there can be no cloud on the
incident of plaintiffs ownership over the suit property. The learned
Judge thus fell in error in permitting the defendant Nos. 1 and 2 to
carry out construction over the suit property. Eventually, if the
defendants fully develop the suit property, equities would intervene
and the plaintiffs would be left in the lurch. Therefore, according to
Mr. Dani, the trial Court ought to have restrained the defendant No.
1 and 2 from carrying out further construction over the suit
property. To this extent, the exercise of discretion by the trial
Court, according to Mr. Dani, requires correction in appeal.
24. To begin with, few un-controverted facts. The claim of the
plaintiffs that they are the successors in interest of Vithu Bhoir is,
by and large, not seriously contested. Indisputably, the sheet anchor
of the plaintiff's claim is registered Sale Deed dated 21 st December,
1938 in favour of Vithu Bhoir. Under the said Sale Deed, property
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bearing old survey No. 116 admeasuring 33 Gunthas was acquired
by Vithu Bhoir. There is not much controversy over the fact that
pursuant to the said Sale Deed, the name of Vithu Bhoir was
mutated to the record of rights of the said land vide Mutation entry
No. 644 though the said Mutation entry is not forthcoming.
25. The execution of the instruments in favour of the defendant
Nos. 1 and 2 namely the Deed of Conveyance dated 18 th March,
1987 by the successors in interest of Hasha Bhoir in respect of new
Survey Nos. 59/1A/1, 59/1A/2 and 59/1A/3 and Deed of
Conveyance dated 19th April, 2008 by the successor in interest of
Bendya Bhoir in respect of Survey Nos. 59/1B/1, 59/1B/3, 59/1/C
are rather uncontroverted though the parties are at issue over the
vendors title to the said lands.
26. Likewise, the certification of Mutation entry No. 959, on 24 th
December, 1951 evidencing the Purvani Akar Phod Patrak (Hissa
Form No. 12) is not much in contest. The controversy revolves
around the consequences that emanate from the said Mutation
entry qua the right, title and interest of the parties.
27. The controversy between the parties essentially revolves
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around the question as to whether the property which was acquired
by Vithu Bhoir under the Sale Deed dated 21st December, 1938 is
the suit property or on account of the certification of Mutation
entry No. 959 the rights and interest in the various properties were
realigned and the suit property thereby stood vested in the
predecessors in title of defendant Nos. 3 to 71, and Vithu Bhoir and
his successors and defendant Nos. 3 to 71 exercised incidence of
ownership over the respective properties mutated against their
names vide Mutation entry No. 959.
28. There can be no duality of opinion that the entries in the
record of rights are made for fiscal purposes. Mutation entries do
not make or unmake title. In the case at hand, Mutation entry No.
959 represents the mutation of the properties pursuant to the
directions of the Settlement Commissioner based on actual
possession of the holders captioned as 'Purvani Akar Phod Patrak'.
The entries made pursuant to Mutation entry No. 959, it seems,
have been acted upon and subsequent mutations have taken place
over a period of 70 years. These mutations, according to the
plaintiffs, do not displace the title of Vithu Bhoir acquired under the
registered instrument dated 21st December, 1938.
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29. The learned Civil Judge was persuaded to hold that the Sale
Deed dated 21st December, 1938 commands precedence over the
title claimed on the strength of the mutation entries. At the first
blush, the approach of the learned Judge can not be faulted at. The
learned Judge was perfectly justified in recording an observation
that the question as to whether the predecessor in title of the
defendant Nos. 1 to 71 acquired title over the suit property on the
strength of entries in Akar Phod Patrak and Gunakar Book can only
be decided on the basis of evidence at the final adjudication of the
suit.
30. Nonetheless, the attendant facts and circumstances, as
emerged from the record, deserve to be considered in taking a
prima facie view of the matter. Two facets of defendant Nos. 1 and
2's case deserve consideration. First the certification of Mutation
entry No. 959 in the form of Purvani Akar Phod Patrak and the
consequences that emanated therefrom. Second, defendant Nos. 3
to 71 being the ostensible owners of the suit property.
