Reshma Estates Private Limited vs Shri.Shivangi Shanker ...
2023 Latest Caselaw 9612 Bom

                                                                       FA-859-2019.doc
2023:BHC-AS:27193

                    Shailaja


                               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                       CIVIL APPELLATE JURISDICTION
                                        FIRST APPEAL NO.859 OF 2019

                    Reshma Estates Private Limited             ]
                    A Company incorporated under               ]
                    The Companies Act, having its              ]
                    Registered Office at Flat No.16,           ]
                    Krishna Mahal, Marine Drive,               ]
                    Mumbai - 400 020.                          ]     Appellant
                                                               (Original Defendant)
                               Versus

                    1)         Shivangi Shanker                ]
                               Shri Ashwini Shanker            ]

                    2)         Awini Ambuj Shanker S/o.        ]
                               Shri Bhawani Shanker            ]
                               Aged - 30 years,                ]
                               Both Indians residing at        ]
                                            th
                               Flat No.24, 7 Floor,            ]
                               Krishna Mahal, 63,              ]
                               Marine Drive, Mumbai - 400 020. ]       Respondents
                                                                   (Original Plaintiffs)

                                                   .....
                    Mr. Cherag Balsara a/w Mr. Akshay Doctor, Mr. Aman Arora, Mr.
                    Suyash Bartake i/b Desai and Diwanji, for Appellant.

                    Mr. Ranjit A. Thorat, Senior Advocate a/w Mr. Dharam Sharma a/w
                    Ms. Uma Sharma a/w Ms. Pratibha Shelake i/b Dharam & Co., for
                    Respondent.
                                                   .....

                                        CORAM         : PRITHVIRAJ K. CHAVAN, J.
                                        RESERVED ON   : 31st AUGUST, 2023.
                                        PRONOUNCED ON : 13th SEPTEMBER, 2023.




                                                                                         1 of 30
                                                 FA-859-2019.doc




JUDGMENT:

1. The appellant - Reshma Estates Private Limited is the original

defendant. Feeling aggrieved with the impugned judgment and

decree passed by the City Civil Court, Mumbai on 7 th December,

2018 in Suit No.7566 of 2003, it has preferred this appeal.

2. The trial Court had directed the appellant to execute a sale

deed of Flat No.24, 7th floor, Krishna Mahal, 63, Marine Drive,

Mumbai - 400 020 (for short "suit flat") by making compliance of

clause 4 (c) by transferring class-A and Class-B shares of Articles of

Agreement dated 25th September, 1986 on or before 31st March,

2019 in favour of the respondents. The Court below, inter alia,

permanently restrained the appellant from transferring, selling,

alienating, parting with possession of the suit flat and/or the land

beneath it to any third person.

3. A few facts germane for disposal of the appeal are as follows.

4. A suit for declaration and specific performance of agreement

dated 25th September, 1986 executed by the appellant in favour of

2 of 30 FA-859-2019.doc

the respondents has been filed in respect of the suit flat. Appellant is

a company incorporated under the Companies Act. It owns and

possesses a property comprising of two plots of land bearing Nos.

63 of Block No.1 of Backbay Reclamation Estate of the then

Government of Bombay. Two plots admeasure 5079 and 2065

square yards respectively. A building known as "Krishna Mahal" is

standing over a plot of land bearing No.1738. Plots bearing CTS

No.1738 and 1729 are two different plots. The building "Krishna

Mahal" as well as two plots shall be referred to as "Suit Property".

5. "Krishna Mahal" originally consisted of ground plus five

floors comprising of residential flats which were let out on tenancy

basis to various tenants.

6. Somewhere in the year 1980, the appellant with the consent

of then tenants of the building undertook extension to the said

building by raising two more floors thereon. Since the appellant was

in dire need of finance to complete the proposed construction of

two additional floors about which the respondents came to know

and, therefore, approached the appellant. The respondents

expressed their desire to acquire one of the flats of the appellant on

3 of 30 FA-859-2019.doc

the proposed 7th floor of the said building which is flat No.24 (suit

flat). It was agreed between the appellant and the respondents that

7th floor flat would be given on tenancy basis upon respondents

advancing construction loan of Rs.7,50,000/- to the appellant.

