Bombay High Court
Rajaram Chavan Real Estate Pvt Ltd vs Mohammed Anwar Kutubuddin ... on 12 September, 2023
Bench: Shri Arif Doctor
Digitally signed
LAXMIKANT by LAXMIKANT
2023:BHC-OS:9815-DB
GOPAL
GOPAL CHANDAN
CHANDAN Date: 2023.09.12
17:39:22 +0530
1 (905) COMAPL-20428.23-aw-IAL-20470.23.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL APPEAL (L) No.20428 OF 2023
IN
INTERIM APPLICATION (L) NO.9107 OF 2023
IN
COMMERCIAL SUIT (L) No.8458 OF 2023
Rajaram Chavan Real Estate Pvt. Ltd. ]
having its registered office at 1st floor,]
R.C. House, the Grand Residency ]
Near Sheetal Chinema, LBS Marg ]
Kurla (W), Mumbai 400070 ]
And also another office at 225, ]
Sheetal Cinema Building, LBS Marg ]..... Appellant.
Kurla (W), Mumbai 400070 ] (Orig.Defendant No.7)
Vs.
1] Mohammed Anwar Kutubuddin ]
Siddiqui ]
Age : 56 years, Occ : Business ]
Presently R/at. A/404, Sagar ]
Apartment, Father Peter Pereira ]
Road, Sonapur Lane, Kurla (W) ]
Mumbai 400070 ]
]
2] M/s.Myco Construction Company]
Sole proprietary concern of ]
Mohammed Ali Mohammed Sali ]
having its office at 2nd floor, 228 ]
Daruwala Building Bazar Ward, ]
Kurla (W), Mumbai 400070 ]
]
3] Fatima Nalakath Sahusintavide ]
Wd/o. Mohammed Ali ]
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Mohammed Sali ]
]
4] Shahida Nalakath Sahusintavide ]
D/o. Mohammed Ali ]
Mohammed Sali ]
]
5] Shaziya Nalakath Sahusintavide ]
D/o. Mohammed Ali ]
Mohammed Sali ]
]
6] Saliha Nalakath Sahusintavide ]
D/o. Mohammed Ali ]
Mohammed Sali ]
]
All legal heirs of Mohammed Ali ]
Mohammed Sali, sole proprietor ]
of M/s. Myco Construction ]
nd
Company, 2 floor, 228, ]..... Respondents.
Daruwala Building, Bazar Ward ] (Orig.Plaintiff &
Kurla (W), Mumbai 400070 ] Org.Def.Nos.1 to 6)
WITH
INTERIM APPLICATION (L) NO.20470 OF 2023
IN
COMMERCIAL APPEAL (L) No.20428 OF 2023
IN
INTERIM APPLICATION (L) NO.9107 OF 2023
IN
COMMERCIAL SUIT (L) No.8458 OF 2023
Rajaram Chavan Real Estate
Pvt. Ltd. : Applicant
In the matter between
M/s. Rajaram Chavan Real : Appellant/Applicant
Estate Pvt. Ltd. (Org.Defendant No.7)
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Vs.
Mohammed Anwar Kutubuddin : Respondents.
Siddiqui and ors. (Org.Respondent No.1
& Org.Deft.Nos.1 to 6)
Mr. Simil Purohit a/w Mr. Rishikesh Soni i/by Ashok Purohit & Co.
for the Appellant/Applicant.
Mr. Sharique Nachan a/w Mr. Amaan Khan and Mr. Khurram
Aagboatwala i/by Judicare Law Associates for Respondent No.1.
Mr. E. A. Sasi a/w Ms. Meghna Khatri for Respondent Nos.2 to 6.
Mr. S. K. Dhekale, Court Receiver, present.
CORAM : DEVENDRA KUMAR UPADHYAYA, CJ. &
ARIF S. DOCTOR, J.
Reserved on : 02nd August 2023
Pronounced on : 12th September 2023
JUDGMENT : (PER ARIF S. DOCTOR)
The present Appeal impugns an order dated 20 th July
2023 by which the Learned Single Judge was pleased to grant
the following reliefs in the captioned Interim Application taken
out by Respondent No.1 viz.
