AO/185/2006 1/134 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD APPEAL FROM ORDER No. 185 of 2006 With CIVIL APPLICATION No. 7936 of 2006 With APPEAL FROM ORDER No. 188 of 2006 With CIVIL APPLICATION No. 8132 of 2006 For Approval and Signature: HONOURABLE MR.JUSTICE A.M.KAPADIA ================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================= COUNTRY CASTLE RESORTS PVT.LTD - Appellant(s) Versus NATVARLAL TRIKAMLAL PATEL & 1 - Respondent(s) ================================================= AO/185/2006 2/134 JUDGMENT Appearance : Appeal from Order No. 185 of 2006. Mr. S.N. Soparkar, Senior Advocate with Mr. Manav A. Mehta, for appellant. Mr. Mihir Thakore, Senior Advocate with Mr. Nandkishore Mehta for respondents. Appeal from Order No. 188 of 2006. Mr. Mihir Thakore, Senior Advocate with Mr. Nandkishore Mehta for appellants. Mr. SN Soparkar, Senior Advocate with Mr. Unmesh Shukla and Mr. Kinjal Pandya for respondent. CORAM: HONOURABLE MR JUSTICE A.M. KAPADIA Date of JUDGMENT:03-08-2006 COMMON C.A.V. JUDGMENT 1. These two Appeals from Order filed under Order 43 Rule 1 ( r ) of the Code of Civil Procedure ('the Code' for short) are directed against the order dated 30.6.2006 recorded below application Ex.5 in Special Civil Suit No.225 of 2005 by the learned 4th Additional Senior Civil Judge, Ahmedabad (Rural), at Ahmedabad by which the application filed by the appellant of Appeal from Order No. 185 of 2006 under Order 39 Rules 1 and 2 of the Code, seeking interim injunction during the pendency of the suit for restraining AO/185/2006 3/134 JUDGMENT the respondents, their agents, servants, assignees, men, executors, relatives, power of attorney, person, representatives, heirs and legal representatives, etc., with regard to the property bearing City Survey No.86/1/2 admeasuring 01-90-86 Hectare – Are, i.e., 19086 sq.mt., assessment at Rs.13.93 Ps. situated in the sim of village Gota of Dascroi Taluka of District Ahmedabad (hereinafter referred to as 'the suit land') came to be partly allowed and accordingly the respondents are directed to maintain status quo about the ownership of the suit property till final disposal of the suit and it is also held that as the appellant/plaintiff's possession is disputed one and not a legal one, ex-parte order is modified to that extent. 2. Since both these Appeals from Order arise out of the same order and with regard to the same suit land and litigating parties are also same and common question of law and facts are involved, with the consent of the learned advocates appearing for the parties, the appeals AO/185/2006 4/134 JUDGMENT are heard together finally at the admission stage and disposed of by this common order. 3. The appellant of Appeal from Order No.185 of 2006 is the plaintiff whereas the appellants of Appeal from Order No.188 of 2006 are the defendants in Special Civil Suit No.225 of 2005. Therefore, for the sake of convenience and brevity, the parties hereinafter are referred to as they are arrayed in the trial court. 4. In order to appreciate the controversy raised in these two Appeals from Order in a better perspective, it would be advantageous to refer to the factual matrix of Special Civil Suit No.225 of 2005 which is filed by the plaintiff against the defendants seeking specific performance of the agreement dated 6.2.1992 alleged to have been executed by defendant No.1 in favour of the plaintiff in respect of the suit land and also permanent injunction. (i) The plaintiff is a company registered under AO/185/2006 5/134 JUDGMENT the Indian Companies Act, 1956. Initially Pravinbhai Jasubhai Patel was acting as Managing Director of the plaintiff and thereafter Dashrathbhai Jasubhai Patel is the Managing Director of the plaintiff company. The suit land is running in the name of defendant No.1 as an owner and occupier and he had executed an agreement to sell in favour of the plaintiff on 6.2.1992. The said agreement to sell was registered in the office of the Sub-Registrar, Ahmedabad vide Serial No.2620. According to the plaintiff, the main conditions of the agreement to sell entered into between the plaintiff and defendant No.1 are as follows: (A) The sale price of the suit land is fixed at Rs.15/- per sq. ft. totaling to Rs.3,01,290.00. Out of the said sale price, the plaintiff has paid to defendant No.1 Rs.15,000/- vide cheque No.451151 dated 6.2.1992 drawn on Dena Bank. (B) As mentioned in the conditions of the agreement to sell, it is for the plaintiff to AO/185/2006 6/134 JUDGMENT obtain permission under the Urban Land (Ceiling & Regulation) Act, 1976 ('the ULC Act' for short) and Bombay tenancy and Agricultural Lands Act ('the Tenancy Act' for short) and the permission from Ahmedabad Urban