1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.1787 OF 2009 IN SUIT NO.1266 OF 2009 Shrichand Vishandas Raheja .. Plaintiff Versus Purshottam Vishandas Raheja & Ors. .. Defendants. Mr.Janak Dwarkadas, Senior Advocate with Sharan Jagtiani with J.S.Soloman i/b. Soloman & Co. for plaintiff Mr.Virag Tulzapurkar, Senior Advocate withVibhav Krishna i/b. Juris Consillis for defendant Nos. 1 and 2 Mr.C.D.Patel i/ b. N.S.Fadia for defendant No.4. CORAM : S.C.DHARMADHIKARI, J. DATE : 9th September 2009. P.C.: 1] The plaintiff has filed the suit for permanent order and injunction of this Court restraining defendant Nos. 1 and 2, their servants and agents from directly or indirectly acting or holding themselves out as attorneys or agents of the plaintiff or dealing with any of the properties or business of the plaintiff, including the immovable property more particularly 2 described in prayer clause (a) of the plaint. By prayer clause (b) of the plaint, plaintiff is seeking further permanent order and injunction restraining the defendant Nos. 1 and 2 by themselves, their servants etc. from directly or indirectly entering upon the property. The final reliefs are in terms of prayer clauses (c) and (d) and that these defendants should be called upon to deliver the documents, correspondence and records relating to the power of attorney and also render true and faithful accounts while acting as the Attorneys or agents of the plaintiffs on the basis of willful default. 2] As far as the notice of motion is concerned, the plaintiff seeks all the aforesaid reliefs at the interlocutory stage. 3] The plaint averments are based upon the fact that the plaintiff and defendant No.1 are related, being real brothers. The plaintiff No.2 is the son of plaintiff No.1 whereas the other defendants are private/nationalised banks. It is the case of the plaintiff that under an Indenture of Conveyance dated 27th March 1981 registered with the sub-Registrar of Mumbai and executed by the Vendors as confirming parties, the 3 immovable property more particularly described in para 2 of the plaint, came to be transferred and conveyed. The consideration under the conveyance was paid by the plaintiff and since the execution and payment thereunder, the plaintiff has become owner of this immovable property. In these circumstances, not only the land but the structure on the same came under the ownership rights of the plaintiff. The plaintiff demolished the Bungalow standing on the portion of the property and constructed a residential building named Arihant Towers consisting of ground plus 12 upper floors in accordance with the plans approved by Municipal Corporation on or about 30th November 1981 and obtained occupation certificate on 29th April 1987. All flats have been sold and a cooperative society has also been duly registered. 4] In para 4 of the plaint it is stated that savings bank account was opened in the name of plaintiff and defendant No.1 with the defendant No.3 bank. The bank account was opened principally for carrying on the operations relating to this immovable property and development thereof. It is then contended that a no objection certificate was obtained from B.M.C. for redevelopment of the remaining portion of the property under 4 D.C.Regulation No.33(7) and on 6th September 1996, the plaintiff obtained sanction of Municipal Corporation for construction of a residential building and structure for accommodation of the tenants of the chawl and shops on the property. The plaintiff constructed Building "A" and obtained occupation certificate in respect thereof on 23rd September 1999. Thereafter, he constructed, he constructed Building No.1 and obtained occupation certificate in May 2003. The plaintiff has constructed 12 shops bearing Nos.8 to 19 in Building No.2 and obtained occupation certificate in respect thereof in 2003. According to plaintiff, construction of shop Nos. 1 to 7 in Building No.2 has not yet started. 5] It is stated that plaintiff obtained approval of Municipal Corporation for residential building consisting basement, stilt and 18 upper floors on another portion of the said property and obtained I.O.D. on 8th April 2002 and commencement certificate dated 30th April 2003. He commenced construction of building which is now named Siddhagiri. Except 7th and 14th floors, the building would consist three residential flats on each floor whereas these two floors have two residential flats. There are in all 52 residential flats in the said building under construction 5 apart from making provisions of car parking etc. It is stated that plaintiff has entered into an agreement for sale of 23 flats out of 52 flats under construction in the said building. 6] The plaintiff states that he has been suffering from spine problems since 1999 and undergone further surgeries with the result his movements are restricted. The plaintiff and his wife have two issues viz., two daughters. The first defendant is the only surviving brother of plaintiff. 7] On 8th August 2000 the plaintiff executed a power of attorney authorising his wife Asha and his brother, defendant No.1 jointly and severally to perform various acts, deeds, matters and things, to exercise various powers and authorities on behalf of plaintiff as stated therein. Annexure C is a copy of this power of attorney. 8] Thereafter, the plaintiff sets out details of the bank accounts opened jointly with the defendant No.1. He also refers to a power of attorney dated 21st September 2005 and a copy of this power of attorney is annexed as Annexure D. There is a third power of attorney dated 24th 6 October 2008 authorising the defendant No.1 to give evidence on behalf of plaintiff. 