"c) Pending the hearing and final disposal
of the above Suit, this Hon'ble Court be
pleased to appoint the Court Receiver, High
Court, Bombay, or any other fit and proper
person as Receiver of the suit flat more
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particularly described in the Schedule
annexed at Exhibit-"A" to the Plaint with all
powers under Order 40 Rule 1 of the Civil
Procedure Code with further directions to
take physical possession of the suit flat;
d) Pending the hearing and final disposal
of the above Suit, this Hon'ble Court be
pleased to appoint the Court Receiver, High
Court, Bombay, or any other fit and proper
person as Receiver of the suit flat more
particularly described in the Schedule
annexed at Exhibit - "A" to the Plaint with all
powers under Order 40 Rule 1 of the Civil
Procedure Code with further directions to
take physical possession of the suit flat and
put the Plaintiff in possession thereof as
Agent of the Court Receiver without payment
of royalty."
2. Before dealing with the rival contentions, it is useful
to give a brief background of the relevant facts so as to give
context to the challenge in the present Appeal.
i. The Appellant is a Developer of land ("Developer").
The predecessor of Respondent Nos. 3 to 6 one
Mohammed Ali Mohammed Sali ("Owner") claimed to
be the Owner of a piece and parcel of land
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admeasuring about 3000 sq. mtrs. together with the
structure standing thereon and known as Daruwala
Chawl ("the said property").
ii. The Owner and Developer had entered into a Joint
Development Agreement ("JDA") dated 20th August
2009 for redevelopment of the said property by
constructing buildings thereon. The JDA inter alia
contemplated that the Developer and the Owner
would each be entitled to 50% of the built-up area of
the newly constructed buildings. It is not in dispute
that thereafter the redevelopment infact took place.
iii. Respondent No. 1 vide a registered Agreement for
Sale dated 5th May 2016 purchased Flat No.104 on the
1st floor, admeasuring 49.24 square meters
(equivalent to roughly around 530 square feet) carpet
area in "A" Wing of the building known as "Orchid
Springs ("the suit flat") from the Owner.
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iv. Thereafter, disputes and differences arose between
the Owner and Developer inter alia in respect of
sixteen flats to which the Owner claimed to be
entitled as being the Owner's share. The Owner
therefore filed a Petition under Section 9 of the
Arbitration Act seeking various interim measures of
protection inter alia in respect of the said sixteen
flats. This Court, by an order dated 26 th May 2017
passed by consent inter alia directed that the parties
would maintain status quo as regards the said sixteen
flats and referred the disputes and differences
between the Developer and the Owner to arbitration.
The orders of status quo in respect of the said sixteen
flats were thereafter continued by the Arbitral
Tribunal.
v. Respondent No.1 along with several other flat
purchasers thereafter filed an Interim Application
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(being Interim Application No.159 of 2021 with
Interim Application No.386 of 2021) seeking review of
the order dated 26th May 2017 to the extent that the
same would not come in the way of the flat
purchasers seeking reliefs qua their flats in
independent proceedings against both Owner and
Developer. This Court by an order dated 17 th March
2022 clarified as follows viz.
"3. .........It is self-evident that the order of
26th May 2017 cannot possibly come in the way
of the Review Petitioners independently
establishing their rights in any proceedings that
they may institute or may have instituted to any
flats. Since the Review Petitioners were not
party to the Section 9 proceeding in the 26 th May
2017 order, they cannot possibly be bound by
any part of it.'
vi Respondent No.1, who had also filed a Petition under
Section 9 of the Arbitration and Conciliation Act, inter
alia seeking possession of the suit flat, then withdrew
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the same with the liberty to file a Suit.
vii. It was thus that Respondent No. 1 filed the captioned
Suit and took out the Interim Application seeking
various interim reliefs in respect of the suit flat. The
Impugned Order was passed in the said Interim
Application. The Developer being aggrieved by the
Impugned Order, has filed the present Appeal.
3. Mr. Purohit, the learned counsel appearing on behalf
of the Developer submitted that the suit flat was one of the
sixteen flats in respect of which the orders of status quo had
been passed and hence the Impugned Order effectively defeated
the orders of status quo. He submitted that the Developer was
in possession of the suit flat and the effect of the Impugned
Order would be to dispossess the Developer from its possession
and that too at the interim stage. He submitted that such an
order therefore could not and ought not to have been passed in
the fact of the present case.
