Appeal From Order No. 15 of 2013

2nd May, 2013

Petitioner Counsel: A.S. KHANDEPARKAR with LOKESH ZADE I/b. KHANDEPARKAR & ASSOCIATES
Respondent Counsel: V.B. NAIK, Sr. Adv. i/b. S.D. PATIL

Cases Cited:
Wander Ltd. Vs. Antox India Pvt. Ltd., 1990 Supp. (1) SCC 727 [Para 6]
Mrs. Saradamani Kandappan Vs. Mrs. S. Rajalakshmi, 2011 ALL SCR 1800 =AIR 2011 SC 3234 [Para 19]

JUDGMENT

JUDGMENT :- Admit.

By consent of parties appeal is taken up for final hearing.

2. This is a classic case showing how the glaring fraudulent tactics played by the Land Mafias in and around Mumbai and how the poor agriculturists are made to prey to the allurement of the members of such Mafias.

3. The facts giving rise to the present appeal are as under:

The defendant Nos.1 and 2 originally entered into an agreement for development with the present appellants who are the owners of the suit property with regard to an area of 46,710 sq.meters for an amount of Rs.6,75,00,000/-. The said agreement was entered into between the appellants and defendant Nos.1 and 2 (respondent Nos.14 and 15 herein) on 13th February 2008. Undisputedly, this was a registered agreement. At the time of agreement, only an amount of Rs.25 lakh came to be paid to the plaintiffs. As per the agreement, there was a schedule of payment mentioned in paragraph-2 of the said development agreement. The first of such installment was to be paid prior to 30th April 2009 and last of the said payment was to be made prior to 30th October 2010. Undisputedly, expect an amount of Rs.25 lakh not a single farthing was paid by defendant Nos.1 and 2 to the present appellants who are defendant Nos.5 to 13 in the plaint. Undisputedly, subsequently, a power of attorney was also executed by the present appellants in favour of defendant Nos.1 and 2. However, it appears that thereafter, on 20th November 2008, defendant Nos.1 and 2 unilaterally entered into a supplementary agreement with respondent Nos.16 and 17 i.e. original defendant Nos.3 and 4 thereby assigning 50% of the rights, which had accrued to them vide development agreement dated 13th February 2008, in favour of defendant Nos.3 and 4. Undisputedly, the present appellants are not parties to the said supplementary agreement and it is entered between defendant Nos.1 and 2 on one hand and defendant Nos.3 and 4 on the other hand. It appears that since defendant Nos.1 and 2 were not in a position to abide by the terms and conditions of the development agreement, a notice for cancellation of the development agreement was issued by the present appellants to defendant Nos.1 and 2 on 4th November 2009. Vide the said notice, defendant Nos.1 and 2 were informed that the development agreement dated 13th February 2008 so also power of attorney and confirmation deed both dated 24th October 2008 stand cancelled. It further appears that thereafter the cancellation deed also came to be executed between present appellants on one hand and defendant Nos.1 to 4 on the other hand. The said cancellation deed was executed on 14th January 2010. It appears that in the meantime a suit came to be filed by the present appellants being Special Civil Suit No.110/2010. The cause of action pleaded in the said suit was that though defendant Nos.1 to 4 in the present suit had entered into a cancellation deed with respect to the suit property with the appellants it had come to the knowledge of the appellants (plaintiffs in that suit) that defendant Nos.1 and 2 are dealing with the suit property with third parties. The said suit was filed on 22nd February 2010. It appears that during the pendency of the said suit defendant No.2 entered into an agreement with the plaintiffs in the present suit on 25th May 2011 transferring 50% of the rights, which had accrued to him vide development agreement dated 13th February 2008, for a consideration of Rs.15,00,000/-. It further appears that, subsequently, the suit filed by the present appellants came to be disposed of in terms of the consent terms which were recorded on 16th September 2011. As per the consent terms, it is specifically averred that defendant Nos.1 to 4 had no right and title in the property and further that an amount of Rs.25 lakh, which was received by the present appellants, was duly returned to the said respondents. In the said consent terms, it is also specifically stated that the notional possession taken by defendant Nos.1 to 4 has been returned to the appellants/ defendant Nos.5 to 13 (plaintiffs in that suit).