Admittedly, an amount of Rs.7,50,000/- was paid by the

respondents to the appellant as a loan amount on the interest @

4% per annum. In consideration thereof, appellant had granted

monthly tenancy of the suit flat to respondent No.1 upon the terms

and conditions reduced into writing in an agreement dated 6 th

February, 1985.

7. Appellant paid interest @ Rs.21,906.85 paise. The

respondents have been in exclusive possession of the suit flat. They

have been paying agreed rent to the appellant.

8. In the month of September, 1986, appellant approached the

respondents and offered them to make and recognize themselves as

absolute owners of the suit flat upon payment of Rs.3,00,000/-. The

offer was accepted and accordingly an amount of Rs.3,00,000/- was

paid to the appellant towards purchase price of the suit flat, inter

alia, directing the appellant to adjust purchase price in construction

4 of 30 FA-859-2019.doc

loan amount of Rs.7,50,000/-. An agreement was entered into

between the parties on 25th September, 1986, thereby recognizing

the respondents as absolute owners of the suit flat. The appellant

agreed and assured the respondents to execute a sale deed qua the

suit flat on completion of the construction work of the additional

floors. Since the date of execution of articles of agreement dated

25th September, 1986, the respondents have made inquiries with the

appellant on several occasions as regards execution of the sale deed

of the suit flat, however, it is contended that the appellant

postponed execution of sale deed on various grounds such as non

receipt of completion certificate by BMC etc.

9. On 13th February, 1996, appellant approached the

respondents with a typed agreement that they received entire

consideration of Rs.3,00,000/- from the respondents for their

confirmation. The typed agreement was signed by two Directors of

the appellant viz: Ajit Zaveri and Ashwin Shah who assured the

respondents that by the end of 1996, they would receive the

completion certificate and thereafter sale deed would be executed in

their favour.

5 of 30 FA-859-2019.doc

10. Meanwhile, the respondents were served with writ of summons

along with a copy of plaint and a copy of draft notice of Motion in

S.C Suit No.3155 of 2003 filed by one B.R. Mahadevia, one of the

tenants in the said building against the appellant and the respondents

along with several other persons for specific performance of

agreement. From the copy of the said plaint, the respondents realized

that the appellant had entered into similar agreement with the then

tenants of the building agreeing to convert the tenancy rights of their

flats into ownership. A copy of an affidavit of Mr. Ashwin Shah -

Director of the appellant which was sworn on 13 th August, 2003 was

received by the respondents in the month of September, 2003. It was

revealed that the appellant had denied execution of articles of

agreement dated 25th September, 1986. The respondents realized the

attitude and intention of the appellant of not honouring the terms of

articles of agreement. According to the respondents, they have always

been and are still ready and willing to perform their part of agreement.

The terms and conditions of the agreement are binding upon the

appellant.

11. As the respondents had learnt that the appellant is

contemplating to transfer, sell or alienate the first and second plot

along with the building to a builder, they filed a suit.

6 of 30 FA-859-2019.doc

12. The appellant in the written statement contended that the suit

is hopelessly barred by limitation. It is further contended that the

respondents have suppressed material facts. The appellant had

already furnished documents being the scheme passed by the

appellant on 6th February, 2003 under which it is stipulated that the

appellant's Directors would be allotted certain shares qua the suit

flat and as such, the Directors are the owners of the suit flat and

entitled to deal with the same. The respondents are aware of the

said scheme.

