Usha Batra vs M/S Ombir Creation Private ...
2018 Latest Caselaw 5928 Del

     IN THE HIGH COURT OF DELHI AT NEW DELHI
                 Judgment reserved on: September 27, 2018
                 Judgment delivered on: October 01, 2018

+    FAO(OS) 216/2017

     USHA BATRA                                          ..... Appellant
                            Through:    Mr. Akshay Makhija with Ms. Seerat
                                        Deep Singh & Mr. Ankit, Advs.

                   versus

     M/S OMBIR CREATION PRIVATE LIMITED
     & ORS                                     ..... Respondents
                  Through: Mr. A.K. Singla, Sr. Adv. with
                            Mr. Rajesh Bansal, Mr. Vijay K.
                            Gupta, Mr. Amit Khemka &
                            Mrs. Ritu Bansal, Advs.
     CORAM:
     HON'BLE THE CHIEF JUSTICE
     HON'BLE MR. JUSTICE V. KAMESWAR RAO

                              JUDGMENT

V. KAMESWAR RAO, J

1. The appellants who are the legal heirs of the defendant

no.3 in CS (OS) 650/2008 have preferred this intra-court appeal

against the order dated 6th July, 2017 passed by the learned

Single Judge, on the ground the learned Single Judge had denied

them the right of preemption and directed them and the

representative of the respondent No.1 to be present in the court to

facilitate inter se bidding, if required.

2. Some of the relevant facts are that on 7th April, 2008, a

Suit for Partition of property bearing no. 43-A, Rajpur Road,

Civil Lines, Delhi - 54 measuring 1400 Sq. Yds. was filed by

respondent no.4 Sh. Girdhari Lal Batra. On 10 th July, 2015, a

preliminary decree was passed holding the shares of the plaintiff

and defendants 1 to 3 as under:

        (a)    Girdhari Lal Batra
               Plaintiff in the suit / respondent no.4
               herein 1/3rd share

        (b)    Krishan Lal Batra
               Defendant No.1 in the suit /
               Respondent No.3 herein 2/9th share

        (c)    Bihari Lal Batra
               Defendant No.2 in the suit /
               Respondent No. 3 herein 2/9th share

        (d)    Anil Kumar Batra (through LRs).
               Defendant No.3 in the suit / Appellants
               herein 2/9th share.

3. On 29th May, 2016, defendant no.3 namely Anil Kumar

Batra passed away. The legal heirs of defendant no.3 the

appellants herein have been impleaded as parties before the court.

It is averred by the appellants that a legal notice purporting to be

a caveat was received by them from respondent no.1 M/s. Ombir

Creation Pvt. Ltd. on 6th December, 2016.

4. It is their case that they were not aware of the pendency

of the Suit. It was only after they received a legal notice

purporting to be a caveat dated 3rd December, 2016, that they got

alerted. On enquiries from their uncle, it came to their

knowledge that the Suit for Partition is pending before this court

and that they (uncles) had entered into some transaction with M/s.

Ombir Creation Pvt. Ltd., respondent no.1 herein. It is their case

that details of the transactions entered into by the respondent nos.

2 to 4 (their uncles) with respondent no.1 were not divulged to

them. In fact, respondent nos. 2 to 4 in order to defraud them had

failed to bring them on record even though they are the legal

heirs of Late Anil Kumar Batra upon his demise on 29th May,

2016. It was on 4th January, 2017, the appellants filed an IA

being 186/2017 under Order XXII Rule 4 CPC. The IA was

allowed in terms of the following order:

"(ii) Vide the same order dated 10th July, 2015, it was further directed that the interim order earlier in force restraining the parties from alienating, encumbering or parting with possession of the property No.43-A, Rajpur Road, Civil Lines, Delhi110054 though shall continue but shall not come in the way of the plaintiff, defendant no.1 and defendant no.2, if agree to sell the property to any buyer, selling the property.

(iii) The counsel for the plaintiff, defendant no.1 and defendant no.2 state that they have sold the portions of the property in their respective possession to M/s Ombir Creations Pvt. Ltd.

(iv) Though the plaintiff, defendant no.1 and the defendant

no.2, in my opinion, under the order dated 10th July, 2015 could not have done so without involving the defendant no.3 and if at all could have sold their share as identified in the preliminary decree and not the portions in their possession but the fact remains that today the said M/s Ombir Creations Pvt. Ltd. has become the owner of the remaining 7/9th share in the property i.e. besides the 2/9th share of the legal heirs of the defendant no.3.