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4. Mr. Purohit then invited our attention to the JDA and
pointed out with particular reference to Clauses (II)(b), (f), (g),
(i) and (o) that in the event of the Owner failing and/or
neglecting to comply with his obligations under the JDA, then
the Developer would be entitled to proportionate area from the
Owner's share so as to compensate the Developer for
discharging the obligations which the Owner was required to
discharge. Mr. Purohit submitted that since the Owner had failed
and neglected to discharge certain obligations under the JDA,
the Developer thus became entitled to appropriate certain area
from the Owner's share. He, therefore, submitted that the suit
flat being one of the 16 flats forming part of the Owner's share
would also be one in respect of which the Developer would be
entitled. He thus submitted that if the Impugned Order was not
set aside, the Developer would be gravely prejudiced since the
area from which the Developer could claim an adjustment would
have dissipated. He thus submitted that the balance of
convenience was overwhelmingly in favour of the Developer.
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5. Mr. Purohit then submitted that the case of
Respondent No. 1 in the Plaint was contrary to what was stated
in the letter dated 20th October 2016. He pointed out that while
the letter dated 20th October 2016 recorded that, Respondent
No. 1 had been put in possession of the suit flat, in the Plaint
Respondent No. 1 had specifically pleaded that possession of the
suit flat was infact never handed over. Basis this, he submitted
that the contention of Respondent No.1 that possession of the
suit flat had been handed over to Respondent No. 1 was ex facie
false. He therefore submitted that possession of the suit flat
ought not to be handed over to Respondent No. 1, and that too
at the interim stage.
6. For all of the aforesaid reasons, he submitted that the
Impugned Order was required to be set aside.
7. Per contra, Mr. Nachan, the learned counsel appearing
on behalf of Respondent No.1, submitted that Respondent No.1
was an innocent third-party purchaser who purchased the suit
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flat from the Owner under a duly registered Agreement for Sale.
He submitted that Respondent No. 1 had nothing to do with the
inter se disputes and differences between the Developer and the
Owner. He submitted that Respondent No.1, despite having
purchased the suit flat under a registered Agreement for Sale
and having taken a home loan, was kept out from use and
occupation of the suit flat to which he was lawfully entitled.
8. Mr. Nachan then submitted that the Developer's claim
to the suit flat was infact a dishonest one for two reasons (i) that
the Developer had expressly given up its claim in respect of the
suit flat and (ii) that the suit flat had been sold by the Owner to
Respondent No. 1 with not only the knowledge but also the
consent of the Developer. He thus submitted that the Developer
infact had no right and could not claim any right of
adjustment/appropriation of area in respect of the suit flat. In
support of his contention that the Developer could not claim
any right and/or adjustment in respect of the Suit flat, he
invited our attention to the letter dated 4th September 2013
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addressed by the Developer to the Owner and pointed out
therefrom that the JDA had specifically been amended by the
said letter. He pointed out from the said letter that the same
provided that (a) the restriction on the Owner as per Clause (ii)
(o) of the JDA was only in respect of 3 flats, and (b) the suit flat
was not one of the three flats and was specifically allotted to the
Owner. Basis this, he submitted that there was no question of
the Developer now claiming that the Developer would be entitled
to the suit flat for an adjustment/appropriation of area under the
JDA.
9. He then invited our attention to the letters dated 23 rd
September 2016 and 20th October 2016 respectively to submit
that the Developer was not only aware of the sale of the suit flat
to Respondent No.1 but had infact specifically acquiesced
thereto. He pointed out that by the letter dated 23 rd September
2016, the Developer had specifically noted the bank's lien in
respect of the suit flat, which recorded that the suit flat was
acquired by Respondent No. 1 from the Owner. Similarly, he
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pointed from the letter dated 20th October 2016, that the
Developer had specifically acknowledged that Respondent No. 1
had been put in quiet, vacant and peaceful possession of the suit
flat, and was granted liberty to own, use, occupy, and possess
the suit flat without interference or disturbance in any manner.
Basis this he submitted that the Developer could not now seek to
resile from either the amendment to the JDA or the consent to
the sale of the Suit flat to Respondent No. 1.
10. Mr. Nachan submitted that the orders of status-quo
relied upon by the Developer were wholly immaterial since they
were passed (a) after the date of the Agreement for Sale and (b)
in the proceedings to which Respondent No. 1 was not a party.
Mr. Nachan then invited our attention to the order dated 17 th
March 2022 and pointed out that the same specifically recorded
that the order dated 26th May 2017 did not bind third party flat
purchasers since they were not parties to the Section 9
proceedings. Given this, he submitted that there was no
question of Respondent No.1 being bound by the orders of
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status-quo.
11. Mr. Nachan then submitted that in the facts of the
present case, the balance of convenience was entirely in favour
of Respondent No.1 and against the Developer. He submitted
that the Developer at the highest could have a money claim
against the Owner and/or the legal heirs of the Owner viz.