13. The plaint, according to the appellant, does not disclose any

cause of action. It is averred in the written statement that in view of

the negotiations in the past several years, the Directors of the

appellant viz Ashwin Shah and Ajit Zaveri expressed willingness to

implement the agreement dated 25 th September, 1986. The

appellant had already formulated the scheme for reclassification of

the share capital and issue of share dedicated to the designated

assets of the appellant to facilitate the transfer of such shares so

designated qua the respective assets. As per clause 4 (c) of the

agreement, appellant was entitled to formulate such a scheme which

has been formulated. Under the said scheme, specific shareholding

7 of 30 FA-859-2019.doc

has been created in favour of only shareholders and directors. Under

the said scheme, Ashwin Shah has been allotted shares of Class-B for

Flat No.24, Share Certificate No. B 1413 to B 1417. Under the said

scheme, qua the suit flat, Ajit Zaveri has been allotted Share of

Class-B, Share Certificate No.B 161-165.

14. Directors had advised the respondents in the meeting that

they were willing to transfer shares of Class-B and that the

respondents are not entitled for issuance of Class-A shares. Thus,

the respondents have been insisting upon performance of an

agreement not covered under the suit agreement or the said

scheme. The appellant has, therefore, denied to comply with the

demands made by the respondents beyond the terms of the scheme.

15. According to the appellant, the scheme was framed and

submitted to the Registrar of Companies vide an application in

Form No.23 dated 6th February, 2003 and ultimately it was filed in

the Registrar of the Companies on 31 st March, 2003. The appellant

claimed exclusive rights to the terrace of flats on 6 th and 8th floor by

contending that none of the tenants Co-operative Society/Apartment

Owners Association or Tenants Association shall have or entitled to

8 of 30 FA-859-2019.doc

claim or rights save as may be permitted by the landlords except for

visiting the terraces on 6th and 8th floors for inspecting water tanks,

lift room and for installation or removal of T.V Antennas or for

repairs thereof.

16. The appellant further contended that the respondents are not

entitled to claim benefit of class-A shares. It is contended that all

other tenants who had filed the suits have already accepted the said

scheme and became members of the appellant by holding class-B

shares. Some of the original tenants who became owners of their

respective flats have already dealt with their flats in favour of third

party. The appellant contended that it is ready and willing to issue

class-B shares to the respondents. As such, the appellant prayed for

dismissal of the suit.

17. The trial Court framed issues as regards agreement dated 25 th

September, 1986 in respect of the suit flat as to whether the

respondents were ready and willing to perform their part of

contract and answered it in the affirmative. The Court below had

answered the issue of limitation in the affirmative and decreed the

suit as above.

9 of 30 FA-859-2019.doc

18. I heard Mr. Balsara, learned Counsel for the appellant and

Mr. Thorat learned Senior Counsel for the respondents at length. I

have also perused the synopsis of written arguments on behalf of the

respondents.

19. Mr. Balsara has tendered list of dates and events in the form

of a chart along with notes of submissions. According to Mr.

Balsara, primarily only 4 important issues are involved in this

appeal. They are;

(a) Whether the trial Court has re-written terms of the

contract between the parties?

(b) Whether directions contained in the impugned

decree travel beyond the case in the plaint and the prayers

sought?

(c) Whether the suit was barred by limitation in view of

Article-54 of the Limitation Act, 1963?

(d) The scheme which is already implemented and

accepted by all other tenants can be questioned by the

respondents?

10 of 30 FA-859-2019.doc

20. Mr. Balsara would invite my attention to an agreement dated

25th September, 1986, especially clause 4 (c) therein which provides

transferring shares of the landlords (Reshma Estate) in favour of the

tenants and making such tenants shareholders of the landlords

(Reshma Estate) in such of the number of shares as are required per

flat so as to divest the existing shareholding in the landlords in

favour of the Tenants and/or such other persons who may wish to

acquire the shares of the landlords (Reshma Estate).

21. Mr. Balsara would maintain that owners retain dominion over

certain parts and the respondents are restricted to their portion/part

of ownership. They do not come at par with the owners.

Admittedly, there are 24 flats in "Krishna Mahal" building. Out of

the 24 flats, 21 flat holders have been allotted class-B shares,

whereas, three flat holders have been allotted class-A shares. The

Counsel would argue that there is neither pleading nor prayer in the

plaint as regards offering class-B shares to the respondents in the

year 1986 itself. The respondents have not created any charge over

the suit flat in view of clause 16 of the agreement dated 6 th February,

1985. Since the document is unregistered, it does not create any

right in favour of the respondents.