(v) It is informed that the legal heirs of defendant no.3 are also in possession of a portion of the property.

5. The counsel for the said M/s Ombir Creations Pvt. Ltd. appears and states that an opportunity be given to M/s Ombir Creations Pvt. Ltd. to negotiate with the legal heirs of the defendant no.3 also.

6. Till further orders, the legal heirs of defendant no.3 as well as the said M/s Ombir Creations Pvt. Ltd. who is now substituted in this suit in place of plaintiff, the defendant no.1 and defendant no.2, are directed to maintain status quo qua title, construction and possession of the property."

5. The order reveals that a representation was made by the

counsel for the respondent nos. 2 to 4 herein (plaintiff, defendant

no.1 and defendant no.2) that they have sold the portions of the

property in their respective possession to M/s. Ombir Creation

Pvt. Ltd./ respondent no.1 to the extent of 7/9th share in the

property, i.e., their share, leaving 2/9th share of the defendant

no.3, late Anil Kumar Batra. From the order, it also transpires

that M/s. Ombir Creation Pvt. Ltd. has been substituted in the suit

in place of respondent nos. 2 to 4 (plaintiff, defendant no.1 and

defendant no.2). It appears that IA No. 7335/2017 was filed by

M/s. Ombir Creation Pvt. Ltd. with the following prayers and it is

in this application, the impugned order has been passed by the

learned Single Judge.

"In the facts and circumstances of the case mentioned above, it is therefore, most respectfully prayed that:

a) by invoking the inherent powers of the Court under Section 151 of the Code of Civil Procedure, 1908 appropriate directions be issued to Defendant No. 3 to transfer his 2/9th share in the suit property bearing No. 43A, Rajpur Road, Civil Lines, Delhi and a final decree be passed in accordance with law.

b) A Local Commissioner be appointed to determine and demarcate the exact area owned by (LR's of Defendant No.3, i.e., 2/9th share in the suit property bearing No.43A, Rajpur Road, Civil Lines, Delhi and to determine the value thereof;

c) LRs of Defendant No.3 be directed that after execution of the Sale Deed in favour of the Applicant Company, to hand over peaceful vacant possession of the same to the Applicant Company.

d) the stay order dated 21st February, 2017 directing the status quo title, construction and possession of the property by this Hon'ble Court may be recalled in the facts and circumstances of the case and in the interest of justice; and

e) to pass such other order and orders as to which this Hon'ble Court may deem fit and proper in the interests of justice."

6. It is the submission of Mr. Akshay Makhija, learned

counsel appearing for the appellants that the learned Single Judge

has not given an opportunity to the appellants to file their

response to the application. That apart, the impugned order has

been passed without giving an opportunity to the appellants to

invoke their right of preemption under Section 4 of the Partition

Act, 1893. According to the him, the conclusion of the learned

Single Judge that the appellants should have invoked their right

under Section 4 of the Partition Act, if any, between the period

10th July, 2015 to 21st February, 2017 is clearly erroneous as at

the most, the right of the appellants to invoke Section 4 had

accrued only when the appellants filed an application under Order

XXII Rule 4 CPC, i.e., on 14th January, 2017, and not before that.

He contended, that the appellants were not in the knowledge of

the pendency of the suit before this court. That apart, the right

under section 4 of the Partition Act comes into play only when

the share of the dwelling house belonging to undivided family

has been transferred to a person, who is not a member of such

family. That apart it is also his submission that the right to

invoke Section 4 of the Partition Act accrued to the appellants

herein when M/s. Ombir Creation Pvt. Ltd., respondent no.1, not

part of the family, requested for partition by metes and bounds by

means of an application, being I.A. 7335/2017 and it continues

till the decree is passed and the same is executed. Mr. Makhija

has submitted that the impugned order hurts the appellants as the

learned Single Judge even though has stated "However, in the

facts and circumstances of this case, legal heirs of defendant no.3

are permitted to come up with an offer within two weeks to

purchase the share of applicant - Ombir Creations Limited at

market rate", but in the subsequent paragraph has stated "Let

authorized representative of applicant and the legal heirs of

deceased defendant no.3 be present in the court on the next date

of hearing to facilitate inter se bidding, if required". According

to him, the aforesaid conclusions of the learned Single Judge are

contradictory. In any case, it is his submission that the later part

of the order could not have been passed as long as the right of the

appellants herein under Section 4 of the Partition Act subsist.

