Narendra Jagannath Varma vs Nalin (Yogesh) Jagannath Varma
2021 Latest Caselaw 1733 Guj

        C/AO/100/2020                                             CAV ORDER




          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

               R/APPEAL FROM ORDER NO. 100 of 2020
                               With
       CIVIL APPLICATION (FOR INTERIM RELIEF) NO. 1 of 2020
              In R/APPEAL FROM ORDER NO. 100 of 2020
==========================================================

NARENDRA JAGANNATH VARMA Versus NALIN (YOGESH) JAGANNATH VARMA ========================================================== Appearance:

MR ANSHIN DESAI, SR. ADVOCATE WITH MR JAY M THAKKAR(6677) for the Appellant(s) No. 1,2 MR DIGANT KAKKAD WITH MR KISHAN Y DAVE(8293) for the

MR DC DAVE, SR. ADVOCATE WITH MR MRUGEN K PUROHIT(1224) for

MR IH SYED, SR. ADVOCATE WITH MR CHIRAG B UPADHYAY(6735) for the Respondent(s) No. 1,2 ========================================================== CORAM: HONOURABLE MR. JUSTICE N.V.ANJARIA

Date : 05/02/2021

CAV ORDER

Heard learned senior advocate Mr.Anshin Desai assisted by learned advocate Mr.Jay Thakkar for the appellants, learned senior advocate Mr.I.H. Syed with learned advocate Mr.Chirag Upadhyay for respondent Nos.1 and 2, learned senior advocate Mr.Dhaval Dave with learned advocate Mr.Mrugen Purohit for respondent No.3, and learned advocate Mr.Digant Kakkad with learned advocate Mr.Kishan Dave for respondent No.4.

2. This Appeal From Order as initially preferred, was against common order dated 19th November, 2019 passed by learned 4th Additional Senior

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Civil Judge, Anand, whereby application Exh.5 and application Exh.35 filed by the appellants-plaintiffs in their Special Civil Suit No.82 of 2018 came to be dismissed. Application Exh.5 was for interim injunction to restrain the respondents-defendants from transferring, alienating or encumbering the suit properties.

2.1 After filing of application Exh.5 on 25th July, 2018 along with the institution of the suit, the plaintiffs moved another application Exh.35 on 02nd August, 2019, styled to be under Section 151 of the Code of Civil Procedure, 1908 wherein the prayer was made to restrain the defendants from constructing and changing nature of the suit property. It was the case for moving such application that despite long passage of time, the defendants except one defendant, did not file their written statement and on the other hand, the construction over the suit property was started in collusion to create new equities.

3. The parties to the suit are family members. Plaintiff Nos.1 and 2 and defendant No.1 are real brothers, defendant No.2 happens to be the wife of defendant No.1 and defendant No.4 is the mother. The suit was instituted on 25th July, 2018 which was for the relief of declaration that registered sale deed dated 09th October, 2017 in favour of defendant No.3 was null and void and not binding to the appellants- plaintiffs. The prayer was made to direct defendant No.3 to execute registered sale deed in favour of plaintiff Nos.1 and 2 for 500 sq. mtrs. of land each

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out of total 1500 sq. mtrs. The partition was claimed of the suit land to the extent of one-third in favour of each brother-the plaintiffs and defendant No.1. In addition to above prayers, damages were also prayed for. A prayer for permanent injunction was also made against the defendants not to transfer or create encumbrance over the suit land.

3.1 As could be gathered from the plaint, the suit property is described in paragraph 2 of the plaint was an open land admeasuring 1500 sq. mtrs. located on the East of 2384 sq. mtrs. land falling on the Southern side of Final Plot No.69 Paiki in Town Planning Scheme No.4 (Anand).