11 of 30 FA-859-2019.doc

22. On the other hand, Mr. Thorat, learned Senior Counsel for

the respondents took me through the evidence of the respondents as

well as cross-examination of the appellant. According to him, the

suit is well within limitation as the scheme is dated 31 st March, 2003

and the suit came to be filed on 6th December, 2003. Learned

Senior Counsel drew my attention to the tenancy agreement dated

6th February, 1985 by contending that the same is different from the

agreement of 1986. According to him, loan had been advanced to

the appellant by keeping charge over the property. From the recitals

of 1986 agreement, intention was to convey flats including land as

well as common areas and amenities. He would also argue that the

suit was well within limitation since the scheme itself came into

force in the year 2003. Cause of action first arose on 13 th August,

2003 when one Mr. B.R. Mahadevia filed S.C. Suit No.3155 of

2003 wherein respondents were parties. The learned Senior

Counsel, therefore, would argue that the trial Court has correctly

appreciated the facts and evidence on record by reaching a correct

conclusion in decreeing the suit.

23. The most vital documentary evidence in this case is Articles of

Agreement dated 25th September, 1986 (for short "1986

12 of 30 FA-859-2019.doc

Agreement") between the parties on the basis of which respondents'

claim a specific performance of agreement.

24. It would be essential to go through the recitals of 1986

agreement in order to ascertain the real intention of the parties and

what had been, in fact, agreed between them qua the suit flat.

Importantly, neither party disputed recitals of the agreement.

25. A bare look at the averments in the plaint would reveal that

the respondents understood and accepted the fact that they are,

under the agreement, merely entitled to the suit flat alone and not

the land underneath "Krishna Mahal" building. Interestingly, the

plaint is silent in respect of the scheme or bifurcation of shares as

Class A and Class B, although P.W.1 - Bhavani Shanker in his cross-

examination candidly admitted discussion with the appellant qua

the scheme in the year 1996 itself. This material fact appears to

have been suppressed by the respondents as regards allotment of

class-B shares to them. I will go into the aspect of the scheme in the

later part of the judgment.

13 of 30 FA-859-2019.doc

26. It would be essential to go through the evidence adduced by

the respective parties before the trial Court.

27. P.W.1 - Bhavani Shanker is the Power of Attorney Holder of

the respondents who had tendered an affidavit in lieu of

examination-in-chief. Apart from reiterating what has been stated

in the plaint, interestingly, he even deposed that the appellant in it's

written statement at point No.10 (V) averred that they are ready

and willing to issue Class-B shares to the respondents in respect of

the suit flat making them, thereby, owners of the suit flat.

28. There are several vital admissions on material aspects elicited

during the cross-examination of P.W.1 - Bhavani Shanker. Before

considering the admissions in the cross-examination, it would be

apposite to extract relevant clauses of the agreement which would

make the factual and legal position clear.

29. Undisputedly, the appellant is the owner and in possession of

the property comprising of two adjoining plots as stated

hereinabove. "Krishna Mahal" building is standing on Plot No.1738

comprised of ground plus five floors containing residential flats

14 of 30 FA-859-2019.doc

which were let out on tenancy basis to various tenants. Plot

No.1729 (P) was a vacant plot of land reserved for Reshma Estate

for it's enjoyment. Admittedly, Reshma Estate (Appellant), with the

consent of the tenants, decided to undertake an extension of the

building by adding two more floors thereon, thereby proposing to

construct 6th and 7th floor. Pursuant to an agreement between the

appellant and the respondents dated 6 th February, 1985, tenancy in

respect of Flat No.24, (suit flat) 7 th floor of Krishna Mahal was

created in favour of the respondents.

30. Now, turning to the agreement dated 25 th September, 1986

"1986 Agreement". Important clauses of the said agreement are

extracted below.

"1. The Landlords hereby agree to make the Tenant a full and absolute Owner of his Tenament being Flat No.24 on 7th floor in the said building Krishna Mahal on the Tenant agreeing to pay to the Landlords.

