Darpan (Ghatlodia) Cooperative ... vs Dahyabhai Maganbhai ...
2022 Latest Caselaw 3808 Guj

      C/AO/306/2019                               JUDGMENT DATED: 31/03/2022



             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                    R/APPEAL FROM ORDER NO. 306 of 2019
                                    With
                 CIVIL APPLICATION (FOR STAY) NO. 1 of 2019
                   In R/APPEAL FROM ORDER NO. 306 of 2019

FOR APPROVAL AND SIGNATURE:


HONOURABLE DR. JUSTICE A. P. THAKER

==========================================================

1     Whether Reporters of Local Papers may be allowed                  No
      to see the judgment ?

2     To be referred to the Reporter or not ?                           No

3     Whether their Lordships wish to see the fair copy                 No
      of the judgment ?

4     Whether this case involves a substantial question                 No
      of law as to the interpretation of the Constitution
      of India or any order made thereunder ?

==========================================================
     DARPAN (GHATLODIA) COOPERATIVE HOUSING SCOIETY LIMITED
            THRU CHAIRMAN NARESH GANGARAM RATHOD
                             Versus
         DAHYABHAI MAGANBHAI RABARI(DESAI) @ D.M.DESAI
==========================================================
Appearance:
MS SEJAL K MANDAVIA(436) for the Appellant(s) No. 1
MR PATHIK M ACHARYA(3520) for the Respondent(s) No. 1
MS TRUSHA K PATEL(2434) for the Respondent(s) No. 2,3,4,5
==========================================================

    CORAM:HONOURABLE DR. JUSTICE A. P. THAKER

                              Date : 31/03/2022

                             ORAL JUDGMENT

1. Being aggrieved and dissatisfied with the order dated

8.3.2019 passed by learned 2nd Additional Senior Civil

Judge, Ahmedabad (Rural) in Special Civil Suit No. 92 of

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

2018 below Exh-5 whereby the interim injunction filed by

the present Appellant- plaintiff came to be rejected by the

trial Court, the original plaintiff has preferred this Appeal

from Order under Order 43 Rule 1(r) of the CPC.

2. For the brevity and convenience, the parties are referred to

in this order as per the character assigned to them in the

trial Court i.e. plaintiff and defendant.

3. The brief facts of the case of the plaintiff is that there was

an agreement to sell between it and the defendant No.1

for the land bearing Khata No.883 paiki, Revenue Survey

No. 157/1/1/ paiki- T.P. Scheme No.18 (Ghatlodiya), Final

Plot No. 112, admeasuring 1059 sq. mtrs of land, which is an

old tenure land. That there was an agreement to sell

executed on 22.10.1997 and thereafter possession of the

land was handed over to the plaintiff vide Notarised

document dated 25.10.2004. According to the plaintiff,

there was a condition to get the title cleared and then

necessary registered sale deed was to be executed

between the parties. It is the case of the plaintiff that as

there was litigation regarding the title of the property,

though part payment of the said transaction was paid to

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

the defendant and possession was handed over to the

plaintiff by the defendant No.1, the defendant No.1 did not

executed the sale-deed. That after clearance of title,

instead of executing the sale-deed in favour of the plaintiff,

the defendant No.1 has executed a registered sale deed in

favour of respondent Nos. 2 to 5. In that view of the matter,

the plaintiff has filed the aforesaid Special Civil Suit No. 92

of 2018 for specific performance of the Contract with an

alternative prayer for compensation in terms of Rs. 3 Crore.

Along with the plaint, the plaintiff has also filed an

application at Exh-5 for interim injunction for restraining

the defendant from creating any third party interest or

dealing with the property or transferring to any other third

party. The same came to be rejected by the trial Court by

the impugned order.

4. Heard Ms. Sejal Mandavia, learned advocate for the

appellant, Mr. Pathik M. Acharya, learned advocate for the

defendant No.1 and Ms. Trusha Patel, learned advocate for

the defendant Nos. 2 to 5 at length. Perused the material

placed on record and decision cited at bar.