Mr. Makhija has relied upon the judgment of the Supreme Court

in the case of Ghantesher Ghosh v. Madan Mohan Ghosh and

Ors. (1996) 11 SCC 446 in support of his submissions.

7. On the other hand, Mr. A.K. Singla, learned

Sr. Counsel appearing for the M/s. Ombir Creation Pvt. Ltd. /

respondent no.1 stated that appellants do not have the right to

invoke Section 4 the Partition Act, 1893 inasmuch as the partition

had already taken place in terms of the award rendered by the

sole Arbitrator Mr. Gurdayal Batra on 5th December, 1985 with

regard to the property in question. According to him, the award

was made rule of the court, as such the same has attained finality

between the parties. He draws our attention to the plaint in

CS(OS) 650/2018 with regard to his submission that the relief

was only with regard to partition of the property by metes and

bounds. He has also drawn our attention to the contents of the

written statement filed by Late Anil Kumar Batra wherein in

reply on merits to Paras 7 and 8 of the plaint, the following has

been stated:

"that the contents paras 7 and 8 of the plaint reproducing some portions of the said award are not denied. However, it is submitted that said award cannot be enforced as is being sought to be enforced. It is further submitted that parties are enjoying their respective shares in the aforesaid property."

8. According to him, even the predecessor in interest of

the appellants Late Anil Kumar Batra had conceded to the fact

that the partition has been effected and the parties are enjoying

their respective shares in the aforesaid property. According to

him, learned Single Judge was right in concluding that the right

of the appellants to invoke Section 4 of the Partition Act, 1894

subsisted between the dates 10th July, 2015 till 21st February,

2017. He also stated, the appellants, even when their right

subsisted, were not appearing before the court for the reasons best

known to them. He justified the order passed by the learned

Single Judge calling upon the appellants to participate in the inter

se bidding, if required.

9. Having heard the learned counsel for the parties, the

issue which falls for our consideration is in a very narrow

compass, that is whether the learned Single Judge could have

denied the appellants the right under Section 4 of the Partition

Act, 1893 by passing the following order: -

"However, in the facts and circumstances of this case, legal heirs of defendant no.3 are permitted to come up with an offer within two weeks to purchase the share of applicant - Ombir Creations Limited at market rate".

Let authorized representative of applicant and the legal heirs of deceased defendant no.3 be present in the court on the next date of hearing to facilitate inter se bidding, if required".

10. The plea of Mr. Makhija was that even though the

learned Single Judge has permitted the appellants who are the

legal heirs of defendant no.3 to come up with an offer within two

weeks to purchase the share of applicant M/s. Ombir Creation

Pvt. Ltd., the same has been nullified in the later part of the order,

as reproduced above, by observing "to facilitate inter se bidding".

This according to him, amounts to denial of the benefit of Section

4 of the Partition Act. The plea of the learned counsel for the

respondent no.1 is that the award by which the partition has been

effected has attained finality as the share of each of the parties,

including the predecessor in interest of the appellants had been

determined by the Sole Arbitrator, which in other words depicts

that property has been divided and no application under Section 4

shall lie.

11. Mr. Makhija is justified in relying upon the judgment of

the Supreme Court in Ghantesher Ghosh (supra), wherein the

Supreme Court was concerned with the case, wherein the facts

were, the premises in question which was a residential house

owned by one Kalipada Ghosh and on his death his three

surviving sons became owners of 1/3rd share each. On 7th

September, 1948, one of the sons Kamal Krishna died leaving

behind him his widow Smt Radha Rani. Thus, she inherited 1/3rd

undivided share of her husband in the said dwelling house. On

the coming into operation of the Hindu Succession Act, 1956,

Smt Radha Rani became the full owner of 1/3rd share of her

deceased husband in the said house. She filed a suit for partition

on 5th September, 1960 claiming separation of her 1/3rd share in

the said house amongst other properties. A preliminary decree

was passed in favour of Smt Radha Rani on 31st August, 1971.