        (a)       a sum of Rs.3,00,000/- being the purchase
        price of the said Tenament and

        (b)      on the tenant agreeing to becoming a
        member           of          the         Cooperative

society/Company/Apartment Owners Association as may be formed at the instance of the Landlords for the purpose of conveying the said land and building and

15 of 30 FA-859-2019.doc

(c) further agreeing to abide by the Rules and Regulations of such Cooperative society/Company/Apartment Owners Association as may be framed for the maintenance and management of the said building Krishna Mahal;

2. Upon the Tenant becoming the Owner of the said Flat, he shall be entitled to deal with or dispose of the same in such manner as he pleases subject to such Rules of such Cooperative society/Company/Apartment Owners Association as may be framed.

4. The landlords agree that they shall convey the respective flats to the respective Tenants including the Tenant herein by making them full and absolute owners thereof under any of the following scheme as set out hereinbelow:

(a) By forming a Cooperative Society of the Tenants occupiers and conveying the land and building to such Cooperative Society and making the Tenant occupier a member of such Society entitled to shares in respect of such flats as may be issued by such Cooperative Society upon formation.

(b) By submitting the said property under the Apartment Owners' Act, 1970 by executing a Declaration in the prescribed form and thereafter executing Deeds of Apartment in favour of such of the Tenants who wish to join in as a Member of such Association of Apartment Owners or condomonium whereafter such member shall enjoy such rights and as owners of their respective Apartment as are provided under the said Maharashtra Apartment of Owners'

16 of 30 FA-859-2019.doc

Act, 1970 and bound to follow the Rules as may be framed by condomonium.

(c) By transferring shares of the Landlords in favour of the Tenants and making such Tenants, shareholders of the Landlords in such of the number of shares as are required per flat so as to divest the existing share-holding in the Landlords in favour of the Tenants and/or such other persons who may wish to acquire the shares of the landlords.

5. It is expressly agreed and recorded that under any of the above schemes for converting the said flats of tenements into ownership, the Landlords reserve to themselves,

(a) exclusive rights to the terrace both on the 6 th and 8th floors and in which none of the tenants Cooperative Society/Apartment Owners Association or Association shall have or entitled to claim any rights save as may be permitted by the Landlords except for vising the Terraces on 6th and 8th floors for inspecting the water tanks or the lift room or for installation or removal of T.V Antennas or for repairs thereof.

(b) the exclusive rights of enjoyment of the adjoining plot of the Landlords shown on the plan annexed hereto and shown thereon by green colour wash to be kept open to sky and unbuilt upon and to be maintained as a garden or for such other purposes as the Landlords may deem fit and none of the Tenants including the Tenant herein shall claim any interest therein including a right to park a vehicle or otherwise howsoever and the landlords shall be entitled to fence out the said open and unbuilt open area to prevent access to other Tenants.

                                                           17 of 30
                                                 FA-859-2019.doc


         6.(a)    The Landlords shall in the compound

surrounding the said building provide such number of car parking spaces as is feasible for the benefit of the Tenants.

(b) The said car parking space would be numbered and would be allotted by rotation on the terms and conditions imposed by the landlords, and such rotation and allotment shall be carried out on an annual basis.

(c) Any taxes that may become payable on account thereof shall be the exclusive responsibility of the Tenant/allottee of such Car parking space.

7. The other common areas of the building will be Meter room, Pump room, Stair case, landings, chowk and the compound excepting the portion reserved for the Landlords".

31. It is explicit from the recitals of the agreement that Reshma

Estate reserved it's rights to select one of the aforesaid three

modalities set out in clause (4).

32. Turning back to the cross-examination of P.W.1 - Bhavani

Shanker. When his attention was drawn to clause 4(a), 4(b) and 4(c)

of the agreement - Exhibit 21, he has unequivocally admitted that

as per the said 1986 agreement, he was required to acquire absolute

ownership in respect of Flat No.24 as per the scheme set out in the

18 of 30 FA-859-2019.doc

aforesaid clauses, more particularly, his admission that the

appellants/landlords had obtained to implement scheme as set out in

clause 4 (c) of the agreement, put his case to rest.