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

5. Ms. Sejal Mandavia, learned advocate for the plaintiff-

appellant has vehemently submitted that there is no

dispute regarding the execution of agreement to sale

between the plaintiff and defendant No.1. She has

submitted that at the relevant time part payment was paid

to the defendant No.1 by the Society and after title

clearance, the defendant No.1 had to execute the sale-deed

in favour of the plaintiff. She has also submitted that in the

year 2004, a document was executed before the Notary

handing over the possession of the land in question to the

plaintiff- Society. She has submitted that since title was not

cleared, there was no execution of the sale-deed, but, as

soon as order came to be passed by revenue authority, in a

disputed case of revenue entry pertaining to the suit land,

the defendant No.1, instead of executing the registered

sale-deed in favour of the plaintiff, has executed the sale

deed in favour of respondent Nos. 2 to 5. She has

submitted that the defendant No.1 in written statement

has only raised plea regarding limitation. However,

according to Ms. Mandaliya, learned advocate for the

plaintiff, since there is a transaction in respect of

immovable property, time cannot be considered as essence

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

of the Contract. She has also submitted that since there

was cloud over the title of the defendant No.1, the sale-

deed could not be executed and, therefore, the condition

of need to execute requisite sale deed in 9 months, must be

read from the date of the title clearance of the defendant

No.1.

5.1 Ms. Mandavia, learned advocate for the appellant has also

vehemently submitted that when the possession was

handed over to the plaintiff by the defendant No.1, even by

executing sale deed in favour of the defendant Nos. 2 to 5,

no title could be passed to the rest of the defendants. She

has also submitted that since there is a breach of

agreement to sell, and the same is in existence, the plaintiff

had filed the Suit for Specific Performance of Contract and,

therefore, interim injunction, if, not granted in favour of

the plaintiff then there would be multiplicity of

proceedings as in that case, the defendants may re-transfer

it to somebody else or create any encumbrance upon the

property. While referring to the impugned order of the trial

Court, she has submitted that the trial Court has even not

considered the entire documentary evidence on record and

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

in a cryptic manner passed the impugned order. She has

also submitted that a Criminal Complaint has already been

filed about the breach of trust against the defendant No.1.

She has relied upon the following decisions and has prayed

to set aside the impugned order and to pass interim

injunction, restraining the defendants from dealing with

the property till the final disposal of the Suit.

1. Narinderjit Singh v. North Star Estate promoters

Limited, reported in (2012) 5 SCC 712;

2. Madina Begum and Another v. Shiv Murti Prasad

Pandey and other, reported in (2016) 15 SCC 322.

6. Per contra, Ms. Trusha Patel, learned advocate for

respondent Nos. 2 to 5, who are the purchasers of the land

in question from defendant No.1, has vehemently argued

that as per the agreement to sell only Rs. 1 Lakh has been

paid to the defendant No.1 and as per Condition No.1

thereof, there was a specific period agreed between the

parties to execute registered sale deed and that period was

fixed as 9 months. She has submitted that 9 months have

expired on 6.4.2010. According to her submission, since the

agreement to sell is dated 6.3.2009, cause of action has

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

already started from that date and Suit ought to have been

filed within the period of limitation. By referring to the

Condition No.6, she has submitted that even possession

was to be handed over only at the time of execution of

registered sale-deed and, therefore, the version of the

plaintiff that possession was handed over by Notarised

document cannot be believed. She has submitted that the

original owner has sold the property to the defendant Nos.

2 to 5 after 8 years and the sale consideration is almost Rs.

70 Lakh. She has also submitted that as per the agreement

the land is an old tenure and even as per the order of the

High Court dated 15.10.2001 land was held to be old tenure

land. Therefore, even in the year 2001, it was known to the

plaintiff that title of the defendant was clear and the

plaintiff ought to have got the registered sale deed in its

favour. She has also submitted that Society has even not

applied for appropriate permission under Section 53 of the

Societies Act. She has submitted that the defendant Nos. 2

to 5 are bonafide purchaser for value paid and suit is time

barred and, therefore, no injunction could be passed in the

matter. She has also submitted that considering the

alternative prayer for compensation, there is no need of

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

passing any order of injunction. She has also submitted that

even there is no pleading in the plaint as to readiness and

willingness to perform its part of the contract by the

plaintiff. She has relied upon the following decisions and

has prayed to dismiss the present appeal and submitted

that the trial Court has not committed any error of facts

and law in rejecting the application for interim injunction.