4. Claiming that the consent terms in the suit between defendant Nos.5 to 13 (appellants herein) and defendant Nos.1 to 4 (respondent Nos.14 to 17 herein) were a fraudulent one, the present suit came to be filed by the plaintiffs who are respondent Nos. 1 to 13 herein. It is averred in the said suit that the plaintiffs having put in possession of the suit property by defendant Nos.1 and 2 certain rights have been created in their favour. Along with the plaint, an application for temporary injunction (Exh.5) also came to be filed praying for an order restraining the present appellants from interfering with the possession of the plaintiffs and for further injunction restraining the present appellants from creating third party rights. The said application is allowed. Being aggrieved thereby the present appeal.

5. Shri Khandeparkar, learned counsel appearing on behalf of the appellants submits that the learned trial Judge has grossly erred in granting injunction. He submits that the transaction between defendant No.2 on one hand and plaintiffs in the present suit on the other hand is nothing but a sham and bogus document. Learned counsel submits that learned trial Judge has failed to take into consideration that the plaintiffs have no prima facie case, leave aside the test of balance of convenience and irreparable injury in their favour. Learned counsel, therefore, submits that the impugned order is not sustainable.

6. Shri Naik, learned senior counsel appearing on behalf of respondent Nos.1 to 13, on the contrary, submits that the learned trial Judge has rightly appreciated the documents on record. Learned counsel submits that learned trial Judge has rightly taken into consideration that in view of the registered documents which are in favour of the plaintiffs, no weightage should be given to the cancellation deed which is an unregistered document. Learned counsel further submits that, as a matter of fact, in the suit filed by the present appellants, the present appellants were very well aware of the transaction between defendant No.2 and present plaintiffs. Learned counsel, therefore, submits that the learned trial Judge taking into consideration factors governing grant of injunction has rightly granted the injunction. Learned counsel submits that in view of the judgment of the Apex Court in the case of Wander Ltd. v/s Antox India Pvt Ltd. reported in 1990 Supp.(1) SCC p.727, the scope of jurisdiction of this Court under order XLIII rule 1(r) of Code of Civil Procedure, 1908 (C.P.C.) is very limited. Learned counsel submits that unless this Court finds that the view taken by the Trial Court is either perverse or impossible, this Court should not interfere with the view taken by the trial Court.

7. In the alternative, Shri Naik submits that the ad-interim order was initially granted on 29th September 2011. The same was confirmed by the impugned order dated 20th November 2012 and as such the injunction which is operating for more than one and half years should not be upset by this Court. Learned counsel submits that in the interest of justice, the parties be directed to maintain status-quo and the suit be directed to be disposed off within a specified period.

8. In normal circumstances, I would have accepted the request made by Shri Naik, since the order of injunction is operating for a period of more than one and half years. However, taking into consideration the glaring facts and modus operandi operated by defendant No.2 herein and present plaintiffs, I find that this is a fit case wherein this Court is required to interfere with the impugned order. Equally, I am aware of the limitation of scope of interference in an appeal from order under order 43 rule 1(r). I am aware of the limited scope of jurisdiction under order XLIII rule 1(r) of C.P.C. Unless the view taken by the trial Court is found to be perverse or impossible, it is not permissible for this Court to interfere with the order of the trial Court. Equally, merely because this Court finds that other view is more probable, it is not possible for this Court to substitute the view of the trial Court with its own view.

9. In the present case, it would clearly be seen that in February 2008 i.e. in the beginning of the year 2008 itself defendant Nos.1 and 2 agreed to develop the suit property of the present appellants for an amount of Rs.6,75,00,000/-. Out of the agreed amount, only an amount of Rs.25 lakh was paid initially. As already discussed hereinabove, the entire consideration was to be paid on or before 30th October 2010. It is also not in dispute that except initial amount of Rs.25 lakhs not a single pie is paid to the appellants by defendant Nos.1 and 2. As such, the appellants were required to issue notice of cancellation of the development agreement to defendant Nos.1 and 2. It further appears that defendant Nos.1 and 2 without bringing it to the notice of the present appellants had also created third party rights in respect of the suit property in the intervening period in favour of defendant Nos.3 and 4. However, it appears that all defendant Nos.1 to 4 by a cancellation deed dated 14th January 2010 agreed for cancellation of development agreement dated 13th February 2008 and the power of attorney and confirmation deed both dated 24th October 2008. Vide cancellation deed, which is on record and which is duly signed by defendant Nos.1 to 4, it has been specifically agreed that all the earlier documents shall stand cancelled. Defendant No.2 has specifically agreed in the said cancellation deed that, he will not do anything on the basis of the power of attorney which stood cancelled. Vide the document executed on the same date, defendant Nos.1 to 4 have handed over the possession of the suit property to the present appellants.