33. P.W.1- Bhavani Shanker, in his cross-examination, further

admits that he had seen the scheme. It was drafted pursuant to

clause - 4(c) of Exhibit 21. He had duly understood the terms of the

said scheme. His cross-examination further reveals that in his

evidence in R.A.D Suit No.1022 of 2010 in the Small Causes Court,

it has come that he was required to acquire class-B shares under the

scheme. He admits that he had given the said admission in the cross-

examination before the Court of Small Causes at Mumbai (Exhibit

22). He further admits that the Directors viz; Ashwin Shah and Ajit

Zaveri agreed and were willing to implement terms of the

agreement dated 25th September, 1986 as per the scheme. He again

reiterates in the cross-examination that as per the scheme, only

Class-B shares were required to be allotted and transferred in his

name. The cross also reveals that he came to know about allotment

of class-B shares in the year 1996 itself.

19 of 30 FA-859-2019.doc

34. The record reveals that the scheme was submitted to the

Registrar of Companies on 31 st March, 2003 vide an application in

Form No.23 dated 6th February, 2003. It is evident from the

explanatory statement under section 173 (2) of the Companies Act,

1956 which is annexed to the scheme and was placed before the

trial Court, the holders of Class-B equity shares would have

ownership rights only on the flat or garage or open to sky parking

space. As already stated, structure of the scheme was in accordance

with the terms of the agreement. Respondents were only restricted

to the absolute ownership qua the suit flat. They are not entitled to

any share in the land or the building standing thereon. The scheme

even contemplates that Class-A equity shares of the appellant

include right to vote, dividend and right to distribution of surplus

assets on winding up of the appellant. Class-A shares were in respect

of the internal functioning of the appellant and had no relevance

with the suit flat.

35. There is a clear admission of P.W.1 - Bhavani Shanker in the

cross-examination that Class-B shares were offered to him by the

appellant in the year 1996 itself and not Class-A shares. Why did he

not take steps to challenge the scheme or raised any objection in

20 of 30 FA-859-2019.doc

that regard in 1996 itself or soon thereafter? The respondents are,

therefore, estopped from raising the same sans any pleadings. They

are trying to seek relief qua class - A shares in camouflage. It is

essentially a case of estoppel in view of deed of agreement dated

25th September, 1986, especially clause (c) of the said agreement.

Rule of estoppel by deed applies only between parties and privies,

and only in actions on the deed. No estoppel arises upon recitals or

descriptions which are either immaterial or not intended to bind.

No estoppel arises where the deed is tainted by fraud or illegality.

The respondents herein are trying to seek relief of Class-A shares in

camouflage, as already stated hereinabove, which cannot be

permitted to be raised in view of the evidence on record, especially,

vital admissions elicited in the cross-examination of P.W.1-Shanker

Bhavani. In light of the above, it is evident that cause of action for

the purpose of seeking an entitlement to Class-A shares arose as far

back as in the year 1996 when it was informed to the respondents

that they are only entitled to class-B shares and not class-A shares

and no class-A shares were offered to them.

36. Relief in respect of class-A shares as sought to be claimed

now is, therefore, time barred on the date of filing of the suit. It is

21 of 30 FA-859-2019.doc

apparent that in order to bring the suit within limitation, the

respondents relied on S.C Suit No.3155 of 2003 filed by one Mr.

R.B. Mahadevia to contend that cause of action arose pursuant to an

affidavit sworn by the Directors of appellant on 13 th August, 2003.

The respondents cannot be heard to say that cause of action arose

for the first time pursuant to a proceeding in S.C. Suit No.3155 of

2003 filed by one Mr. B.R. Mahadevia.

37. The trial Court has committed a grave error in observing that

the suit was within limitation by completely ignoring the admission

given by P.W.1 - Bhavani Shanker in the cross-examination as stated

above as well as the fact that the plaint restricted only to ownership

rights to the flat alone sans any averment as regards the land and

common amenities in the said building. There is absolutely nothing

in the plaint indicating claim of the respondents qua class-A shares.