Respondent Nos. 2 to 6 which would be decided in the pending
arbitration. He submitted that this Court had in the orders dated
7th March 2019 and 20th July 2023 ("Impugned Order)
specifically observed that the Developers claim was infact a
money claim, which was not challenged by the Developer.
12. Mr. Nachan then placed reliance upon a judgment of
this Court in the case of Mulji Umershi Shah Vs. Paradisia
Builders Pvt. Ltd. and others1 to submit that there was no
impediment put by the Code of Civil Procedure for passing any
order to prevent the ends of justice from being defeated which
included putting a party in possession of a property even at the
1 1997(3) Mh. L.J.532
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interlocutory stage. Mr.Nachan also placed reliance upon a
judgment of the Madras High Court in the case of T.
Krishnaswamy Chetty Vs. Thangavelu Chetty and others 2
to submit that the Court would be well entitled to appoint a
receiver when a person in possession has obtained it through
fraud or force or when the property in question is shown to be
"in medio". In this case he submitted that given the fact that
Respondent No.1's entitlement to the suit flat was based on a
registered Agreement for Sale and the property was lying "in
medio", the appointment of the court receiver was wholly
justified. He also placed reliance upon the Judgment of the
Division Bench of this Court in the case of Mahendra
Mangruram Gupta and anr. Vs. Rajdai Nandlal Shaw and
ors3 in which the Division Bench of this Court has relied upon
the judgment of the Madras High Court in the case of T
Krishnaswamy Chetty.
13. Basis the above, the learned counsel submitted that
the Impugned Order had been correctly passed and thus the
2 1954 SCC OnLine Mad 374
3 Judgment dt.15/06/2022 in Appeal No.83 of 2020.
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Appeal was required to be dismissed.
14. We then heard Mr. Sasi, the learned counsel
appearing on behalf of Respondent Nos. 2 to 6 even though it
was pointed out to us that Respondent Nos. 2 to 6 had remained
unrepresented before the Learned Single Judge. Mr. Sasi
tendered compilation of documents upon which he placed
reliance and essentially supported the submissions made by Mr.
Nachan.
15. We have heard the learned counsel for the parties,
considered the rival submissions as also the documents relied
upon by them. After a careful consideration of the same, we find
that the Appeal is entirely devoid of any merit and must
necessarily be dismissed for the following reasons:-
At the outset, the parameters for grant of interim
reliefs are well settled. The Hon'ble Supreme Court has in the
case of Seema Arshad Zaheer and others Vs. Municipal
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Corporation of Greater Mumbai and others4 had occasioned
to reiterate the essential requirements to be satisfied by a
Plaintiff who seeks interim reliefs as follows viz.:-
"(i) Existence of a prima facie case as pleaded,
necessitating protection of plaintiff's rights by
issue of a temporary injunction;
(ii) When the need for protection of plaintiff's
rights is compared with or weighed against
the need for protection of defendant's right or
likely infringement of defendant's right, the
balance of convenience tilting in favour of
plaintiff; and
(iii) Clear possibility of irreparable injury being
caused to plaintiff if the temporary injunction
is not granted. In addition, temporary
injunction being an equitable relief, the
discretion to grant such relief will be exercised
only when the plaintiff's conduct is free from
blame and he approached the court with clean
hands."
We find that in the present case Respondent No.1 has more than
adequately satisfied the above requirements and thus the
Learned Single Judge has correctly granted the interim reliefs
that have been sought for by Respondent No. 1. Respondent
No.1 has asserted his claim to the ownership of the suit flat
based on a registered Agreement for Sale entered into with the
4 (2006) 5 SCC 282
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Owner. The Agreement for Sale was admittedly executed before
the orders of status quo were passed, which we must note were
passed by consent. Crucially, Respondent No. 1 has relied upon
the letter dated 4th September, 2013 which makes clear that the
Owner is entitled to the suit flat and the JDA was ammended
inter-alia to that extent. Additionally, Respondent No. 1 has
relied upon letters dated 23rd September 2016 and 20th October
2016 which expressly make clear and bring to the notice of the
Developer that the Owner was dealing with the suit flat. There is
no denial to these letters nor did the Developer take any steps
to restrain the Owner from dealing with and/or selling the suit
flat. On the contrary, the Developer has expressly acquiesced to
the same. The Developer's claim, though stated to be one of an
adjustment of area, is really a money claim as already observed
by this Court in the Order dated 7th March 2019 and 20th July
2023 ("Impugned Order) with which we are in agreement. Even
assuming the claim of the Developer is one for area, we must
note that the Developer has not taken any steps for adjudication
of its claim, and it was the Owner who had initiated arbitration.