10. It is to be noted that coming to know about the attempts made by defendant No.2 for creating third party rights in the suit property, a suit came to be filed by the appellants on 22nd February 2010. It appears that during the pendency of the said suit, defendant No.2 executed an agreement with the present plaintiffs for transferring the rights which, according to him, were reserved vide supplementary agreement dated 20th November 2008 executed by defendant Nos.1 and 2 on one hand and defendant Nos.3 and 4 on the other hand. It is interesting to note that vide the said agreement dated 25th May 2011 defendant No.2 has agreed to transfer the rights for an amount of Rs.15 lakh, the value of which according to defendant No.2 in the beginning of the year 2008, was not less than Rs.3,37,50,000/- being 50% of the total consideration of Rs.6,75,00,000/-. It is to be noted that in the said agreement itself, which is a registered document, a reference is made to the Special Civil Suit No.110/2010 filed by the present appellants. There is a specific averment that the present plaintiffs have agreed to purchase the suit property, subject to the decision of the said civil suit and that the entire responsibility regarding outcome of the said civil suit would be on the plaintiffs.

11. It appears that defendant No.2, subsequently, along with defendant Nos.1, 3 and 4 compromised the matter between appellants and themselves and, as such civil suit which was filed by the present appellants being Special Civil Suit No.110/2010 culminated in the consent decree. The terms of the consent decree would clearly show that defendant Nos.1 to 4 on one hand and the present appellants on the other hand agreed that defendant Nos.1 to 4 have no right, title and interest in the suit property and the appellants may deal with the suit property in any manner they would like. It is further pertinent to refer to clause No.6 of the consent terms; wherein defendant No.2 has alleged a fraud played by the present plaintiffs. According to defendant No.2, the present plaintiffs have played fraud upon him in getting the agreement dated 25th May 2011 executed.

12. In totality of the circumstances, it can clearly be seen that all these litigations are the creature of defendant No.2. Defendant Nos.1 and 2 in February 2008 itself agree for development of the suit property, for a consideration of Rs.6,75,00,000/-. They get power of attorney executed in their favour. Defendant Nos.1 and 2 without consent and knowledge of the present appellants, enter into a supplementary agreement with defendant Nos.3 and 4. Since defendant Nos.1 to 4 failed to pay a single farthing except the earnest amount of Rs.25 lakh, the appellants were required to issue notice for cancellation of development agreement, power of attorney and confirmation deed. It appears that thereafter defendant Nos.1 to 4 agreed for execution of cancellation deed. Accordingly, cancellation deed is executed on 14th January 2010. After execution of cancellation deed, defendant Nos.1 to 4 handed over the possession of the suit land to the present appellants. Defendant No.2, thereafter, in spite of knowledge of filing of the suit by the appellants in February 2010, during pendency of the said suit entered into an agreement thereby transferring 50% of the rights in favour of the present plaintiffs for Rs.15 lakh, which rights, according to defendant No.2, were reserved by him in view of supplementary agreement. However, defendant No.2 is cautious enough to inform the present plaintiffs regarding pendency of the suit being Special Civil Suit No.110/2010. Defendant No.2 gets a term agreed by the present plaintiffs that the plaintiffs would be entirely responsible for the outcome of the said suit. Thereafter defendant Nos.1 to 4 compromise the matter with the present appellants, as a result of which, the suit filed by the present appellants culminated into a consent decree. It, thus, prima facie appears that the defendant No.2 along with present plaintiffs have played a fraud on the appellants by executing agreement dated 25th May 2011.

13. It can, thus, clearly be seen that when the present plaintiffs entered into an agreement dated 25th May 2011, they were very well aware of the suit filed by the appellants, which was filed in the month of February 2010. The present plaintiffs were, therefore, very well aware of the pendency of the litigation and not only that, but they had taken the responsibility upon themselves regarding outcome of the suit. At least prima facie, the document dated 25th May 2011 appears to be a sham and bogus document. The property which was worth more than Rs.3,37,00,000/- in the month of February 2008 is attempted to be sold for a paltry amount of Rs.15 lakh. It is a common knowledge that the rates of the property in and around Mumbai are accelerating at supersonic speed. So far, I have not come across a single case wherein the rate of the property is decreased and, that too, to the extent of Rs.15 lakh from Rs.3,37,00,000/-.