31. On the first count as noted above, the edifice of the claim is
based on Mutation entry No. 959. Mr. Samdani laid emphasis on the
fact that in Mutation entry No. 959, Survey No. 116, which was
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acquired under the Sale Deed dated 21 st December, 1938, was not
shown against the name of Vithu Bhoir though a number of other
survey numbers were shown to have been mutated in the name of
Vithu Bhoir. In contrast, survey No. 116/1A was mutated in the
name of Hasha Bhoir and 116/1C in the name of Bendya Bhoir and
those survey numbers were re-numbered as 116/1A and 116/1B
and 116/1C respectively. Mr. Samdani would thus urge with a
degree of vehemence that under the Purvani Akar Phod Patrak, the
lands which were thitherto not owned by the holders were allotted
to them and few of the lands which they were holding were
divested.
32. The aforesaid submission is ex facie borne out by the record.
The question as to what is the utility of the entries in the Purvani
Akar Phod Patrak wrenches to the fore. It appears that after
Mutation entry No. 959, record of rights in respect of the lands
were maintained in conformity with the entries made therein. At
this stage, however, it would be difficult to draw a definitive
inference on the strength of the continuity in the record of rights of
lands to make or unmake the title thereto.
33. The conduct of the parties may shed light on the animus of the
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parties qua the properties shown in the Mutation entry No. 959
against their respective names. Whether the parties exercised any
dominion over those properties as owners thereof ?
34. First the three instruments under which Defendant Nos.1 and
2 acquired the subject lands including the suit property. On 18
March 1987, the successor in interest of Hasha executed a
conveyance in favour of Defendant No.2 in respect of Survey
Nos.116/H/1A admeasuring 2320 sq.mtrs. for a consideration of
Rs.2,36,555/-. On 25 February 2008, the Plaintiffs and other
successors in interest of Vithu executed a conveyance in favour of
Defendant No.1 in respect of lands bearing old Survey No.125/5B,
125/5D, 213/1C, 233/5/6, 233/5/9 and 233/5/2 corresponding to
new Survey Nos.82/5B, 82/5D, 48/C, 86/5/6, 86/5/9 and 86/5/12,
thereby conveying an area admeasuring 2960 sq. mtrs., for a
consideration of Rs.9,11,000/-. On 19 April 2008 the successors in
interest of Bendya executed a conveyance in respect of old Survey
Nos.116/1B, 116/1C, 117/3(P), 123/3, 123/9, 125/3, 126/6B,
211/18 and 212/18, corresponding to new Survey Nos.59/1B,
59/1C, 75/3P, 80/3, 80/9, 82/3, 82/6B, 46/18, 46/8 conveying
thereby an area admeasuring 14520 sq. mtrs, for a total
consideration of Rs.45,74,000/-.
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35. In the context of the controversy at hand, it would be
contextually relevant to note that under mutation entry No.959
dated 24 December 1951, original Survey No.116/1A was shown to
be in the possession of Hasha Hira and renumbered as 116/1A.
116/1B was shown in the name of Bendya Hasha and renumbered
as 116/1B. Likewise, 116/1C was shown in the name of Bendya and
renumbered 116/1C. Thus, the successors in title of Hasha
executed a conveyance dated 18 March 1987 in respect of Survey
No.116/1A in favour of Defendant No.2 and under a conveyance
dated 19 April 2008, the successors in interest of Bendya
transferred the lands inter alia, bearing Survey Nos.116/1B and
116/1C, corresponding to new Survey Nos.591B and 59/1C (the suit
property).
36. Before adverting to consider the import of aforesaid
conveyances from the perspective of the manner in which the
parties exercised the proprietary rights over the lands shown in the
names of their respective predecessors in title, it may be expedient
to note the manner how Vithu dealt with the properties mutated in
his name, during his life time. ULC order dated 26 November 1987
passed under Section 8(4) of the Urban Lands (Ceiling and
Regulation) Act, 1976, indicates that Vithu had made a declaration
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under Section 6(1) of the said Act in respect of Survey
No.233/5/12, 233/5/9, 233/5/6, 252/6, 77/3/C and Gaothan area.