3.2 It is the case of the plaintiffs that defendant No.1 was the elder brother, acting as Karta of the Hindu Undivided Family of the father-husband of defendant No.4. It was stated that out of total 1500 sq. mtrs. of land above, 300 sq. mtrs. of land was sold by its original owner one Miteshbhai Shantilal Patel to defendant No.1 for consideration of Rs.04,90,000/- which was paid by two cheques drawn from the account of Anand Mercantile Co-operative Bank. It is the further case that the remaining 1200 sq. mtrs. of land was agreed to be sold to defendant No.1 for Rs.24,00,000/- and on the same day, that is, 23rd February, 2006, agreement to sell was executed.

3.3 The plaintiffs stated that the agreement to sell in respect of said 1200 sq. mtrs. of land was entered into in the name of defendant No.1 only as he

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was trusted by all, though the purchase was on behalf of the joint family. At the time of execution of the agreement to sell, earnest money of Rs.05,00,000/- was paid. It was averred that the total amount was paid by two cheques of Rs.20,000/- each dated 22nd February, 2006 and cheques for Rs.02,00,000/-, Rs.01,28,000/- and Rs.01,20,000/- respectively, all dated 23rd February, 2006, drawn from the joint family business accounts in the Anand Mercantile Co- operative Bank. The details of the payment made from such accounts are mentioned in paragraphs 3, 4 and 5 of the plaint.

3.4 In the plaint the details of cheques towards consideration and earnest money for 300 sq. mtrs. of land and 1200 sq. mtrs. of land were mentioned. Thus, it is the case that for the said two parcels of land, Rs.09,90,000/- and Rs.09,78,000/- came to be paid by cheques drawn on Anand Mercantile Co-operative Bank whereas Rs.12,000/- was paid in cash to the original owner. As far as the amounts paid towards sale consideration/earnest money is concerned, it is the case of the plaintiffs that the same was contributed from the joint business income of the family. It is the case that parties had been running a joint business in the name of Verma General Stores and in other names and style, and the cheques towards earnest money were issued from such accounts at Anand Mercantile Co-operative Bank. The Bank had also given a certificate (Mark 3/5) that the cheques were issued towards satisfaction of the sale consideration from the accounts of the joint business named as above.

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3.5           It is the further case that by executing a

writing on the stamp paper (Mark 49/1), division of properties of the deceased father took place on 30th August, 2010 amongst the plaintiffs, defendant Nos.1 and 2 and defendant No.4. It was signed and notarised. It is the further case that on the same day, another agreement (Mark 49/2) between the plaintiffs and defendants came to be entered into in respect of the property subject matter of agreement to sell which is also the suit property. It was agreed in the said writing dated 30th August, 2010 that all the three brothers had right over the said land and that defendant No.1 did not have any exclusive right thereover, he was not entitled to deal with the said land or to sell the same.

3.6 It is the further case that as the vendor- owner of the land had been avoiding the execution of sale deed in respect of 1200 sq. mtrs. of land, with oral consent of the plaintiffs, defendant No.1 instituted Special Civil Suit No.156 of 2007 for specific performance. It is averred in the plaint that advocate fees were paid for the said suit from the income of the joint firm. It is the say of the plaintiffs that later the defendants developed ill- intentions, they used to convey to the plaintiffs that the suit was pending. The plaintiffs suspected foul play, obtained copy of City Survey record on 20th March, 2018 to know to their surprise that the land was divided into two parcels of 600 sq. mtrs. each and the said two parcels were purchased by defendant No.1 from the heirs of said Miteshbhai, keeping the

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plaintiffs in dark. Two registered sale deeds dated 07th November, 2015 and 20th July, 2017 were got executed by defendant Nos.1 and 2 in their favour.

3.7 Soon after the above two sale deeds in favour of defendant Nos.1 and 2, Special Civil Suit No.156 of 2007 was compromised in Lok Adalat. Thereafter succeeded the sale deed in favour of respondent No.3, the proprietor of Krishna Realty who purchased the property for Rs.01,85,000/- from the defendants under registered sale deed dated 09th October, 2017. It is the case of the plaintiffs that, that is how the defendants not only enriched themselves by earning higher amount, they usurped the property which was meant as joint family property and duped the plaintiffs.