9] It is alleged that these power of attorneys were executed on the basis of the trust and faith reposed by the plaintiff in his brother - first defendant. However, contrary to the mandate thereof, the plaintiff noticed that the first defendant has made certain investments which were never approved. These investments have been made from funds in the joint accounts. These withdrawals/ investments being unauthorised, the plaintiff addressed a letter dated 4th March 2009 revoking all power of attorneys and calling upon the defendant Nos. 1 and 2 not to exercise any authority or power pursuant to the same or deal with any of the business or the properties. The plaintiff called upon first defendant to return to him all papers in relation to the project on the Mazgaon property. It is stated that even the banks have been informed with regard to this revocation. Thereafter, a public notice was also issued as the plaintiff was informed by one of the bankers that the account being joint account any revocation or variation in the nature of instructions would require a writing from both holders of the said account or a court's order. Noticing 7 that the accounts are still being operated that the public notice has been issued and further correspondence is referred to. It is in such circumstances and reiterating the above position and urging that the first defendant being an agent, upon revocation would have no authority to represent the plaintiff or carrying on any acts or deeds in relation to the immovable property, that the instant suit has been filed. 10] The notice of motion was moved but at the ad-interim stage it was stated that some settlement talks are going on. However, no ad-interim reliefs were sought and finally the parties agreed that the motion itself be heard and disposed of. Even during the course of its hearing and today as well I indicated to both sides as to why the instant dispute cannot be settled amicably. It was also indicated that certain without prejudice acceptable proposals could be recorded so that the interest of both sides can be protected till the suit is heard and disposed of. However, it appears that it is not possible. 11] Mr.Dwarkadas, learned Senior Counsel appearing for plaintiff contended that the factual position is more or less undisputed. There is 8 no substance in the plea now raised as an after thought that the authority is not that of an Agent but the power of attorney creates interest in the immovable property in favour of defendant No.1. Since the power of attorney is coupled with interest, according to the first defendant, there is no question of any revocation being binding on him. Mr.Dwarkadas submits that the second plea raised is with regard to some family arrangement. This family settlement/ partition is admittedly of 30th June 1992. At no stage has the first defendant ever asserted that this family settlement/ partition is the basis of the arrangement and that is how the interest in the property is created in his favour. He has proceeded on the basis that he is an agent of the plaintiff who is the Principal. He never asserted any rights under this family settlement/ partition from 1992 till date. He could not have now raised this issue because assertion of rights on the basis of this is a belated and stale claim and is barred by limitation. Apart thereof, it is not in dispute that the conveyance is executed exclusively in favour of the plaintiff. The documents executed in favour of the plaintiff would go to demonstrate that title of plaintiff to the immovable property is not an issue. 9 12] Mr.Dwarkadas, then submits that the HUF of Vishanji Raheja father of plaintiff has come to an end. Conveyance is of 25th March 1981. The defendants are challenging title of the plaintiff to the suit property by alleging that since the plaintiff did not have the ability/ means to pay the consideration of Rs.30 lakhs in 1981, the project was funded by the father of the plaintiff and defendant No.1. However, by merely demanding particulars as to how the same has been paid by itself would not indicate that the plaintiff had no means to pay the consideration. In any event, merely because the amount has been allegedly generated by borrowings that does not take away rights which are exclusive insofar as the said immovable property. More so, when in the Income tax returns for the relevant years, the suit property has been shown as exclusively belonging to the plaintiff and he has paid the necessary expenses and derived income therefrom. Even the deed of rectification is executed by first defendant as constituted attorney of the vendors and by plaintiff as purchaser. The sale proceeds in respect of the flats which have been sold under the diverse agreements in the building Arihant Towers have been received exclusively by the plaintiff and duly reflected in his books of accounts and income tax assessments. Housing Board and all statutory 10 authorities accepted and dealt with plaintiff as owner of the building and in possession thereof. In such circumstances, there is no question of the family settlement/ partition putting an end to the rights of the plaintiff. The claims of the first defendant are contradictory and self-defeating. At no stage during the subsistence of the power of attorneys has he ever raised these issues. Defendant No.1 was all through out operating as an Agent of the plaintiff. That is how even the bank accounts have been operated and the sums deposited. There is no question of linking the estate of the father of plaintiff and defendant No.1 with the subject matter of the instant suit. If all these facts were to be true, then, the first defendant would have definitely taken steps to assert his rights in the immovable property but as the record indicates he was not taken any such steps and, therefore, the pleas raised in the detailed affidavits filed on record, cannot be accepted. The plaintiff’s wife is also named in the documents/ power of attorneys and, therefore, in the teeth of the clauses thereof, defendant No.1 should not be now permitted to urge to the contrary. Monies also belong to the plaintiff exclusively and all agreements for sale of flats have been executed by the plaintiff’s daughter acting under the power of attorney granted to her by plaintiff and not by 11 defendant No.1. Construction work at site also now cannot be completed once the power of attorney in favour of defendant No.1 has been revoked. The revocation is binding and, therefore, any attempt to operate the joint accounts or to deal with the immovable property should not be permitted, rather need to be regulated. 