Upon verification and inquiry, Vithu was found to be holding the
lands bearing Survey nos.77/3C, 95/21, 233/5/6, 233/5/9,
233/5/12, 125/5B, 125/5/D, 213/1/C and Gaothan area. Notice was
issued to Vithu under Section 8(3) of the said Act, 1976. Dhanaji V.
Bhoir, Vithabai Bhoir, Devkibai Patil and Savitribai S. Patil were
stated to be the shareholders. Eventually, the competent authority
declared that Vithu was not a surplus land holder and the
proceedings was dropped.
37. What is conspicuous by its absence in the declaration made
by Vithu under Section 6(1) and the order passed by the competent
authority, even post inquiry, is that Survey No.116 or Survey
No.116/1A, 116/1B, 116/1C were neither claimed by Vithu nor
found by the competent authority to be the holding of Vithu.
38. Conversely, the order dated 21 August 1987 passed by the
competent authority under Section 8(4) of the said Act, indicates
that Atmaram Hasha Bhoir, successor in title of Hasha had declared
Survey No.116/1A admeasuring 22H in the Return filed under
Section 6(1) of the Act, 1976. All the persons who are shown as the
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successors in title of Hasha, in the said order, have executed
conveyance. Eventually, after noting the legal representatives of
Hasha and their entitlement to hold the land, the competent
authority declared that the declarant was not the surplus holder
and dropped the proceedings. All the legal representatives of Hasha
who were shown in the said order, joined the other legal heirs of
Hasha to execute a conveyance in respect of the very same Survey
No.116/1A in favour of Defendant No.2.
39. Likewise, the successors in interest of Bendya in the return
filed under section 6(1) of the ULC Act, 1971 declared Survey No.
116/1B and 116/1C, amongst other lands, as their holdings. The
order dated 28th March, 2021 passed under section 8(4) of the ULC
Act, 1971, evidences the said fact.
40. Prima facie, it appears that during the life time of Vithu, the
latter had not asserted the proprietary title over Survey No.116/1A
and, conversely, the legal representatives of Hasha in whose name
Survey No.116/1A was shown in mutation Entry No.959 and the
legal representatives of Bendya in whose name Survey No. 116/1B
and 116/1C were shown in ME No. 959 asserted such title and
orders came to be passed under Section 8(4) of the Act, 1976.
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41. It is imperative to note that the lands transferred by the
successors in title under the conveyance dated 25 February 2008
bearing old Survey Nos.125/5B, 125/5D, 213/1C, 233/5/6, 233/5/9,
233/5/2 were all mutated in the name of Vithu in mutation entry
No.959. Prima facie, it appears that the survey numbers which
were mutated in the name of Vithu were either declared by Vithu
under Section 6(1) of the Act, 1976 or found in his name during the
course of inquiry and, eventually, all those lands were conveyed by
the successors in interest of Vithu in favour of Defendant No.1.
42. Coupled with the aforesaid rather incontrovertible record, the
absence of material to show that Vithu, during his life time, and the
Plaintiffs, after the demise of Vithu, had ever cultivated the suit
property bears upon the issue. Secondly, a number of mutation
entries were effected in the intervening period, starting from the
year 1966, which the Plaintiffs claimed, were fraudulently effected.
Indisputably, mutation entries do not confer title. However, the
conduct of Vithu, during his lifetime, and his successors in interest
in not asserting title to old S.No.116 all these years, and at this
stage, there being not a shred of material to indicate that Vithu or
his successors in interest ever cultivated the suit property, lends
heft to the submission on behalf of Defendant Nos.1 and 2 that the
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parties had acted upon mutation Entry No.959 and exercised
ownership rights over those properties mutated in their respective
names.
43. On the second count of ostensible ownership, Mr. Dani,
learned Senior Advocate for the Plaintiffs strenuously submitted
that to successfully make out a defence under Section 41 of the
Transfer of Property Act, a person has to show that he took the
property from the original holder, but the holder executed a sale
deed on behalf of and signed by a person holding the record.