Development Authority ('AUDA' for short) and the permission of for Non- Agricultural ('NA' for short) use of the land. However, it is the responsibility of defendant No.1 to offer necessary signatures, witnesses, applications, replies, verification, declaration, bonds, etc., for the said work. The term of the agreement to sell is decided to be nine months from obtaining all permissions including the ULC permission. (ii) It is further case of the plaintiff that defendant No.1, after executing the agreement to sell in favour of the plaintiff and after obtaining all remaining amount of the sale consideration, handed over the clear, vacant and peaceful possession of the suit land, as a part AO/185/2006 7/134 JUDGMENT performance of the agreement, to the plaintiff for carrying out construction and development and thus the plaintiff possesses the clear possession of the suit land. It is also the case of the plaintiff that it had obtained necessary development permission and had got the plan sanctioned from AUDA to construct Farm House on the suit land and thereafter the plaintiff has constructed a Farm House on the suit land at its own cost. (iii) The Deputy Collector, Viramgam Prant, Ahmedabad had issued notice and initiated proceedings with regard to the construction, wherein also the plaintiff had remained present and participated in all necessary proceedings and on account of the said proceedings, the Deputy Collector, Viramgam Prant, Ahmedabad had withdrawn the notice. (iv)It is the case of the plaintiff that it was and is ready and willing to purchase the suit land as per the conditions of the agreement to AO/185/2006 8/134 JUDGMENT sell but that defendant No.1, after executing the agreement to sell in favour of the plaintiff, did not comply with the conditions appropriately by not initiating any proceedings to obtain permission under the ULC Act, Tenancy Act and for NA permission. Defendant No.1 had not given necessary signatures, signatures in bonds, applications, etc., and thus no permission was granted because of the fault of defendant No.1 and as a result thereof the specific execution of the agreement to sell could not take place. (v) The plaintiff, time and again, requested defendant No.1 to acknowledge the remaining sale consideration after fulfilling the conditions of the agreement to sell and to execute a registered sale deed in favour of the plaintiff. In response to the requests of the plaintiff, defendant No.1 had given false trust and assurances and had passed the time. Defendant No.1 had never ever denied the plaintiff to execute the sale deed, nor had initiated any action for taking the possession of the suit land back from the AO/185/2006 9/134 JUDGMENT plaintiff nor defendant No.1 had ever sent any notice or letter in this regard. (vi)As per the case of the plaintiff, it has come to its knowledge that defendant No.1 had on 8.12.2005 forged an absolutely false sale deed in respect of the suit land in the name of defendant No.2 and the said sale deed is utterly false, illegal, void ab-initio, nullity and without any consideration. According to the plaintiff, there is very close connection and relationship between defendant No.1 and 2 and defendant No.2 and Pankajbhai Patel, son of defendant No.1 are staying together by virtue of Maitri Karar (Friendship Agreement) and in this manner, defendant No.1 and 2 have, only with a view to make a show, forged the sale deed. No amount was paid and the said sale deed was without consideration and, therefore, it is unenforceable. It is the case of the plaintiff that the possession of the suit land has not been transferred by the way and mode as stated in the said sale deed. According to the plaintiff, when AO/185/2006 10/134 JUDGMENT there is an agreement to sell executed by defendant No.1 in favour of the plaintiff and possession of the suit land is handed over to it, defendant No.1 had no right, title or locus standi to execute the sale deed in favour of defendant No.2. Therefore, according to the plaintiff, defendant No.2 has not acquired any right, title or possession of the suit land by virtue of the said sale deed. (vii) It is further case of the plaintiff that the plaintiff has strictly complied with all the conditions of the agreement to sell. However, defendant No.1 has committed breach of the conditions by executing a false sale deed dated 8.12.2005 in favour of defendant No.2 and, therefore, the plaintiff contacted defendant No.1 but defendant No.1 gave evasive reply and refused to execute the sale deed and he gave a clear threat that he will somehow or the other create muddle by making more transfers in collusion with defendant No.2 and defendant Nos.1 and 2 also gave threat to snatch away the AO/185/2006 