To claim class-A shares, despite having knowledge in the year 1996

itself exhibits malice in law and fact. The trial Court misread and

misinterpreted not only the evidence on record but also recitals of

1986 agreement by observing that there was no evidence of oral

negotiations and meetings about class-A and class-B shares. The trial

Court had, therefore, committed patent illegality in directing the

22 of 30 FA-859-2019.doc

appellant to transfer class-A and class-B shares in the impugned

decree. In view of Article 54 of the Limitation Act, a suit is to be

filed within three years if date is fixed for the performance or when

the plaintiff has notice that performance is refused. Relief sought in

the plaint is only to the extent of seeking performance of 1986

agreement which was restricted to the flat. The suit is, therefore,

barred by limitation. I am afraid, I cannot buy arguments of learned

Senior Counsel Mr. Thorat that the cause of action arose for the

first time on 13th August, 2003 in view of the aforesaid facts.

38. As already stated hereinabove, in view of clause 4 (c) of 1986

agreement, the appellants-landlords reserved a right of transferring

shares in favour of the tenants and making such tenants

shareholders of the landlords in such of the number of shares as are

required per flat so as to divest the existing shareholding in the

landlords in favour of the tenants and/or such other person who

may wish to acquire the shares of the landlords.

39. From the recitals of the agreement, it is explicit that right to

choose from the aforesaid options was solely with the appellant

which appears to have been accepted by 21 out of 24 flats holders in

23 of 30 FA-859-2019.doc

the said building. The appellant had, therefore, rightly exercised it's

prerogative to transfer shares in favour of the respondents and other

tenants under clause 4(c) of 1986 agreement.

40. The trial Court travelled beyond the scope of the averments

and evidence on record by granting relief in view of clauses (2) and

(3) of the operative part of the impugned judgment and decree. The

respondents even could not have been entitled to seek relief of

perpetual injunction in respect of building and land since the rights

under 1986 agreement were limited only to the extent of suit flat

and not in respect of the land beneath the said building.

41. Learned Counsel for the appellant has, therefore, rightly

placed a useful reliance on a judgment of the Supreme Court in case

of Shree Ambica Medical Stores and others Vs. Surat People's Co-

operative Bank Limited and others, (2020) 13 Supreme Court Cases

564. It is held by the Supreme Court:

"The Court while interpreting the contract of insurance must interpret the words of the contract by giving effect to the meaning and intent which emerges from the terms of the agreement. In interpreting documents relating to a contract of insurance, the duty of the court

24 of 30 FA-859-2019.doc

is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however, reasonable, if the parties have not made it themselves. The court through its interpretative process cannot rewrite or create a new contract between the parties. The court has to simply apply the terms and conditions of the agreement as agreed between the parties"

(emphasis supplied)

42. It is apparent that the Court below has re-written the terms of

1986 agreement instead of interpreting the words in which the

parties to the contract expressed their intentions. The Court cannot

make a new contract, however, reasonable, if the parties have not

made it themselves. The trial Court has, therefore, clearly created

something new which was never intended by the parties in 1986

agreement.

43. Law as regards scope of pleadings is no more res integra.

There are several authoritative pronouncements on this aspect.

Pleadings are meant to give to each side intimation of the case of the

other so that it may be met, to enable courts to determine what is

really at issue between the parties. If there is no prayer for a

particular relief and no pleadings to support such a relief, and when

the defendant has no opportunity to resist or oppose such a relief, if

25 of 30 FA-859-2019.doc

the court considers and grants such a relief, it would lead to

miscarriage of justice, which has been, in fact, has occurred in the

case at hand.