Defendant Nos.1 and 2 have not asserted in the written statement
that they acquired the property from the real owners.
44. To bolster up this submission, Mr. Dani placed reliance on the
decision of the Supreme Court in the case of Suraj Rattan Thirani
and Ors. V/s. Azamabad Tea Co. Ltd. and Ors. 1, a decision of Nagpur
High Court in the case of Nainsukhdas Sheonarayan V/s.
Gowardhandas Bindrabandas and Ors.2 and a decision of Bombay
High Court in the case of Khushalchand Bhagchand V/s. Trimbak
Ramchandra and Ors.3
1 AIR 1965 SC 295
2 AIR 1948 Nagpur 110
3 AIR 1947 Bombay 49
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45. In the case of Suraj Rattan Thirani and Ors. (supra), the
Supreme Court enunciated that 'in order that Section 41 of the
Transfer of Property Act could be attracted, the transferee of co-
sharers should prove that the transferor was the ostensible owner
of the property with the consent of his co-sharers and besides that
they took reasonable care to ascertain whether the transferor had
the power to make a transfer of the full interest.
46. In the case of Nainsukhdas Sheonarayan (supra), a Division
Bench of the Nagpur High Court, after referring to the previous
pronouncements, enunciated that the object of Section 41 of the Act
was to protect the bonafide transferee for good consideration who
has made proper enquiries from being prejudiced by the conduct,
however innocent, of the real owner in allowing the world at large to
think that someone else is the owner of the property and that it was
immaterial that the attestation was made in ignorance of his rights.
It was emphasized that the proviso to Section 41 enjoined duty on
the transferee to take reasonable care to ascertain that the
transferor had power to make the transfer, and the transferee acted
in good faith.
47. Following the aforesaid pronouncement, in the case of
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Khushalchand Bhagchand (supra), it was held that Section 41 is an
exception to the general rule that a person cannot convey a better
title than what he himself has in the property, and hence the
conditions set forth in that section must be strictly fulfilled before
its benefit can be made available to the transferee. Those conditions
are : (1) that with the consent, express or implied, of the person
claiming title that another person is held out as the ostensible
owner of such property, (2) that such ostensible owner transfers it
for valuable consideration, and (3) that the transferee has acted in
good faith and has taken reasonable care to ascertain that the
transferor has power to make the transfer. Mr. Dani would urge
that none of the aforesaid conditions have been fulfilled.
48. In opposition to this, Mr. Samdani placed reliance on the
decisions of the Supreme Court in the cases of V. Chandrasekaran
and Anr. vs. Administrative Office and Others4; Hardev Singh vs.
Gurmail Singh5; Crystal Developers vs. Asha Lata Ghosh6. In the
case of Crystal Developers (supra) the import of the provisions
contained in section 41 of the Transfer of Property Act was
expounded as under:-
57] In the case of Gurbaksh Singh v. Nikka Singh &
4 (2012) 12 SCC 133.
5 (2007) 2 SCC 404.
6 (2005) 9 SCC 375.
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another reported in [AIR 1963 SC 1917] it has been
held that section 41 is an exception to the general rule
that a person cannot confer a better title than what he
has. Being an exception the onus is on the transferee
to show that the transferor was the ostensible owner of
the property and that the transferee had after taking
reasonable care to ascertain that the transferor had
power to transfer, acted in good faith.
58] In the case of Seshumull M. Shah v. Sayed Abdul
Rashid & others reported in [AIR 1991 Karnataka
273], it has been held that in every case, where a
transferee for valuable consideration seeks protection
under section 41 of the Transfer of Property Act, the
transferee must show that the real owner had
permitted the apparent owner either by express
words, consent or conduct to transfer the property in
favour of the transferee. In other words, it must be
shown that with the consent of the true owner, the
ostensible owner was able to represent himself as the
owner of the property to the purchaser for value
without notice.
49. In the facts of the case, at this stage, a determinative finding
on the question as to whether the predecessors in title of defendant
Nos. 1 and 2 executed the conveyances as the ostensible owners of
the suit property is neither permissible nor possible. However, the
conditions of the transfer being for consideration and the defendant
Nos. 1 and 2 having taken reasonable care to ascertain that their
predecessor in title had the power to transfer and acquired the
property in good faith can be said to have been prima facie fulfilled.