14. I am of the considered view that the learned trial Judge has failed to consider the matter from correct perspective. The learned trial Judge ought to have taken into consideration the fact that the development agreement executed in the month of February 2008 so also the power of attorney and the confirmation deed were already cancelled, firstly, by cancellation notice and, secondly, by cancellation deed duly executed by defendant Nos.1 to 4. Learned trial Judge ought to have taken into consideration that the present plaintiffs were aware of the suit filed by the present appellants against defendant Nos.1 to 4. The learned trial Judge failed to take into consideration not only that but also that in the document executed between the present plaintiffs and defendant No.2 there is a specific mention about the suit filed by the present appellants and that the present plaintiffs have accepted that the the entire responsibility of the outcome of the said suit would be upon the said plaintiffs. The learned trial Judge, therefore, ought to have considered that the plaintiffs with open eyes had decided to purchase the property from defendant No.2 knowing very well that the right, if any, of defendant No.2 was under great shadow of doubt. The learned trial Judge also ought to have taken into consideration the effect of the consent decree. In my considered view, all these factors should have been taken into consideration by the learned trial Judge before coming to the conclusion that the plaintiffs have made out a prima facie case.

15. Apart from that, prima facie case is not the only consideration which would weigh with the Court while granting an order of injunction. In addition to prima facie case, the Court is also required to take into consideration the test of balance of convenience and irreparable injury.

16. The learned trial Judge ought to have taken into consideration that defendant Nos.1 and 2 have failed to honour the terms of the development agreement and as such the said agreement was terminated. The initial amount of Rs.25 lakh paid by defendant Nos.1 and 2 is already refunded by the appellants as could be seen from the cancellation deed and the consent decree. The impugned order passed by the learned trial Judge has injuncted the present appellants from dealing with the suit property, without a farthing coming to their pocket. As against this, due to fraudulent tactics adopted by defendant No.2 on one hand and the present plaintiffs on the other hand, the property, which was having value of more than Rs.3,37,00,000/- in February 2008, was sought to be sold in favour of the plaintiffs for a paltry amount of Rs.15 lakh. The very nature of transaction itself casts a doubt regarding genuineness of the case. In any case, the plaintiffs have entered into the said agreement with knowledge of the suit filed by the present appellants and had further agreed to take the responsibility on themselves of the outcome of the said suit. The plaintiffs were very well aware that defendant No.2 had transferred something with regard to which he had no right . It is like a layman agreeing to sell the Victoria Terminus Station to a third party.

17. As already discussed hereinabove, the entire litigation is a product of fraudulent and heinous conduct of defendant No.2. The poor agriculturists are being made to prey to the allurement of the huge amount and thereafter forced to return the initial amount which had come to their pocket. Due to cantankerous conduct of the person like defendant No.2, the properties of the poor agriculturists are subjected to litigation and without they receiving a single pie, they are injuncted from dealing with their own properties.

18. As already discussed hereinabove, though in normal circumstances I would not have interfered with the impugned order but since this is a case of a fraudulent act of the Land Mafias coming to the court feet, I have ventured into deciding this appeal.

19. It is further to be noted that as per the development agreement entire amount was to be paid on or before 30th October 2010. The Apex Court in the case of Mrs.Saradamani Kandappan v. Mrs.S.Rajalakshmi, AIR 2011 SC 3234 : [2011 ALL SCR 1800] has held that taking into consideration the supersonic speed at which the rate of the properties is increasing, if there is specific period mentioned in the agreement for making the payment, such a contract time has to be treated as essence of the contract. In that view of the matter, in my considered view, defendant No.2 had no right of whatsoever nature, firstly, on non-compliance of the terms agreed and, in any case, after the execution of the cancellation deed which was duly executed on 14th January 2010. I find that the learned trial Judge has utterly failed to consider the case from correct and proper perspective.

20. In the result, appeal is allowed. The impugned order is quashed and set aside.

21. At this stage, Shri Naik, learned senior counsel for the respondent Nos.1 to 13 requests for stay of this order. Learned counsel for the appellants oppose this prayer.

22. Taking into consideration the conduct of the parties, it is not a fit case wherein the plaintiffs are entitled to any discretionary relief. The prayer is, therefore, rejected.

Appeal allowed.