Accordingly, she became entitled to partition and separation of

her 1/3rd share in the said dwelling house. She made an abortive

attempt to get the final decree executed but therein she did not get

any relief of actual possession for a number of years. In the

meanwhile, on 8th October, 1979 she executed and got registered

a gift deed in favour of her brother, the appellant before the

Supreme Court gifting 1/3rd undivided interest in the said

dwelling house as decreed to her pursuant to the final decree for

partition. Armed with that gift deed the appellant-donee, who

obviously was a stranger to the joint family, filed execution

petition on 14th December, 1981 for executing the final decree

obtained by his predecessor-in-interest, namely, the Smt. Radha

Rani. Pending the execution proceedings taken out by the

appellant-donee, one of the judgment-debtors Pran Krishna,

original first defendant died in July 1983. In his place, his son

Respondent 1, Madan Mohan Ghosh was brought on record

before the Supreme Court as his legal heir in the execution

proceedings. The executing court by its order dated 17 th January,

1985 issued a writ of possession by appointing a Pleader

Commissioner to undertake the task of suggesting partition of the

suit house by metes and bounds. Then in September 1985,

pending the execution proceedings original judgment-debtor

defendant no. 2 Gaur Mohan died. It appears that thereafter the

real contest remained between the appellant on the one hand and

Respondent 1 on the other. Respondent No. 1 filed an application

on 12th December, 1986 before the executing court under Section

4 of the Act for enforcing his claim of pre-emption against the

appellant-stranger transferee of 1/3rd undivided interest of the

original title-holder Smt. Radha Rani. The executing court by its

order dated 13th August, 1987 dismissed the said application of

respondent 1 on the ground that the said application was not

maintainable, after the final decree was passed in the partition

suit. The said view of the executing court was not approved by

the Division Bench of the Calcutta High Court in the revision

application. They took the view that the said petition under the

Act was maintainable as still the final decree had not got fully

executed and satisfied by actual division of the property by metes

and bounds and delivery of actual possession to the stranger

transferee who had taken out the execution proceedings. By its

order dated 17th December, 1990, the High Court directed the

executing court to dispose of the application of respondent 1

under Section 4 of the Act on merits with a further direction to

complete the said proceedings within six months.

12. The issue before the Supreme Court was whether Section

4 can be validly pressed into service by any of the co-owners of

the dwelling house belonging to the undivided family at the stage

of execution of the final decree. The issue was answered in the

affirmative by the Supreme Court and in Paras 15 and 17, it held

as under:

"15. In Boto Krishna Ghose v. Akhoy Kumar Ghose [AIR 1950 Cal 111 : 54 CWN 660] , it was held by another Division Bench of the Calcutta High Court that a dwelling house of an undivided family has a linkage with the dwelling house which belongs to the family and which is not divided and that such dwelling house may be owned by members of such family who need not be joint in mess and that house itself should be undivided amongst the members of the family who are its owners. The emphasis is really on the undivided character of the house, and it is this attribute of the house which imparts to the family its character of an undivided family. For the members of the family may have partitioned all their other joint properties and may have separated in mess and worship, but they would still be an undivided family in relation to the dwelling house so long as they have not divided it amongst themselves. In this connection, it has been further observed as follows:

"If in this state of things a member of the family transfers his share in the dwelling house to a stranger, the position that arises is that para 2 of Section 44, T.P.

Act comes into operation and the transferee does not become entitled to joint possession or other common or part enjoyment of the house, although he would have the right to enforce a partition of his share. The object of this provision is to prevent the intrusion of strangers into the family residence which is allowed to be possessed and enjoyed by the members of the family alone in spite of the transfer of a share to a stranger. The factual position then is that it is still an undivided dwelling house, the possession and enjoyment of which are confined to the members of the family, the stranger transferee being debarred by law from exercising his right to joint possession which is one of the main incidents of co-ownership of property. Such a dwelling house can in our opinion still be looked upon as a dwelling house belonging to an undivided family, because the members of the family have not divided it amongst themselves and are in sole enjoyment and possession of it to the exclusion of the stranger transferee who has only a right to partition. And so long as the dwelling house has not been completely alienated to strangers as was the case in Vaman Vishnu Gokhale v. Vasudeo Morbhat Kale [ILR 23 Bom 73] , successive transfers by other co-sharer members of the family do not alter the factual position in this respect, because the remaining member or members of the family have the right to hold exclusive possession to the exclusion of the stranger alienees. So long as that situation lasts, the dwelling house, in our opinion, continues to be a dwelling house belonging to an undivided family."