The defendant Nos. 1 and 2 prima facie appear to be bonafide
purchasers for valuable consideration as the record pertaining to
the subject property for over 70 years does not show the trace of
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title in Vithu, save and except the Sale Deed of the year 1938 which
undoubtedly commands value being registered instrument. But the
subsequent dealings with the properties and conduct of the parties,
prima facie, gives an impression of Vithu and his successors not
being the owners of the suit property. In the circumstances, the
aspect of the predecessor in title of defendant Nos. 1 and 2 being the
ostensible owner of the suit property deserves adjudication at the
trial post evidence.
50. The aspect of conduct of the parties in not approaching the
Court for an equitable relief of injunction is required to be
appreciated in the light of the averment in the plaint that the
plaintiffs were cultivating the suit land since certification of
Mutation entry No. 644 pursuant to Sale Deed dated 21 st December,
1938.
51. As noted above, under Mutation entry No. 959, old Survey No.
116 came to be mutated in the name of Bendya Bhoir and Hasha
Bhoir. The mutation entries continued on those lines all along. It is
the claim of the plaintiffs that they had stopped cultivating the suit
land few years prior to the institution of the suit. Prima facie, there
is no material to indicate the cultivation of the suit property by the
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plaintiffs and defendant No. 72. Such a long cultivation exceeding
60 years must have been evidenced by documents showing actual
cultivation by the plaintiff. It also does not stand to reason that over
a half century, the plaintiffs and their predecessors in title would
not have had the occasion to verify the entries in the record of
rights of the suit property. The assertion in the plaint that the
plaintiffs learnt about the fraudulent mutation of the names of the
vendors of defendant Nos. 1 and 2 when their title was questioned,
was thus required to be accepted with a pinch of salt.
52. There is another facet which bears on the knowledge of the
plaintiffs about the infraction of their stated rights. It could not be
controverted that the defendant Nos. 1 and 2 have been developing
project since the year 2014. An endeavour was, however, made to
assert that the plaintiffs had known that the defendant Nos. 1 and 2
were developing the project but those developments were in the
adjoining lands. Implied in this assertion is an admission about the
development potential of the suit property. It, therefore, defies
comprehension that such a valuable land with development
potential would have remained unattended for years together.
53. The aforesaid facts assume significance in determining the
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elements of balance of convenience and irreparable loss. The trial
Court was alive to this position and indeed noted that the plaintiffs
maintained silence for over 70 years. If a person does not exercise
his rights over the property and allows the other to develop that
property to a substantial extent, then equities intervene. Creation
of third party interests is often an inevitable consequence. The
aspect of delay and laches is required to be considered through this
prism.
54. There is material to indicate that the defendant Nos. 1 and 2
have started development by amalgamating various holdings. A
restraint to develop the particular portion of the property in such a
project may have the consequence of destroying the very unity and
integrity of the project. The learned Judge justifiably declined to
restrain the defendant Nos. 1 and 2 from carrying out further
construction. That would have entailed the consequence of stalling
the entire project. The grievance of the defendant Nos. 1 and 2 is
that the restraint to create third party interest is equally onerous.
Whether the impugned order is justifiable or deserves to be modified
to mould equitable relief is the moot question ?
55. Two competing interests deserve consideration. One, the
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assertion of the plaintiffs that once the Court finds that the title
vests in the plaintiff, there could be no interference with the
incidence of ownership and possession of the plaintiffs over the suit
property. Second, the contention of the defendants No.1 and 2 that
the plaintiffs by their conduct have dis-entitled themselves from
equitable relief since the defendant Nos. 1 and 2 have carried out
substantial development and construction over the suit property
from the year 2014 onwards and the defendant Nos. 1 and 2 as well
as the transferees would suffer grave prejudice in the event of
restraint over creation of third party rights.