11/134 JUDGMENT possession of the suit land from the plaintiff. (viii) The plaintiff, therefore, filed the suit for the following reliefs: (A) Be pleased to issue decree of specific performance of contract in favour of the plaintiff and against defendant No.1, directing defendant No.1 to execute a registered sale deed in respect of the suit land as mentioned in para-1 of the suit in the name of the plaintiff by specific performance of the registered agreement to sell bearing Registration No.2620 executed on 6.2.1992 by defendant No.1 in favour of the plaintiff; AND/OR if defendant No.1 does not execute registered sale deed in the name of the plaintiff as per the order of the Hon'ble Court, then be pleased to get executed the sale deed by court commissioner in favour of the plaintiff. AO/185/2006 12/134 JUDGMENT (B) Be pleased to pass an order declaring the Registered Sale Deed dated 8.12.2005 entered into between defendant No.1 and 2 in respect of the suit land as mentioned in para-1 of the suit to be illegal, without any consideration, nonfeasance, void ab-initio and thereby cancel the same. (C )Be pleased to pass permanent injunction order, permanent in nature, in favour of the plaintiff and against the defendant No.1, restraining the defendants or their servants, agents, assignees, persons, executors, relatives, attorneys, transferees, representatives, lineage, guardian, heirs, etc., from transferring, assigning or alienating the suit land as mentioned in para-1 of th suit to any third person by way of sale, mortgage, gift or otherwise; or from making objection, hindrance or interference in the peaceful occupation and possession of plaintiff in the suit land' or from creating any right, lien, charge, or liability of any AO/185/2006 13/134 JUDGMENT individual, institute or bank over the suit property and from executing or got executed any writings, deeds or documents in respect of suit property. (D) Be pleased to award the costs of this suit from defendant No.1. (E) Be pleased to pass such other and further relief/s as may be deemed fit and proper to this Hon'ble Court. (ix)Along with the suit, the plaintiff has also filed application Ex.5 under Order 39 of the Code seeking interim relief against the defendants. In the said application the plaintiff has submitted almost similar and identical contentions which have been averred in the plaint. It is also averred in the application that the plaintiff has a prima facie case and balance of convenience tilts in its favour and against the defendants and if the injunction is not granted then irreparable loss, not capable of being AO/185/2006 14/134 JUDGMENT compensated in terms of money, will be caused to it and on the other hand if the injunction as prayed or is granted the defendants will not suffer any loss or injury. Therefore, it is the case of the plaintiff that it is entitled to interim relief as prayed for in the application Ex.5. (x) In the application Ex.5, the plaintiff has prayed for the following interim relief: (A) Be pleased to pass ad-interim injunction order till the final disposal of the present suit in favour of the plaintiff and against defendant No.1, restraining the defendants or their servants, agents, assignees, persons, executors, relatives, attorneys, transferees, representatives, lineage, guardian, heirs, etc., from transferring, assigning or alienating the suit land as mentioned in para -1 of the suit to any third person by way of sale, mortgage, gift or otherwise; or from making objection, hindrance or interference AO/185/2006 15/134 JUDGMENT in the peaceful occupation and possession of plaintiff in the suit land; or from creating any right, lien, charge, or liability of any individual, institute or bank over the suit property and from executing or got executed any writings, deeds or documents in respect of suit property. (B) Be pleased to award the costs of this suit from defendant No.1. (C )Be pleased to pass such other and further relief/s as may be deemed fit and proper to this Hon'ble Court. 5. The learned trial Judge, after hearing the learned advocate of the plaintiff, has vide order dated 17.12.2005, granted ex-parte ad-interim injunction by directing the defendants to maintain status quo with regard to the suit land till 5.1.2006. 6. On service of summons, defendant Nos.1 and 2 AO/185/2006 16/134 JUDGMENT entered their appearance through their respective advocates and they filed separate reply against the plaint as well as against the application Ex.5. 