3.8 At this stage, it may be noted that when the present Appeal from Order came up for consideration before the court on 15th October, 2020, on behalf of the respondent No.3, an objection was taken that a composite appeal in respect of common order below Exh.5 and below Exh.35 was filed which was not maintainable and that two corresponding appeals ought to have been filed. Notice to the respondents was issued by the Court on 15th October, 2020, in respect of the impugned order in so far as it related to Exh.5. Liberty was reserved for the appellants to file separate appeal in respect of order pertaining to Exh.35, however such separate appeal was not filed. It was stated by learned advocates appearing for the appellants that the appellants had not chosen

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to file separate appeal in respect of order below Exh.35, stating that the prayers in Exh.5 would cover the prayer in Exh.35. Be as it may. In view of the above statement, the present appeal stands confined to the common order passed by the court below in so far as it corresponds to rejection of Exh.5 application of the plaintiffs.

3.9 Defendant Nos.1 and 2 filed their written statement (Exh.44), whereas defendant No.3 filed his written statement (Exh.58). The case of the

including that the purchase of the property was for joint family and out of joint funds. The first Memorandum of Understanding dated 30th August, 2010 (Mark 49/1) was relied on whereas the other unnotarised Memorandum of Understanding of even date (Mark 49/2) was doubted by defendant Nos.1 and 2 for its genuineness. They contended that other sale deeds except sale deed in favour of defendant No.3 were not challenged. Defendant No.3 in his written statement inter alia claimed that he is a bona fide purchaser for value and that had started construction over the land making huge investment after obtaining development permission.

4. Learned senior advocate for the appellants submitted that defendant No.1 who was Karta and trusted by the family members, acted in breach of trust in dealing with the property sole-handedly. He submitted that the earnest money consideration was contributed to the extent of more than 50% out of

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joint family funds by way of cheques issued from joint business accounts in the Anand Mercantile Co- operative Bank. Learned senior advocate thereafter took the court through chain of events starting from execution of agreement to sell to filing of the suit for specific performance, to execution of two sale deeds in favour of the defendants by parcelling out the lands, leading to compromise of the suit in the Lok Adalat and finally the land having been sold in favour of respondent No.3.

4.1 Learned senior advocate emphasised that amount was contributed from the joint accounts. As regards the case of the defendants that in the Memorandum of Understanding (Mark 49/1) the suit property was not included, it was submitted that since Special Civil Suit No.156 of 2007 was pending and the suit property was not transferred in favour of defendant No.1, therefore was omitted from being included. It was highlighted that in the MoU entered into on the same between the family members, it was clearly agreed and understood that the suit property was joint of all brothers and that defendant No.1 did not have any sole right thereover to be entitled to deal with or sell the same. It was submitted that the said document (Mark 49/2) was signed by all the three brothers and bore signatures of two witnesses as well.

4.2 Decision in Narendra Kante v. Anuradha Kante [(2010) 2 SCC 77] was pressed into service on behalf of the appellants for the concept of balance of

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convenience and irreparable injury and the directions in paragraph No.32 of the judgment were relied on. With reference to the aspect whether construction should be permitted as it would create equities and third parties right, decision of the Supreme Court in Goan Real Estate and Constructions Limited v. Peoples Movement for Civic Action [(2008) 12 SCC 574] was cited. In respect of the principles to be applied for granting interim injunction under Order XXXIX Rule 1, 2, CPC, decision of this Court in Vishnu Thakore v. Amit Pransukhlal Patel [2007 (4) GLR 2810] was relied on.

4.3 Learned senior counsel for respondents- defendant Nos.1 and 2 submitted that the entire case of the plaintiffs hinges upon Memorandum of Understanding (Mark 49/2) which is non-notarised document against which, it was submitted that the document at Mark 49/1 was for partition of the properties without the suit property which was notarised one. According to submission of learned senior counsel the document (Mark 49/2) does not inspire confidence in respect of its very content. It was submitted that only challenge dogged in the plaint is against the sale deeds executed in favour of defendant No.3. It was also the submission that sales effected in favour of defendant Nos.1 and 2 have not been challenged.