56. I have noted the circumstances which obtained. Ex facie there
is material to show that the defendant Nos. 1 and 2 have been
developing the lands including the subject property since the year
2014. It is the claim of defendant Nos. 1 and 2 that they have
amalgamated various plots and the integrity of the project as a
whole would be destroyed if restraint to transfer the units
constructed over the subject property is ordered. Conversely it is,
prima facie, difficult to readily accede to the contention of the
plaintiffs that they did not seek enforcement of their rights qua the
subject property, as the defendant Nos. 1 and 2 were developing
adjacent lands and they approached the authorities upon noticing
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that the defendant Nos. 1 and 2 committed encroachment over the
subject property. Pertinently, the portions of the land which the
plaintiffs had conveyed to the defendant Nos. 1 vide Deed of
Conveyance dated 25th February, 2008 were also part of the
integrated development. The plaintiffs thus must have been put on
guard. I am, therefore, inclined to hold that the attendant
circumstances render it inconceivable that the plaintiff had no
inkling of the suit property being part of the integrated
development.
57. Mr. Dani, learned senior advocate for the plaintiff,
strenuously urged that to allow the defendant Nos. 1 and 2 to
complete the construction over the suit property and also create
third party rights therein would amount to putting a premium on
illegality and permit the defendant Nos. 1 and 2 to take advantage
of their own wrong. There are no equities in favour of defendant
Nos. 1 and 2. Mr. Dani, submitted that according to the plaintiff, the
appellants are constructing only wing D and E in the suit property.
Therefore, the restraint does not operate onerously as claimed by
defendant Nos. 1 and 2.
58. The defendant No. 1 has submitted a list of the transferees
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and allottees in High Land Spring A, B and C being developed by the
defendants over the subject lands and it is submitted that the
defendants and appellants have executed 287 residential units and
30 shops. In addition, allotment of 34 residential units and 9 shops
have also been made. Prima facie, it appears that the project has
reached an advanced stage. Where a party entitled to raise the
dispute allows the development to take place by not raising the
grievances at an opportunate time, the Court can not lose sight of
the fact that substantial development has taken place. If a party
chooses not to approach the Court and seek interim reliefs at an
opportunate time, the inaction and delay operate to its peril. With
the passage of time invariably third party rights are created and
equities intervene. This fact must also weigh with the Court in
deciding an application for interim relief in the nature of stay to the
development or on creation of third party rights.
59. As noted above, the trial Court was also alive to these
considerations and chose not to prohibit the defendants from
carrying out the construction but thought it appropriate to restrain
the defendants from creating third party rights.
60. I find substance in the submissions of Mr. Samdani, learned
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Senior Advocate that in the facts of the case the restraint on
transfer also operates onerously. One, the unity of the project gets
disturbed if the defendants No. 1 and 2 are prohibited from
transferring the units, despite full development. Two, the capital
which the defendants No. 1 and 2 would invest to build the
structures would remain locked. Three, since third party rights in
respect of more than 240 prospective purchasers have already
been created by execution of registered instruments as claimed by
the defendant No. 1, the interest of the third parties would also be
jeopardized. Four, a restraint on transfer of units till the disposal of
the suit would bring in its trail the element of vicissitudes of
litigation as the disposal of the suit may take time.
61. A useful reference in this context can be made to the decision
of the Supreme Court in the case of ECE Industries Limited Vs. S. P.
Real Estate Developers Pvt Ltd and Others7
26. It is well settled that when construction has
been made on a land, which is of considerable
magnitude, and when the plaintiff shall not face
any substantial injury, if no order of injunction is
granted because of payment/deposit of the entire
amount payable by the defendant to the plaintiff
under the Agreement, though belatedly, we are of
the view that the Court will not, as a matter of
course, pass an order of injunction against the
other party restraining the other party from raising
any construction on the suit property till the
disposal of the suit.
7 (2009) 12 SCC 776.
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27. If ultimately, the suit filed by the plaintiff-
appellant is decreed, he can be compensated in
damages or the defendants/respondents may be
directed to pull down the construction and deliver
vacant possession to the plaintiff/appellant when no
equity can be claimed for such construction by the
respondent-defendants".