1. Laxminagar Co-operative Housing Society Thro.

Organisor v. Mamlatdar and Agricultural Land

Tribunal, reported in 2005 (3) GLR 2083;

2. Shaileshbhai Naranbhai Patel v. Nimeshbhai

Prahladbhai Patel (Bhagat), reported in 2015 JX (Guj)

351;

3. Order dated 16.9.2019 passed by the Coordinate

Bench in Appeal From Order No. 205 of 2014 and

allied matters, in the case of Hitesh Ramanlal Patel v.

Sentinel Properties Pvt. Ltd. & 1 Others;

4. Judgment of Division Bench of this Court dated

28.11.2017 passed in First Appeal No. 2566 of 2017 in

the case of Vallabhbhai Kalyanji Prajapati v.

Durlabhbhai Lallubhai Halpati & 9;

5. Best Sellers Retail (India) Pvt. Ltd v. Aditya Birla Nuvo

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

Limited, reported in AIR 2012 SC 2448;

6. Kanshi Ram v. Om Prakash Jawal and Others, reported

in AIR 1996 SC 2150;

7. Nandkishore Lalbhai Mehta v. New Era Fabrics Private

Limited, reported in 2015 (9) SCC 755;

8. Gunvantlal Ratanchand V. Rameshbhai P. Patel,

reported in 2001 (1) GCD 1518;

9. Ashwinkumar Manilal Shah v. Chhotabhai Jethabhai

Patel, reported in AIR 2001 Guj 90;

10. Kanubhai Sankalchand Patel v. Nayankunj Co-

operative Housing Society Limited, reported in 1978

GLR 1920;

11. Abdul Khader Rowther v. P.K. Sara Bai, reported in AIR

1990 SC 682;

12. Order dated 31.8.2010 passed by Division Bench of

this court in Letters Patent Appeal No. 932 of 2000 in

Special Civil Application No. 1491 of 1999 in the case

of State of Gujarat & 2 v. Prathmesh Farms Pvt. Ltd &

1;

13. Veetrag Holding Co. Ltd. v. Gujarat State Textile

Corporation Ltd, reported in 1996 (3) GLR 536;

14. K.S. Vidyanadam & Ors v. Vairavan, reported in 1997

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

(2) SC 597;

15. Suryagandhi v. Lourduswamy, reported in AIR 2004

MADRAS 8;

16. Sameer Suresh Gupta Through Pa Holder V. Rahul

Kumar Agarwal, reported in (2013) 9 SCC 374.

7. Mr. Pathik Acharya, learned advocate for the original owner

i.e. defendant No.1 has adopted the arguments of Ms.

Trusha Patel, learned advocate for the defendant Nos. 2 to

5 and in addition to that he has submitted that time was

essence of the Contract as per the Condition No.1 and no

possession was handed over to the plaintiff in the past as

alleged by the Plaintiff. He has also submitted that

consideration was to be paid within 9 months from the date

of agreement to sell, however, entire consideration has not

been paid to the defendant No.1. He has also submitted

that the Suit is barred by law of limitation. He has

supported the impugned order of the trial Court and

prayed to dismiss the present Appeal from Order. He has

relied upon the following decisions:

1. Ambalal Sarabhai Enterprise Limited v. K.S. Infraspace

LLP Limited and Another, reported in (2020) 5 SCC

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

8. In rejoinder, Ms. Sejal Mandavia for the plaintiff has

submitted that all the conditions of the agreement to sell

needs to be taken into consideration and since there was

no title clearance got by the original owner, execution of

the sale-deed could not be possible. She has also submitted

that during the pendency of the Suit, the defendant has

also moved an Application under Order 7 Rule 11 which

came to be rejected by the trial Court. She has also

submitted that the Suit is within time as title was cleared in

the year 2017 only and there was litigation pending before

this High Court as well as before Revenue Authority in

respect of the land in question. She has submitted that the

case is at the evidence stage but if no interim injunction is

granted, then, there might be further sale or encumbrances

created by the defendant Nos. 2 to 5 upon the land in

question. She has prayed to allow the present appeal .