4.4           Learned senior advocate for respondent No.3
submitted        that       there        was      delay        on     part        of       the
appellants          which       would        disentitle             them      to       claim





          C/AO/100/2020                                               CAV ORDER

equitable relief. Canvassing the principle that the delay defeats equity, it was submitted that defendant No.3 purchased the land for consideration and was granted permission for development of the land on 27th November, 2017 and the revised permission was also granted. It was submitted that written statement was filed by him on 05th March, 2019, impugned order was passed on 19th September, 2019 and when the court was moved in the Appeal From Order, few months had passed.

4.5 For submitting that the case of the plaintiffs lacks merit, learned senior advocate canvassed same submissions as were put-forth on behalf of defendant Nos.1 and 2 by inter alia submitting that the parties did not include in document of partition (Mark 49/1), the suit property. It was submitted that the dispute essentially was between the plaintiffs and defendant Nos.1 and 2 with which defendant No.3 has no concern.

4.6 It was vehemently submitted on behalf of defendant No.3 that defendant No.3 was a bona fide purchaser. Having bona fide purchased the suit property, it was submitted, construction is started, huge investment is incurred and that defendant No.3 is accordingly changed his position. It was submitted that it would be highly inequitable if the construction is stopped or any injunctive relief is granted against defendant No.3. According to submission, plaintiffs had no prima facie case.

          C/AO/100/2020                                                 CAV ORDER



4.7            In    support          of    his           varioius      submissions,

learned senior advocate relied on decision of the Supreme Court in Best Sellers Retail (India) Private Limited v. Aditya Birla Nuvo Limited [(2012) 6 SCC 792] and further adverted to decision in Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel [(2006) 8 SCC 726] to highlight the scope of Order XLIII Rule 1, CPC and submitted that even if second view is possible, the same is not required to be substituted.

5. Having considered the facts, pleadings and the rival contentions, while defendant No.3 has raised a stand that he is a bona fide purchaser without notice, there is no gainsaying that respondent No.3-defendant No.3 did not issue any public notice in the newspaper before purchaser of the property. Neither title-clearance notice was issued nor the title-clearance certificate was obtained before defendant No.3 ventured to purchase the property. It would be reasonable to accept from any prudent buyer who purchased immovable property of 1500 sq. mtrs. in the city like Anand, that he acts with due diligence and reasonable care of issuing public notice and taking such minimum steps. It is again a matter of evidence to be gone into whether defendant No.3 had taken reasonable care even as no public notice was issued. Defendant No.3 started construction over the suit land after purchasing the same.

5.1 Reverting to the aspects in the case of the plaintiffs available from the facts and pleadings and

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furthered by submissions canvassed, the specific case put-forth by the plaintiffs is that defendant No.1 brother being the elder member and Karta in the family, purchased the property in question for the family but subsequently by his conduct duped the plaintiffs, who too also have got their share. The agreement to sell dated 23rd February, 2006 (Mark 3/3) executed by the original owner in favuor of defendant No.1 was for consideration of Rs.24,00,000/-, out of which Rs.05,00,000/- was paid towards earnest money. Now, it is a fact emerging that out of the cheques paid towards the said earnest money, more than one cheques were paid out of the joint family business savings account/current account in the Anand Mercantile Co-operative Bank. The Bank has also issued certificate to this effect which is part of the record.