62. In the facts of the case, in my considered view, the balance of
convenience tilts in favour of defendant Nos. 1 and 2 on account of
the conduct of the parties, attendant circumstances the substantial
development and imminent potentiality of prejudice to the third
parties. At the same time, I find substance in the submission of Mr.
Dani that the plaintiffs cannot be presented with a fait accomplli
and left in the lurch. An exercise of balancing equities is thus
warranted. The interest of the plaintiffs is also required to be
adequately protected keeping in view the possibility that eventually
the plaintiffs may succeed.
63. To address this concern, the appellants-defendants were
called upon to state as to how best they propose to secure the
interest of the plaintiffs. Mr. Samdani, submitted that ready
reckoner rate of the suit property was Rs. 37,500/- per sq. mtr.
(2022). A two BHK built up unit commanded a price of 1.9 Crore. In
my view, the plaintiffs interest deserves to be protected in such a
manner that in the event they succeed, the security which the
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Court may obtain from the defendants does not turn out to be
inadequate and illusory. Undoubtedly, the Court would be justified in
passing an appropriate order of demolition of the structures as
indicated in the case of ECE Industries (supra). Yet, the likely
alternative relief, which the Court may grant must also be, in a
sense, efficacious. The area of land comes to around 3760 sq. mtr.
The value of the subject land on the basis of the ready reckoner rate
Rs. 37,500/-, as indicated by Mr. Samdani, would come to Rs.
14,10,00,000/-. It is common knowledge, the ready reckoner rate
does not represent the market value, in all situations. Potentiality
of development also needs to be factored in.
64. Having regard to the entire gamut of the circumstances, in my
view, it may be appropriate to obtain security in the sum of Rs. 21
Crores. In addition, it needs to be clarified that the defendants No. 1
and 2 shall not be entitled to claim any equities whatsoever on
account of creation of third party rights. It is also necessary to cast
an obligation on the defendant Nos. 1 and 2 to specifically apprise
the prospective transferrees about the pendency of the suit and
that the orders passed therein. Such a disclosure will ensure that
the transferees would be in a position to take an informed decision
and their interest would not be jeopardized.
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65. The conspectus of the aforesaid consideration is that the
impugned order to the extent it restrains the defendant Nos. 1 and
2 from creating third party interest in the suit property, deserves
to be quashed and set aside subject to the defendant Nos. 1 and 2
furnishing adequate security.
66. Resultantly, the appeals preferred by defendant No.1, being
Appeal From Order No. 241 of 2023, and defendant No. 2, being
Appeal From Order No. 444 of 2023, deserve to be partly allowed
and the appeal preferred by the plaintiffs is liable to be dismissed.
Hence, the following order.
ORDER
1] The Appeal From Order (St.) No.10020 OF 2023 filed by the
plaintiffs stands dismissed.
2] The Appeal From Order No. 241 of 2023 filed by defendant No. 1/
appellant and Appeal From Order No. 444 of 2023 filed by
defendant No. 2/appellant are partly allowed.
3] The impugned order restraining the defendant Nos. 1 and 2 from
creating third party interest in the suit properties, stands quashed
and set aside subject to the following conditions:
(i) The defendant Nos. 1 and 2 shall furnish a bank guarantee of a
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nationalized bank in the sum of Rs. 21 Crores to the satisfaction of
the trial Court, within a period of two months.
(ii) Defendant Nos. 1 and 2 shall shall not claim any equities on
account of development and creation of third party interests in the
suit property.
(iii) The defendant Nos. 1 and 2 shall also file an undertaking before
the trial Court to the effect that they will make a specific disclosure
to the prospective transferees about the pendency of the suit and
the orders passed therein, including this order.
4] It is clarified that in the event of default to fulfill the above
conditions, within the aforesaid period, this order shall stand
vacated and the order passed by the trial Court shall continue to
operate till the disposal of the suit.
5] By way of abundant caution, it is further clarified that till the
fulfillment of all the above conditions, the impugned order shall
continue to operate.
6] The hearing of suit stands expedited.
7] The parties shall bear their respective costs.
(N. J. JAMADAR, J.)
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