M/S. Incredible India Projects ... vs Smt.A.Ananya Bhatt
2021 Latest Caselaw 2768 Tel

         THE HONOURABLE THE ACTING CHIEF JUSTICE
                SRI M.S.RAMACHANDRA RAO

                                   AND

          THE HON'BLE SRI JUSTICE T.VINOD KUMAR

                        CMA No. 386 OF 2021

JUDGMENT:(Per Sri Justice M.S.Ramachandra Rao)

1.    This Appeal is filed challenging the order dt.01.06.2021 in

IA.No.334 of 2020 in OS.No.79 of 2020 of the XVI Additional

District and Sessions Judge-cum-XVI Additional Metropolitan

Sessions Judge, Ranga Reddy District at Malkajgiri.


2.    Appellant herein is plaintiff in the said suit.


3.      It filed the said suit against the respondents for

declaration that the registered sale deed dt.19.02.2020 executed

by the 1st respondent in favour of the 2nd respondent is null and

void, and not binding on the appellant, and to direct the

respondents to execute a registered sale deed in favour of the

appellant in respect of the suit schedule property by receiving

the balance sale consideration of Rs.2 Crores.

Case of the appellant/plaintiff:

4. It is the contention of the appellant that it is a Company

incorporated under the Companies Act, 1956; that

1st respondent is the absolute owner and possessor of subject

property in a lay out sanctioned by the HMDA having purchased

it under a registered sale deed dt.28.07.2016; that the

1st respondent offered to sell it to the appellant for Rs.3.5

Crores; that the parties had entered into an agreement of sale

Ex.P2 dt.25.12.2019; that the appellant had issued two cheques

each for Rs.75 lakhs towards part sale consideration and both

cheques were enchased by the 1st respondent; and that the

1st respondent had agreed to complete the registration process

within 90 days.

5. It further contends that the appellant could not complete

the transaction on account of COVID-19 pandemic as lock down

was imposed; that in the last week of June, 2020, 1st respondent

visited the office of the appellant and orally stated that she is

cancelling the sale agreement dt.25.12.2019 without mentioning

any reasons and gave three cheques for Rs.50 lakhs each,

asking the appellant to present the cheques in the last week of

July, 2020; that in the meantime, appellant came to know that

the 1st respondent had executed a registered sale deed Ex.P3 on

19.02.2020 in favour of the 2nd respondent. The appellant also

contended that all the cheques issued by the 1st respondent

were deposited in the account of the appellant on 22.07.2020

but they were dishonoured on the ground of insufficient funds.

6. It alleged that the sale deed Ex.P3 is a sham transaction

and it reveals that out of Rs.1.6 Crores mentioned in the alleged

sale deed, only Rs.1.47 Crores was paid to Punjab National

Bank, Lal Bazar Branch to redeem the mortgage.

7. According to the appellant, it appears that 1st respondent

from the beginning had the intention to cheat the appellant and

to cause financial loss to the appellant and it therefore prayed

for the above reliefs.

IA.No.334 of 2020

8. Along with the suit, the appellant filed IA.No.334 of 2020

under Order XXXIX Rules 1 & 2 of CPC seeking ad-interim

injunction to restrain the respondents from alienating the suit

schedule property.

9. The 1st respondent remained ex-parte in the suit.

Case of the 2nd respondent/2nd defendant:

10. The 2nd respondent however filed a written statement

disputing the contentions of the appellant and denying

knowledge of Ex.P2 Agreement of Sale.

11. He contends that inter se transaction between the

appellant and the 1st respondent appears to be a loan

transaction; that since the property was under mortgage to the

Bank, he obtained a no encumbrance certificate; and after

verification of title, he paid the entire loan amount on the

property to the bank and cleared the mortgage and then

obtained Ex.P3 sale deed;.

12. He contended that Ex.P2 Agreement of Sale is unregistered

and is also insufficiently stamped and since the appellant did

not approach the Court with clean hands and suppressed facts

about receiving amount towards cancellation of agreement of

sale, the suit should be dismissed.

13. In the Court below, appellant marked Exs.P1 to P6, while

the respondents did not mark any documents.

The order of the Court below in IA.No.334 of 2020

14. By order dt.01.06.2021, the Court below dismissed

IA.No.334 of 2020.