5.2 The details of the cheques of the amounts paid from different accounts as mentioned in the certificate (Mark 3/5) are as under, which cheques also includes the cheques drawn from the joint family business accounts. (i) cheque dated 02nd February, 2006 bearing No.718008 for Rs.01,00,000/- from Account No.CA/6386 of Verma General Stores, (ii) cheque dated 23rd February, 2006 bearing No.718002 for Rs.02,00,000/- from Account No.CA/6386 of Verma General Stores, (iii) cheque dated 23rd February, 2006 bearing No.718023 for Rs.03,90,000/- from Account No.CA/6386 of Verma General Stores, (iv) cheque dated 23rd February, 2006 bearing No.712949 for Rs.01,28,000/- from Account No.CA/6385 of Vishal Bag

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Center, (v) cheque dated 23rd February, 2006 bearing No.703527 for Rs.01,20,000/- from Account No.CA/6387 of Kanpur Bag Center, (vi) cheque dated 22nd February, 2006 bearing No.06467 for Rs.20,000/- from Account No.SB/12656 of Nalin J. Verma, (vii) cheque dated 23rd February, 2006 bearing No.05181 for Rs.20,000/- from Account No.SB/14027 of Narendra J. Verma.

5.3 There would be no gainsaying that the above factor assumes significance and importance. Taken this context and further considerations such as relationship between the parties who were the family members and attendant circumstances lend a prima facie acceptability to the case of the plaintiffs- appellants about the agreement to sell having been executed in respect of the suit property, was in the nature of joint purchase on behalf of the family, and that defendant No.1 being the elder member trusted by all, the agreement to sell was entered in his name, even though the consideration/earnest money was contributed from the family business funds. Defendant No.1 thereafter filed Special Civil Suit NO.156 of 2007 for specific performance of agreement to sell dated 23rd February, 2006 against said original owner Miteshbhai as he was stated to be dogging the execution of sale deed. What is pleaded on this count is that the suit was filed with the consent of the plaintiffs and that the advocate fees were paid from the family funds.

5.4 The events travelled in quick succession.

(a) Defendant Nos.1 and 2 got executed two sale deeds

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from the heirs of Miteshbhai parcelling out the 1200 sq. mtrs. of land into 600 sq. mtrs. each. Sale deed dated 05th November, 2015 and dated 20th July, 2017 came to be executed in favour of defendant Nos.1 and 2 who paid consideration of Rs.17,50,000/- and Rs.19,50,000/- respectively, (b) On 29th July, 2017 compromise Purshis (Exh.98) was filed in Special Civil Suit No.156 of 2007 and the same came to be withdrawn by defendant No.1, (c) within short span of three months, the land was sold of by virtue of sale deed dated 09th October, 2017 in favour of defendant No.3, (d) it is the case of the plaintiffs that all the sale deeds, withdrawal of the suit by settling in the Lok Adalat and further changing hands by selling it of the property to defendant No.3 was behind the back, (e) it is the say that the plaintiffs knew only when they inquired with the City Survey Office.

5.5 It is prima facie believable stand of the plaintiffs that in the Memorandum of Understanding for partition of properties (Mark 49/1), the reason for non-inclusion of the suit property was that at the relevant time Special Civil Suit No.156 of 2007 for specific performance filed in the name of defendant No.1 was pending and the ownership of property was not acquired. Furthermore, while the defendants have also sought to dispute Memorandum of Understanding dated 30th August, 2010 (Mark 49/2), the said aspect is matter of evidence. The non- genuineness of the said document as alleged by the other side must be proved on evidence and no final view can be expressed at this stage. Merely because

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doubts are raised in the arguments with regard to the said documents by the respondents-defendants, the same by itself would not take away, obliterate or weaken the positive elements of prima facie case of the plaintiffs.

5.6 When the impugned order passed by the court below is examined with reference to the rejection of the prayer made in Exh.5 application, the court below has misdirected and erred itself on more than one counts in recording the findings. Pending trial of the suit and leading of evidence, the court has drawn a conclusion that it is not believable that the plaintiffs has one-third share in the suit property. It was also recorded that there is no proof available whether the amount of earnest money consideration was paid from the income of the family property. In taking this view, the court below has palpably ignored the details of the payments made from the bank accounts of the joint family business.