13] Mr.Dwarkadas has invited my attention to the list of dates and events and the brief submission of plaintiff pointing out aforesaid inconsistencies. 14] On the other hand, Mr.Tulzapurkar, learned Senior Counsel appearing for defendant Nos. 1 and 2 contended that the suit claim is totally false and frivolous. He submits that considering the close relations and that even the plaintiff not disputing the fact that the power of attorney was in favour of defendant No.1 and wife of plaintiff, goes to show that this is a case of agency coupled with an interest in the immovable property. This is not a case of Principal and Agent relationship. He has invited my attention to the conveyance deed as also the assertions of the first defendant in the affidavits which have been filed on records. 12 Mr.Tulzapurkar has also submitted that this is not a case where the defence is barred by Benami Prohibition Act as contended by Mr.Dwarkadas. This is not the case where in the immovable property the first defendant has absolutely no share. He submits that the entire development and construction activity was supervised and completed by the the first defendant. At no stage has the plaintiff ever complained about the manner in which the property came to be developed, flats sold and the entities in whose favour the same were transferred. All through out, he has been a party to the documents and deeds in that behalf. In such circumstances, at this belated stage by mere revocation of power of attorney, he cannot prevent the completion of balance works. Mr.Tulzapurkar after taking instructions submit that civil construction work is complete save and except making of ramp in the basement and putting up of elevators and lifts other works are completed. Payments to various agencies have been made by the first defendant. If at this belated stage, any interim order is passed that would not only inconvenience the parties to the suit but even third parties who have purchased the flats. In such circumstances, by appropriate conditions being imposed with regard to maintainance of accounts and submission of periodical statements, this 13 Court should deny any interim order to the plaintiff. 15] With the assistance of the learned Senior Counsel appearing for both sides, I have perused the plaint and annexures thereto. I have also perused the affidavits filed on record. The affidavits proceed on the basis that the plaintiff is a Principal and first defendant is Agent whereas the defendant No.1 asserts that the agency is coupled with interest. At the outset, it is not possible to resolve this issue conclusively at an interlocutory stage. Suffice it to state that the averments in the plaint in that behalf are denied by the first defendant. 16] First defendant has filed an affidavit on behalf of himself and defendant No.2 to oppose the ad-interim reliefs. At that stage he has raised aforesaid defences and urged that the plaintiff is guilty of suppression of material facts. He has stated that the family partition took place on 30th January 1992, whereby the suit property at Byculla came to the share of first defendant and that of his father late Vishandas Raheja. This fact is suppressed by the plaintiffs. It is stated by him that he continued to be in exclusive possession of the suit property for the last 14 several years and has been doing construction and development work. The family partition has been acted upon and substantial development and construction work has been carried out on the suit property. The original title deeds of the suit property are with defendant No.1 in his capacity as owner and continue to be so since the family arrangement of 1992 and, therefore, first defendant accuses the plaintiff of suppressing this vital fact. Merely because, the power of attorneys have been executed do not alter this position. It is stated that all the arrangements including the power of attornys and operation of bank accounts in joint name are for the purpose of facilitating development and construction work. In para 14 of the affidavit in reply the details of the family settlement have been set out by first defendant. It is his case that upon the death of the father of plaintiff and defendant No.1, the suit property came to the share of plaintiff and defendant No.1 in the ratio of 50 : 50. The 50% share in the value of the property at the time of demise of late father of plaintiff and defendant No.1 was to be taken whereby 1/5th of this share was to go to charity and balance 4/5th share was to be divided equally amongst plaintiff and defendant No.1 and two daughters whereby each of them gets 1/5th share. It is stated that the suit property was fully 15 encumbered and occupied by tenants. It has no scope for development. The defendant No.1 took efforts for re-development of the tenanted building. He spent lot of money and time to settle with the tenants and put up construction. In such circumstances, he asserts that power of attornys were executed for valid consideration and were coupled with interest. He submits that although the suit properties stood in the name of plaintiff but as per the family arrangement dated 30th January 1992 subsequent upon conveyance deed, two flats on 15th floor in Arihant Tower which was also constructed by the first defendant together with terrace, one shop, one room and six chawls together with land appurtenant thereto were allotted and entrusted to defendant No.1 and his late father Vishandas Raheja as owners, each having 50% share, right, title and interest therein. It is based upon this that the development of suit property was proposed jointly. Merely, because the conveyance deed was carrying name of plaintiff, the Plaintiff agreed that with a view to avoid incurring heavy expenses of stamp duty and payment of taxes and as the suit property was to be finally conveyed to a cooperative housing society, wherein the first defendant would be joined as confirming party, the plaintiff agreed to give power of attornys and also open joint account with 16 defendant No.1 to facilitate development and construction. 