9. Now it is well settled that grant of relief in a Suit for

Specific performance is discretionary remedy and the

plaintiff seeking temporary injunction will have to establish

a prima-facie case on the basis of undisputed facts. The

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

various authorities relied upon by both the sides deals with

the Principles of granting or refusing the interim relief and

the power of the Appellate court in interfering with the

discretionary order passed by the trial Court.

10. Now, in this regard, the latest decision of the Apex Court in

the case of Ambalal Sarabhai Enterprise Limited v. K.S.

Infraspace LLP Limited and Another (Supra), needs to be

referred to herein wherein Paras-15, 16 and 19 the

following observations are made:

"15. Chapter VII, Section 36 of the Specific Relief Act, 1963 (hereinafter referred to as 'the Act') provides for grant of preventive relief. Section 37 provides that temporary injunction in a suit shall be regulated by the Code of Civil Procedure. The grant of relief in a suit for specific performance is itself a discretionary remedy. A plaintiff seeking temporary injunction in a suit for specific performance will therefore have to establish a strong prima- facie case on basis of undisputed facts. The conduct of the plaintiff will also be a very relevant consideration for purposes of injunction. The discretion at this stage has to be exercised judiciously and not arbitrarily."

"16. The cardinal principles for grant of temporary injunction were considered in Dalpat Kumar vs. Prahlad Singh, (1992) 1 SCC 719, observing as follows :

"5...Satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The Court further has to satisfy

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

that non-interference by the Court would result in "irreparable injury" to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury or dispossession. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury, but means only that the injury must be a material one, namely one that cannot be adequately compensated by way of damages. The third condition also is that "the balance of convenience" must be in favour of granting injunction. The Court while granting or refusing to grant injunction should exercise sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties, if the injunction is refused and compare it with that which is likely to be caused to the other side if the injunction is granted. If on weighing competing possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit, the subject matter should be maintained in status quo, an injunction would be issued. Thus the Court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit."

"19. In a matter concerning grant of injunction, apart from the existence of a prima facie case, balance of convenience, irreparable injury, the conduct of the party seeking the equitable relief of injunction is also very essential to be considered as observed in Motilal Jain (supra) holding as follows :

"6. The first ground which the High Court took note of is the delay in filing the suit. It may be apt to bear in mind the following aspects of delay which are relevant in a case of specific performance of contract for sale of immovable property:

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

(i) delay running beyond the period prescribed under the Limitation Act;

(ii) delay in cases where though the suit is within the period of limitation, yet:

(a) due to delay the third parties have acquired rights in the subject-matter of the suit;

(b) in the facts and circumstances of the case, delay may give rise to plea of waiver or otherwise it will be inequitable to grant a discretionary relief."

11. It is also well settled law that the Appellate Court may not

interfere with the exercise of discretion of the Court of first

instance and substitute its own discretion except where the

discretion has been shown to have been exercised

arbitrarily, or capriciously or perversely or where the Court

had ignored the settled principles of law regulating grant or

refusal of interlocutory injunctions. An appeal against

exercise of discretion is said to be an appeal on principle.

The Appellate Court will not reassess the material and seek

to reach a conclusion different from the one reached by the

Court below if the one reached by the court was reasonably

possible on the material. The appellate Court would

normally not be justified in interfering with the exercise of

discretion under appeal solely on the ground that if it had

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considered the matter at the trial stage it would have come

to a contrary conclusion.

12. Now, it is also well settled Principle that in case of sale of

immovable property, time is never regarded as essence of

the Contract. Of course, by conduct or special condition, in

an agreement to sell, specified period of time for execution

of furhter sale-deed may be enumerated by the parties

through mutual consent.

13. Now, considering the averments made on behalf of both

the sides coupled with the material placed on record, it is

undisputed fact that there is agreement to sell executed

between the complainant and defendant No.1 in the year

2009 and defendant No.1 has also received consideration of

Rs. 1 Lakh through Cheque. It also emerges from the record

that defendant No.1 has not executed sale deed in favour

of the plaintiff and has now soled the property in question

to defendant Nos. 2 to 5 by registered sale deed. On

perusal of the pleadings of the parties before the trial

Court, it emerges that the only question raised by the

original owner i.e. defendant No.1 is relating to the period

of limitation relying upon the Condition No.1 in the

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Agreement to Sell wherein the period is shown to be 9

months, whereas the defence taken by the defendant Nos.