The aforesaid decision also shows that so long as decree for partition of a family dwelling house does not get fully executed and the shares of co-owners do not get separated by metes and bounds and the co-owners are not put in actual possession of their respective shares, the dwelling house remains to be common dwelling house of joint family and so long as that attribute remains, Section 4 would continue to be attracted. (emphasis supplied). We may now deal with the decision of the Division Bench of the Patna

High Court which has also directly spoken on the point. In Harendra Nath Mukharjee v. Shyam Sunder Kuer [AIR 1973 Pat 142 : 1973 Pat LJR 20] Mukharjee, J., speaking for the court had to consider this very question in the light of the scheme of Section 4 of the Partition Act. It was held that application under Section 4 could be made at any stage of the suit. Simply because an application had been filed after the passing of the final decree, it could not be said that it was not maintainable on the ground that the executing court could not go behind the decree. It was not a case of going behind the decree. It was further observed that the family continued to be undivided qua dwelling house till possession was delivered to the members of the family in execution of the final decree for partition and as such, the application under Section 4 was maintainable after passing of the final decree and before the possession of the dwelling house in question was delivered to the stranger transferee. The aforesaid decisions of the Calcutta High Court in the cases of Satya Narayan Chakravarty [1974 Cal WN 871] and Boto Krishna Ghose [AIR 1950 Cal 111 : 54 CWN 660] as well as the decision of the Division Bench of the Patna High Court in the case of Harendra Nath Mukharjee[AIR 1973 Pat 142 : 1973 Pat LJR 20] lay down the correct legal position.

x x x x

17. As a result of the aforesaid discussion, it must be held that Section 4 of the Act can validly be pressed in service by any of the co-owners of the dwelling house belonging to the undivided family pending the suit for partition till final decree is passed and thereafter even at the stage of execution of the final decree for partition so long as the execution proceedings have not effectively ended and the decree for partition has not been fully executed and satisfied by putting the shareholders in actual possession of their respective shares. Beyond that stage, however, Section 4 will go out of commission."

13. So, in view of the conclusion of the Supreme Court, the

submission of the learned counsel for the respondent no.1 that the

sole Arbitrator having determined the share of each of the parties

to the arbitration and the fact that the predecessor-in-interest of

the appellants had conceded the fact that the parties are enjoying

the respective shares in the aforesaid property would have the

effect of property is divided (not undivided), does not appeal to

this Court for the simple reason that the suit itself encompasses a

prayer for partition of the suit property by metes and bounds,

which means that in terms of the judgment of the Supreme Court

as noted above, the property still remains common to the joint

family and continues to have attributes of a joint family property.

In fact a preliminary decree was passed holding the shares of the

respondents 2 to 4 and the predecessor in interest of the

appellants only on July 10, 2015, in the suit. If we were to accept

the submission made by the learned counsel for respondent no.1,

then there was no occasion for the original plaintiff to file a suit

for partition by metes and bounds. So, the appellants' right under

Section 4 of the Partition Act subsist, which accrued to them only

when Ombir Creation Pvt. Ltd had filed application being IA

7335/2017 i.e. in July, 2017. So the conclusion of the Ld. Single

Judge that the right to preemption could have been exercised by

the appellants between July 10, 2015 till February 21, 2017 is

clearly erroneous both on facts and in view of the law laid down

by the Supreme Court as noted above. We accordingly, set aside

the following observations of the learned Single Judge in the

impugned order:

"Let authorized representative of applicant and the legal heirs of deceased defendant no.3 be present in the court on the next date of hearing to facilitate inter se bidding, if required"

14. The parties shall appear before the learned Single Judge

on October 22, 2018 when the appellants shall come up with an

offer to purchase the share of respondent no.1 M/s. Ombir

Creation Pvt. Ltd. at market rate.

15. The petition stands disposed of. No order as to costs.

CM Nos. 25844/2017, 12461/2018 and 36489/2018

Dismissed as infructuous.

V. KAMESWAR RAO, J

CHIEF JUSTICE

OCTOBER 01, 2018/jg