7. Defendant No.1 filed his reply at Ex.24 wherein, inter alia, it has been stated that the suit as well as the application is barred by suppression of material facts and, therefore, the plaintiff is not entitled to any equitable relief. It is the case of defendant No.1 that the plaintiff has filed the suit on 17.12.2005 and obtained ex-parte ad-interim injunction on the same day and thereafter the Court Commissioner appointed by the Court issued the notice which came to be served on him at 8.00 A.M. on 27.12.2005 and the commission work was executed and thus sufficient time was not given to defendant No.1. According to defendant No.1, the report of the Court Commissioner clearly shows that a false report has been prepared in collusion with the plaintiff with a view to create evidence in favour of the plaintiff. After AO/185/2006 17/134 JUDGMENT execution of the commission work, the plaintiff, with the help of anti-socials, tried to harass him in order to snatch away the suit land and in spite of there being an order of status quo, they tried to make several different constructions after the commission work was over and thereby the plaintiff has committed contempt of court. (i) It is further stated that defendant No.1 was the administrator and possessor of the suit land which is situated within the sim of village Gota, Taluka Dascroi, District sub-District Ahmedabad. The suit land is situated at the prima location after Sarkhej-Gandhinagar road came into existence and as there are number of clubs, hotels, restaurants, etc., on this road, Pravinbhai, one of the family relatives and fast friend of defendant No.1, suggested in the year 1991 that as he has more agricultural land, he has to make a farm house and also advised him to make a farm house as such it can be considered as center point. Defendant No.1 felt that the suggestion of Pravinbhai was proper and made up AO/185/2006 18/134 JUDGMENT mind to construct a farm house. After some time, Pravinbhai also expressed a view to establish his company and thereby intended to start the business of developing lands by establishing a company. Thereafter, as per the talks with Pravinbhai, defendant No.1 got prepared the plans by a conversant person and got the development permission from AUDA on 30.11.1991 for constructing a farm house. Pravinbhai thereafter informed him that he has established a company registered under the Indian Companies Act, 1956 in the name and style of “County Castle Resort Private Limited” on 5.12.1991 and he is the Managing Director of the company and other Directors of the company are his family members. Pravinbhai also stated that the actual running of the company will take long time and if defendant No.1 helps him by virtue of friendship, the company will be working properly. Therefore, on 6.2.1992 defendant No.1 agreed to sell his farm house for the development and sale to the plaintiff and executed a registered banakhat without possession. According to defendant No.1, AO/185/2006 19/134 JUDGMENT at the time of execution of the said banakhat, only Rs.15,000/- was taken under the guise of friendship and it is also clarified that they are farmers and if any proceeding takes place against them by the Government under the ULC Act in future that will adversely affect their reputation which cannot be tolerable. Only after the permission under the ULC Act and other permissions were obtained by Pravinbhai the sale deed will have to be executed. It is clearly submitted by defendant No.1 that as per the agreement to sell dated 6.2.1992, defendant No.1 has got only Rs.15,000/- till today. It is also stated that as per the terms and conditions of banakhat, the possession of the suit land was never handed over to the plaintiff. It is the case of defendant No.1 that after execution of the said agreement to sell, the plaintiff company has not made any correspondence with defendant No.1 regarding the permission. At the time of executing the banakhat, under the guise of obtaining necessary permission under the ULC Act on behalf of the plaintiff company, Pravinbhai AO/185/2006 20/134 JUDGMENT Jasubhai Patel got obtained signatures of defendant No.1 on the blank papers and informed him that he has started the procedure to obtain necessary permission from the competent authority but it is clearly stated that from 31.3.1999 till the ULC Act has been repealed and thereafter within nine months i.e., 30.12.1999 the plaintiff has not got obtained any permission nor he has given in writing to defendant No.1. Moreover, within the expiry period of banakhat, i.e., seven and half years, no notice has been issued to defendant No.1 by the plaintiff nor it has tried to get the sale deed executed and thereby as the date of agreement to sell dated 6.2.1992 has come to an end on 30.12.1999, the amount of Rs.15,000/- received as earnest money was forfeited by defendant No.1. The said condition was the main condition of the agreement and thereby it was the essence of