17] He submits that in the year 1996 on account of non cooperation of the plaintiff to implement family partition of 1992, the brother of plaintiff and first defendant Ramkishan initiated legal proceedings and approached the Advocates in that behalf. However, after several meetings the dispute was amicably settled and it was agreed that the late bother Ramkishan’s share must be paid inasmuch as he was given a tenanted office premises. The first defendant has also stated on affidavit that the plaintiff was not carrying on independent business in the year 1981. It was their late father who was carrying on business of finance and investments that properties were purchased/ acquired in the names of family members. The plaintiff being eldest son, the suit property was in his name and, thereafter, in the 1992 the family partition took place in which two groups were made. That is what the affidavit of first defendant states and his entire case is based on the same. The first defendant has also filed affidavits of Sharda Nichani and Asha Chabria who are sisters of plaintiff and first defendant. They have stated about the family partition. 17 18] The affidavit of Gopaldas Bhagwan Samat has also been filed in support of the case that plaintiff’s version of the power of attorney being simplicitor a authority to carry on development and construction activity under the authority of plaintiff is incorrect. 19] The plaintiff has filed an affidavit in rejoinder and as far as the contents of para 14 of the affidavit in reply are concerned, he states that there is no family settlement or partition. However, at the same time, he refers to a deed of partial partition dated 19th January 1966 executed between the father of the plaintiff and defendant No.1 and the deed of partial partition dated 29th September 1967 executed between the late father of plaintiff and defendant No.1 and plaintiff and defendant No.1. Plaintiff does not dispute that a partial partition was effected of HUF of the late father of plaintiff and defendant No.1 under which plaintiff and defendant No.1 separated from HUF of their father. Under the deed of partial partition, according to the plaintiff, which was executed between the father, mother and late brother Ramkishan, who was then minor, the late father and the brother Ramkishan separated from HUF of father. It is asserted that thereupon HUF of the father came to an end. It is asserted 18 that when the plaintiff purchased suit property in 1981, he was not member of HUF of his father. After the partition under the deed of partition dated 29th September 1967, plaintiffs’ case is that he is carrying on business either in his own individual capacity or as Karta of his own HUF consisting of defendant No.1 and his daughters. He further asserts that the suit property was purchased by him with his own funds and under an Indenture of Conveyance dated 26th March 1981 (Exh.A-1 to the plaint). He states that he has never agreed to give any share in the suit property to his father or his brother. He denies that any family settlement is arrived at between him and his father Vishandas Raheja as alleged. The father of plaintiff and defendant No.1 expired on 20th August 1994 and, according to plaintiff, he died without leaving a will. However, the following statements in the affidavit filed in rejoinder are material enough:- “I am aware that it was the desire and wish of Mr.Vishandas Raheja that one fifth of his estate should go to charity and the balance 4/5th of his estate should be divided equally amongst me and my brother defendant No.1 and our 19 two sisterrs, with each of us getting a 1/5th share in the estate of Mr.Vishandas Raheja. However, Mr.vishandas Raheja was not the owner of the suit property and did not have any share therein during his lifetime or at the time of his demise and I hve always been the sole owner of the suit property. I say that defendant No.1 or Sharda Motilal Nichani or Asha Sureshkumar Chhabria are not entitled to claim any share in the suit property as heirs of the late Vishandas Raheja or otherwise howsoever.” “.... the powerrs of attorney dated 8th August 2000, 21st September 2005 and 24th October 2008 (Exhs.C, D and E to the plaint) were executed by me (more than 8 years after the date of alleged partition of 30th January 1992) due to my ill health and because of the trust and confidence which I had in my brother defendant No.1 and his son defendant No.2 and not because the suit property had come to the share of defendant No.1 or Mr.Vishandas Raheja as alleged or otherwise. I say that the powers of attorney dated 8th August 2000, 21st 20 September 2005 and 24th October 2008 recite that I am unable to attend my affairs personally and the said powers of attorney do not even mention the suit property.” 20] In my view, it is not possible to hold at this stage conclusively as observed above, that the powers of attorney were simplicitor power to deal with the property on behalf of the plaintiff or whether they were agency coupled with interest. It is plaintiffs’ own version with regard to his title to the property which is reflected in what has been reproduced hereinabove. It is he, who has now claimed the property to be exclusively belonging to him. He submits that at