15. It observed that only Rs.1.5 Crores out of Rs.3.5 Crores

was paid to the 1st respondent by the appellant and the balance

amount of Rs.2 Crores was not paid within the period of 90 days

and that no material is placed to support his contention that the

appellant was ready and willing to pay the balance amount.

16. It held that no notice was issued by the appellant stating

that he is ready and willing to perform his part of the contract.

17. It also observed that till June, 2020, the appellant did

nothing and pleaded COVID-19 pandemic and this indicated

that he was not ready with the amount of Rs. 2 Crores, which

was to be paid by March, 2020 itself.

18. It further held that no evidence is placed by the appellant

that the cheques given to it by the 1st respondent had been

dishonoured; that the sale transaction under Ex.P3 cannot be

said to be a sham transaction merely because it mentioned the

sale consideration as Rs.1.6 Crores, lesser than the sale

consideration mentioned in the agreement of sale Ex.P2; and 2nd

respondent had paid only Rs.1.47 Crores to the creditor bank

i.e., Punjab National Bank.

19. It held that there is no material also to show that the

1st respondent had either colluded with the appellant or with the

2nd respondent and that can only be gone into in the trial.

20. It observed that even the averments in the agreement of

sale showed that the 1st respondent had paid money to the Bank

to clear the loan and when the appellant is not ready with the

money, it is nothing but natural for the 1st respondent to sell the

property to another party like the 2nd respondent and therefore,

the transaction cannot be said to be collusive.

21. Assailing the same, this appeal is filed.

Contentions of the counsel for the appellant :

22. Counsel for the appellant contended that the order passed

by the Court below is erroneous, that any further sale by the

2nd respondent would procrastinate the litigation, and there was

balance of convenience in favour of the appellant and the

doctrine of lis pendence will not provide adequate protection as

was observed by the Court below. He also contended that the

Court below could not have held that the appellant was not

ready and willing to pay the balance sale consideration.

23. We have noted the contentions of the counsel for the

appellant.

The consideration by this Court :

24. It is undisputed that that the total sale consideration

mentioned in Ex.P2 sale agreement dt.25.12.2019 executed in

favour of the appellant by the 1st respondent is Rs.3.5 Cores and

only Rs.1.5 Crores was paid as advance, leaving a balance of

Rs.2 Crores.

25. The agreement specifically states that out of the balance

Rs.2 Crores, the appellant had to pay Rs.1.5 Crores to the

Punjab National Bank as per the outstanding loan, which the 1st

respondent took with the said bank and the balance of Rs.50

lakhs had to be paid to the 1st respondent and the entire

transaction was agreed to be completed within 90 days, and if

not, the vendee accepts and agrees to cancel the agreement.

26. As per the said agreement, the appellant was to pay Rs.1.5

Crores to the Punjab National Bank but there is no material

placed by the appellant to show that he was ready and willing to

pay this amount as well as the balance Rs.50 lakhs to the

appellant. Without even issuing a notice to the 1st respondent

stating that he is ready and willing to perform his contract

within the time fixed for this purpose of 90 days from

25.12.2019, appellant filed the suit.

27. The 2nd respondent admittedly cleared the loan to the

Punjab National Bank of Rs.1.47 Crores and obtained a

registered sale deed Ex.P3 for Rs.1.6 Crores. Since Ex.P2

Agreement of Sale was not a registered document, there is no

possibility of the 2nd respondent being aware of it.

28. Prima facie, it cannot be said that Ex.P3 is a sham

document only because lesser consideration was shown in Ex.P3

than was mentioned in Ex.P2.

29. The plea of collusion between the 1st respondent and the

2nd respondent also cannot be presumed and is a matter to be

proved during trial.

30. In this view of the matter, we do not find any prima facie

case in favour of the appellant and hold that any alienation

made by the 2nd respondent of the subject property pending suit

will abide by the result of the suit in view of Section 52 of the

Transfer of Property Act, 1882.

31. We therefore do not find any merit in this appeal and it is

accordingly dismissed.

32. However it is made clear that whatever observations

made in this order or in the impugned order passed by the Court

below are only for the purpose of deciding IA.No.334 of 2020,

and the Court below shall decide the suit uninfluenced by any of

its observations in the impugned order or by the observations

made this Court in this appeal. No order as to costs.

33. Consequently, miscellaneous petitions pending, if any,

shall stand closed.

___________________________________ M.S.RAMACHANDRA RAO, HACJ

___________________ T.VINOD KUMAR, J 24th September, 2021.

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