2 to 5 i.e. new purchaser is that of bonafide purchaser with

value paid and also on the ground of delay. Now on perusal

of the material placed on record, it clearly reveals that there

was litigation pending before this Court as well as before

the revenue authority regarding the title clearance of the

land. It also appears from the agreement to sell that there

are many other conditions enumerated in the agreement to

sell, one of which is obtaining on the part of the seller i.e.

defendant No.1 to get it cleared and thereafter registered

sale-deed was to be executed in favour of the plaintiff.

Now, as revealed from the record, there was cloud over the

title of the defendant No.1 till the year 2016-17. Under the

circumstances, till the title of the defendant is not clear,

there cannot be ground for plaintiff to insist for registered

sale-deed. Considering the facts of the present case, it

prima facie reveals that the point of limitation raised by the

defendants' side is a mixed question of facts and law and,

therefore, it needs a trial.

14. In view of the fact that there is no cancellation of

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

agreement to sell made by the defendant No.1 and the fact

that the title came to be cleared in the year 2016-17, he

ought to first inform the plaintiff for execution of the sale

deed on the basis of earlier agreement to sell. However, in

the present case no such course has been adopted and the

defendant No.1 has sold the property in question to the

defendant Nos. 2 to 5. Thus, propriety right of the plaintiff

is at stake. If, during the pendency of the Suit, further

transaction is carried out by the defendant's side then it

may affect the right of the plaintiff and there will be

multiplicity of proceedings. Now, so far as the alternative

prayer of compensation is concerned, it needs to be

observed that under Specific Relief Act, the alternative

prayer may be asked by the plaintiff in case of Specific

Performance to Contract. If in a given case, it is found by

the Court that specific performance of the Contract is not

possible, then in view thereof, the Court may pass an

appropriate Order for awarding compensation thereof.

Now, in the present case, the question raised by the

defendant's side regarding the Tenancy Act is concerned, it

pales into insignificance, in view of the fact that the title has

been now got cleared by the defendant No.1 and he has

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already sold the property to the rest of the defendants.

Under the facts and circumstances of this case, it clearly

transpires that all the three ingredients of the granting

interim injuction i.e. prima-facie case, irreparable injury and

balance of convenience are in favour of the plaintiff. At this

juncture, it is pertinent to note that the trial Court has even

not considered documentary evidence and the pleading

before it in proper perspective. The order of the trial Court

is cryptic one. Under this circumstances, since the trial Court

has not considered the documentary evidence in its proper

perspective and has materially erred in rejecting the

application though the order of trial Court is discretionary

one, it needs to be interfered with by this Court.

15. In view of the aforesaid discussion, present Appeal from

Order needs to be allowed and hence it is allowed. The

impugned order dated 8.3.2019 passed by learned 2nd

Additional Senior Civil Judge, Ahmedabad (Rural) in Special

Civil Suit No. 92 of 2018 below Exh-5 is hereby quashed and

set-aside. The defendants are hereby restrained to sell,

transfer, assign, gift, mortgage, and/ or to create any kind

of third party interest in any manner, in the suit property till

C/AO/306/2019 JUDGMENT DATED: 31/03/2022

the final disposal of the Suit. Considering the facts that Suit

is of the year 2018 and it is at evidence stage, the trial

Court is hereby directed to ensure earlier disposal of the

Suit, as early as possible, preferably within a period of 3

months from the date of receipt of this order. The parties

are directed to co-operate the trial Court for earlier

disposal of the Suit.

No order as to costs.

In view of the above, the Civil Application also stands

disposed of accordingly.

(DR. A. P. THAKER, J) SAJ GEORGE

FURTHER ORDER

After pronouncement of the judgment, learned advocate

Ms. Trusha Patel for the defendant Nos. 2 to 5 submitted that

this order be stayed.

However, considering the facts and circumstances of the

case, the same is declined.

(DR. A. P. THAKER, J) SAJ GEORGE