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Therefore Respondent No. 1 has made out an overwhelmingly
strong prima facie case for the grant of interim reliefs as prayed
for in respect of the suit flat.
16. Additionally, and crucially, the Impugned order is
purely a limited interim order and does not and cannot create
any final right, title, and interest in the suit flat in favour of
Respondent No. 1. The Learned Single Judge has in the said
order made clear and explicit as follows, viz.
"27. It is made clear that the plaintiff
shall enjoy possession of the suit flat only as
an agent of the court receiver without
payment of royalty and subject to further
orders in the present proceedings. By way of
abundant caution, it is further directed that
the plaintiff shall not in any manner deal
with the suit flat or seek to create any third-
party rights on the strength of agreement to
sale dated 5/5/2016, during the pendency of
the suit.
Thus, all that has been done by the Impugned Order is to permit
Respondent No. 1 to occupy the suit flat pending the hearing
and final disposal of the Suit. The Learned Single Judge has after
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considering the facts of the case and weighing the balance of
convenience, passed the Impugned Order. We are in agreement
with the reasons set out by the Learned Judge in concluding that
the balance of convenience in the present case is entirely in
favour of Respondent No. 1.
17. Also, we find the contention of the Developer that the
Developer was in possession of the suit flat and thus ought not
to be dispossessed at the interim stage to be a contention which
is entirely devoid of merit. The Developer could never be in
lawful possession of the suit flat since it is the Developer's own
case that the Developer would be entitled to an adjustment of an
area from the Owner's share on the Owner's failing and/or
neglecting to perform its obligations under the JDA. Thus, it is
incumbent upon the Developer to first establish the defaults on
the part of the Owner before claiming entitlement to the suit flat
or any area forming part of the Owner's share. In the present
case, the Developer has admittedly not established the default
on the part of the Owner which would entitle the Developer to
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proportionate area from the Owner's share. Given this, we find
that what the Developer is effectively attempting to do is to
deprive the Owner of his entire entitlement and claim possession
of inter alia the suit flat based solely upon the Developers
contention that the Owner is in default. We find that this being
the basis of the Developer's claim of possession the same is ex-
facie untenable in law. Even if the possession was infact with the
Developer, such possession is clearly not lawful and therefore
would necessitate appointment of a Court Receiver as has been
held by the Madras High Court in the T. Krishnaswamy Chetty
(supra).
18. We also find no merit in the contention that the
possession of the suit flat cannot at the interim stage be granted
to Respondent No.1. As noted above, the possession or claim of
possession of the suit flat by the Developer is prima facie
unlawful and therefore as held by this Court in the case of Mulji
Umershi Shah (supra) there is no impediment put by the Code
of Civil Procedure for passing any order so as to prevent the
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ends of justice from being defeated which includes putting a
party in possession of a property where sufficient cause is
shown even at the interim stage.
19. Given the above, we find that the learned Single
Judge has correctly exercised his discretion in granting the
limited interim relief in favour Respondent No.1. There is no
merit in the Appeal. The same is accordingly dismissed.
20. In view of dismissal of Appeal, Interim Application (L)
No.20470 of 2023 does not survive and the same is also
accordingly disposed of.
(ARIF S. DOCTOR, J.) (CHIEF JUSTICE)
AFTER PRONOUNCEMENT
At this stage, Mr. Soni, the Learned Counsel appearing
on behalf of the Appellant made a request for stay of the effect
of this Order. Mr. Nachan, the Learned Counsel appearing on
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behalf of Respondent No.1 submitted that he did not have any
objection to the stay being granted, if the same was for a short
period and subject to condition that the Appellant would hand
over possession of the suit flat at the expiration of the stay in
the event the same was not continued either in Appeal or any
other proceedings which the Appellant may file from this Order.
2. In view of the aforesaid, we grant a stay of the
operation of this Order for a period of four weeks from today. On
expiry of four weeks' time, if there is no order by which the stay
is continued, the keys of the suit flat shall be handed over by the
Appellant to the Court Receiver, who shall in turn hand over the
same to Respondent No.1, in terms of the undertaking given to
this Court by the learned counsel for the Appellant.
(ARIF S. DOCTOR, J.) (CHIEF JUSTICE)
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