44. The Hon'ble Supreme Court in case of Bacchaj Nahar Vs.

Nilima Mandal and another, (2008) 17 SCC, 491 has observed thus;

"12. The object and purpose of pleadings and issues is to ensure that the litigants come to trial with all issues clearly defined and to prevent cases being expanded or grounds being shifted during trial. Its object is also to ensure that each side is fully alive to the questions that are likely to be raised or considered so that they may have an opportunity of placing the relevant evidence appropriate to the issues before the court for its consideration. This Court has repeatedly held that the pleadings are meant to give to each side intimation of the case of the other so that it may be met, to enable courts to determine what is really at issue between the parties, and to prevent any deviation from the course which litigation on particular causes must take.

13. The object of issues is to identify from the pleadings the questions or points required to be decided by the courts so as to enable parties to let in evidence thereon. When the facts necessary to make out a particular claim, or to seek a particular relief, are not found in the plaint, the court cannot focus the attention of the parties, or its own attention on

26 of 30 FA-859-2019.doc

that claim or relief, by framing an appropriate issue. As a result the defendant does not get an opportunity to place the facts and contentions necessary to repudiate or challenge such a claim or relief. Therefore, the court cannot, on finding that the plaintiff has not made out the case put forth by him, grant some other relief. The question before a court is not whether there is some material on the basis of which some relief can be granted. The question is whether any relief can be granted, when the defendant had no opportunity to show that the relief proposed by the court could not be granted. When there is no prayer for a particular relief and no pleadings to support such a relief, and when the defendant has no opportunity to resist or oppose such a relief, if the court considers and grants such a relief, it will lead to miscarriage of justice. Thus it is said that no amount of evidence, on a plea that is not put forward in the pleadings, can be looked into to grant any relief ".

45. This is a classic case wherein the trial Court, sans pleadings

and prayer granted reliefs resulting into miscarriage of justice.

46. Turning to the tenancy agreement dated 6 th February, 1985 as

emphasized by the Senior Counsel. Clauses 9 and 16 of the said

agreement are extracted below;

"9. It has been agreed that the amount of the aforesaid construction loan shall be a charge

27 of 30 FA-859-2019.doc

on the entire new construction of the said building and the entire interest of the Landlord in the land to which the said building is wedded proportionately/rateably according to the proportion that the amount of such loan advanced by the Tenant bears to the total loan by such other persons and the documents evidencing creating the charge will be prepared when the entire loan is advanced by the Tenant.

16. The necessary document creating charge on the said building and land shall be executed on receiving the full payment of the construction loan by the Landlord in the manner aforestated".

47. Though there is an averment in the plaint about the said

agreement, it is pertinent to note that a photo copy of the said

agreement was filed and not the original. There is no averment in

the plaint as regards clauses 9 and 16 as stated hereinabove. There

is no pleading in respect of execution of a document/deed creating a

charge on the building and land against the construction on loan.

No charge has been created over the property. Section 17 (1) (b) of

the Registration Act provides the documents which are compulsorily

registrable. Clause (1) (b) of Section 17 reads thus;

"17. Documents of which registration is compulsory- (1) The following documents shall be registered, if the property to which they

28 of 30 FA-859-2019.doc

relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877, or this Act came or comes into force, namely:-

(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property.

48. Admittedly, document dated 6th February, 1985 is an

unregistered document. The said document in itself would not

create, declare, assign any right, title or interest in respect of the

property in question. No charge has been created by any other

document over the property and, therefore, there is no question of

creating or assigning any right in respect of the property in question

qua the respondents. Argument of the learned Senior Counsel for

the respondents, therefore, cannot be accepted.

49. The impugned judgment and decree, therefore, warrants

interference in appeal. The same is modified as under;

29 of 30 FA-859-2019.doc

(a) The suit stands decreed with costs.

(b) The appellant/defendant shall execute

sale deed in respect of the suit flat in view of

clause 4 (c) of the agreement dated 25 th

September, 1986 by transferring class-B shares in

favour of the respondents within eight weeks.

50. The appeal stands disposed of in the aforesaid terms.

[PRITHVIRAJ K. CHAVAN, J.]

Signed by: Shailaja Halkude Designation: PA To Honourable Judge 30 of 30 Date: 15/09/2023 11:11:55