contract. The said banakhat was executed for commercial cause and defendant No.1 is a farmer having agricultural land of old tenure and as the suit land is also of agricultural land and also of old AO/185/2006 21/134 JUDGMENT tenure, it is required to obtain N.A. permission, No Objection Certificate and necessary permission under the Bombay Land revenue Code but it does not appear that the plaintiff might have taken any effective steps for the same. Therefore also after execution of the said banakhat, from the very beginning the plaintiff was not eager to get executed the sale deed and blank papers on which the plaintiff has obtained the signatures of defendant No.1 with a view to move applications for necessary permissions under the ULC Act do not appear to have been used and such permissions have yet not been received. (ii)According to defendant No.1, in the audit reports produced by and on behalf of the plaintiff company before the Registrar of Companies, the office address mentioned is of the residential address of Pravinbhai at Isanpur and the company has not yet started any business. Thus it is clear that the audit reports which have been produced by the plaintiff are of no avail. The company is registered for a resort AO/185/2006 22/134 JUDGMENT whereas the AUDA has given permission on 30.11.1991 to construct a farm house. According to defendant No.1, whatever construction had taken place at the farm house had been started by a friend of Pravinbhai and it was also according to the plans submitted and approved by AUDA and at that time defendant No.1 was in possession of the suit land and the said work remained incomplete on and from 1998 due to internal clash between the Directors of the company and the said work has got completed by defendant No.1. Thus, according to defendant No.1, the possession of the suit land was not given to the plaintiff company nor the plaintiff was in possession of the same and it can be clear from number of documents produced by defendant No.1 along with the list of documents. (iii) According to defendant No.1, after completion of the required construction, defendant No.1 applied to the Gujarat Electricity Board to give electric connection of 15 HP at the cost of defendant No.1 and obtained AO/185/2006 23/134 JUDGMENT the same in 1998 and the said farm house is and was owned by and in possession and occupation of defendant No.1 and his HUF and so the said farm house has been given to his relatives on different occasions of marriage, party, etc., in the name of N.T. Patel Farm House. (iv)It is further say of defendant No.1 that the birthday ceremony of the grand-son of his son Pankajbhai was performed on 15.12.2005 and it was covered under videography which is with him from which it can be seen that the plaintiff is and was not in possession or occupation of the farm house. Whenever it was necessary for Pravinbhai and his brother Dahsrathbhai to arrange any of their functions, the said farm house was given to them by virtue of friendship. The lawn, lighting situated in the open space of the suit land is of defendant No.1 himself and there is a permanent gardener who has been paid salary by him. Moreover, all taxes of Gram Panchayat and Government, revenue, Vaghoti, etc., as revised from time to time, in respect of the suit land, AO/185/2006 24/134 JUDGMENT have been paid by him and receipt thereof are with him which are produced with the list separately. It is also stated that since 2003- 2004 the Government through Gota Gram Panchayat has assessed the tax in respect of the suit land and it was increased from Rs.10,000/- to Rs.3,00,000/- against which defendant No.1 filed an appeal before the Jilla Panchayat Tax Committee, Ahmedabad on 4.6.2004 for the excess assessment of tax and defendant No.1 himself remained present at all dates fixed therein and thereafter the officer nominated by the committee visited the suit land and considering the documents on record, cancelled the increased tax by order dated 1.10.2005. It is also stated that defendant No.1 has filed objections while the suit land was included under the TP Scheme by AUDA and in respect of the suit land a suit being RCS No.369 of 1999 was filed before the Civil Judge (JD), Ahmedabad (Rural) wherein the panchnama was carried out on 26.6.1999 from which it is clear that defendant No.1 was owner and in possession and occupation of the suit land. It is AO/185/2006 25/134 JUDGMENT stated by defendant No.1 that Pravinbhai, the Managing Director of the plaintiff Company, has made an application on 17.3.2004 to the Gram Panchayat to enter their name in the Government record in respect of suit land by virtue of the said agreement to sell which is already forfeited and in the said matter