5.7           In         holding        that          the        Memorandum               of
Understanding            (Mark    49/2)        cannot       be    believed,             the

trial court overlooked that such view could be taken only on the basis of the evidence yet to be recorded. The trial court observed that possession of the suit property was with the defendants but it is not proved that any right of the plaintiffs is violated, which view disregards the principle for grant of interim injunction that during the pendency of the suit, unless the status of the property is protected, the plaintiffs may be put to prejudice and irreparable

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injury. In view of the total consideration of the matter, the trial court was not justified in concluding that the balance of convenience was not in favour of the plaintiffs so as to entirely deny the prayer for interim injunction. The reasoning of the trial court is a misjudged reasoning and conclusions are not correctly drawn to ultimately dismiss the prayer in Exh.5 application. Erroneous reasoning often contributes to vitiate the ultimate conclusion.

5.8 It may be stated at this stage of discussion that the subject matter property, at the time of institution of suit was open land. The respondent No.3-defendant No.3 having purchased the same, has proceeded to put up the construction thereon. Panchnama (Mark 11/2) points to the factum of construction having been raised over the property. As per the case of the defendant No.3, the construction is almost over. In this light, the court is not inclined to pass restraint order in that regard. Even otherwise, the present appeal, as stated above, stands confined to Exh.5 application in the suit.

5.9 The total facts operating in the case and the reasoning and discussions supplied hereinabove, the existence of prima facie case in favour of the plaintiffs could not be denied. While observations in paragraph 5.8 above would stand, at the same time, since prima facie case of the nature and extent highlighted and discussed in the foregoing paragraphs, arises for the plaintiffs as above, the consideration of balance of convenience would step in

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as there would be need to preserve and protect the subject matter property during the pendency of the suit from being transferred, alienated, encumbered or changing hands. Multiplicity of proceedings is also one of the weighty considerations and becomes part of facet of balance of convenience, for, if the disputed property is allowed to be transferred from one hand to another and/or allowed to be subjected to induction of third party rights, the parties to the proceedings will have to indulge into multiple legal proceedings in future. In this light also, the titular status of the property deserves to be maintained and protected. In the above view, the court below was not justified on facts and in law in refusing to exercise of powers under Order XXXIX Rule 1, 2 of CPC to dismiss the injunction prayer.

6. In light of the foregoing discussion and reasons, the impugned order dated 19th November, 2019 passed by learned 4th Additional Senior Civil Judge, Anand in so far as it relates to rejection of Exh.5 application, is hereby set aside, and the following directions shall operate.

(i) Special Civil Suit No.82 of 2018 shall be expeditiously proceeded with and shall be decided on or before 31st December, 2021.

The parties shall co-operate in the expeditious disposal in the said property;

(ii) Till the suit is decided, the respondents-

defendants are injuncted from transferring or alienating in any manner whatsoever the

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subject matter property being an open land admeasuring 1500 sq. mtrs. located on the East of 2384 sq. mtrs. land falling on the Southern side of Final Plot No.69 Paiki in Town Planning Scheme No.4 (Anand) and are further restrained from creating any charge or encumbrance or third party interest of any kind and in any manner;

(iii) It is made clear that if the suit property has been transferred or alienated or any charge, encumbrance or third party interest has been created therein of any kind and in any manner whatsoever, the same shall be subject to the final outcome and the orders which may be passed in the Special Civil Suit.

7. The Appeal From Order is allowed to the aforesaid extent and stands disposed of.

ORDER IN CIVIL APPLICATION

In view of order passed in the Appeal From Order, the present Civil Application does not survive and no orders are required to be passed in the Civil Application. The same stands disposed of accordingly.

(N.V.ANJARIA, J)

FURTHER ORDER

At this stage, learned senior advocate Mr.Dhaval Dave for respondent No.3 prayed for stay of the implementation of the aforesaid order for the

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purpose of approaching the higher forum.

For the reasons recorded in the order, the request is declined.

(N.V.ANJARIA, J) ANUP