1 pps IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL APPLICATION NO. 837 OF 2008 WITH CIVIL APPLICATION NO.1764 OF 2011 IN FIRST APPEAL NO. 2 OF 1997 Shantilal Chimanlal Sheth ...Appellant/Applicant Versus Mak Estate and Property Pvt. Ltd. & Another ...Respondent Mr.J.Shekhar with Ms. Tanya Dayal and Abhishek Patil i/b. M/s. J. Shekhar & Co. for the Appellant/Applicant Mr.T.D.Deshmukh for the Respondent No.1 Mr.M.S.Karnik for the Respondent No.2 Mr.Atul Damle for the Respondent No.3 CORAM:- A.V.NIRGUDE J. DATED:- 16th NOVEMBER, 2011. P.C. 1. The facts leading to this appeal are quite peculiar and can be stated as under: In 1986, the applicant-original plaintiff entered into an agreement for sale of 2 Acre piece of agricultural land with respondent nos.1 and 2. Since the agreement was not honoured, the applicant plaintiff filed a suit for specific performance and for possession of the 2 property. The suit was decreed on 10.10.1996. The respondent no.1 filed the appeal though they were not the vendor/owners of the property. The respondent no.2 was the owner of the property. Although the appeal was filed in 1997, the respondent no.1 did not obtain any interim relief in the appeal. In 2005, the respondent no.2 (not the appellant) executed a Power of Attorney in favour of one Vadhera, who is the respondent no.3 to Civil Application No.837 of 2008. The applicant filed this Civil Application No.837 of 2008 on apprehension that respondent no.2 was likely to transfer the suit property to a third party. 2. This Court, on 5.8.2008 in Civil Application No.837 of 2008 injuncted the respondent no.2 from creating third party right etc in the suit property. After the said order was passed it remained pending till today. This order passed on 5.8.2008 was served on respondent no.2 and the respondent no.1 the appellant . Despite of this, pursuant to the Power of Attorney executed by respondent no.2 in favour of Vadhera, Vadhera sold the land to himself on 24.8.2008. On 24.9.2009, Vadhera further executed a registered development agreement in favour of a third party by name Vastu Developers and even parted with possession of the suit land. Thereafter the 3 application NO.1764 of 2011 was moved. The applicant asserts that since the respondent No.2 had in violation of the Order passed by this Court caused transfer of the suit property in favour of Vadhera, he should be penalized as provided under Rule 2A Order 3 of CPC and further an order of injunction be passed for preventing further transfer of the suit property. In the previous Applicant No.837 of 2008 the applicant had already sought an order of appointment of Receiver for protecting the suit property. 3. Having regard to these facts which are all admitted, I am of the view that the suit property should be taken in custody by removing the persons in whose possession the same is at present. When I expressed this view to the learned Counsel appearing for the parties, learned Counsel appearing for respondent no.3 Vadhera pointed out that the person in whose possession the property is at present is not before the Court and the order appointing Court Receiver would adversely affect him and the same should not be passed. Although the learned Counsel appearing for respondent Vadhera is not appearing for the party in whose possession the suit property is, apparently he is trying to prevent the court from passing an appropriate order. Indeed, if the order appointing the Receiver is 4 passed and if the Receiver is directed to take physical control the possession of the suit property, the person in whose possession the property is at present is likely to be adversely affected and therefore the suggestion given by the learned Counsel appearing for respondent no.3 Vadhera look quite attractive. However, learned Counsel appearing for the applicant placed reliance on the judgment of Division Bench of this Court in the case of Keshrimal Jivji Shah and another vs. Bank of Maharashtra and Ors reported in 2004 (3) ALL MR 214 to assert that if the transfer of the property has taken place in violation of the order of the court, the transfer is non-est and the person in whose possession the property is not required to be made party to this litigation. The observations of the Division Bench in this judgment can be quoted in support of this contention. “ 26. We cannot accept Shri Naphade’s contention that observations of the Supreme Court in the case of Surjeet Singh should be read as restricted to proceedings under Order 22 Rule 10 of C.P.C. And the same cannot be extended to defiance of injunction order issued under Order 39 Rule 1 of C.P.C. Once the issue is placed on the pedestal of public policy and the very faith of litigants in Rule of law and administration of justice, then it is not possible to make the distinction or bifurcation suggested by Shri Naphade. It would mean that consequences of nullifying such transaction not being provided by the Statute, it would not lose its legal efficacy even if it is in utter disregard to or in violation of or breach of prohibitory order or order of injunction issued by a court of law. It would mean that parties can breach and violate Court orders openly and with impunity 5 and neither they nor the beneficiaries suffer and consequences. It is time that we recognize the principle that transfer of immovable property in violation of an order of injunction or prohibition issued by Court of law, confers no right, title or interest in the transferee, as it is no transfer at all. The transferee cannot be allowed to reap advantage or benefit from such transfer merely because he is not party to the proceedings in which order of injunction or other prohibitory direction or restraint came to be issued. It is enough that the transferor is a party and the order was in force. These two conditions being satisfied, the transfer must not be upheld. If this course is not adopted then the tendency to flout orders of the courts which is increasing day by day can never be curbed. The Court exercises its powers on the foundation of respect and regard for its authority by litigating public. People would lose faith and respect completely if the court does not curb and prevent this tendency. The note of caution of the Supreme Court must be consistently at the back of everybody’s mind. Therefore, Shri Naphade is not right in the distinction which he is trying to make. 27. Equally untenable is the contention of Shri Naphade that an order of injunction will bind only the transferor in this case. It is his submission that the said order does not bind the world at large. He submits that ownership rights are neither taken away nor restricted in any manner by order of injunction or other preventive directions. He submits that the transfer in favour of his client was thus neither invalid nor illegal, leave alone null and void.. For the reasons already recorded we find it difficult to accept this contention of Shri Naphade. Decision of the Supreme Court in the case of Krishnan Kumar Narula V.s, State of Jammu and Kashmir, reported in AIR 1967 S.C.1356 has no application. There, the Supreme Court was distinguishing an order of stay from an order of injunction. The distinction was made in the context of consequences upon breach and violation of such orders. It is in that context that the Supreme Curt observed that the order of stay is qua a Court, whereas an order of injunction reaches and touches a party to the lis. These observations cannot be applied when it is noticed that during the pendency of an order of injunction, immovable property, which is subject matter of restraint or injunction, is transferred. When this court is admittedly adopted, then there is no choice but to declare the transaction as illegal. There is no question of then 6 deciding the nature and effect of the order of injunction. 28. Mr.Naphade’s submission overlooks the effect of an order of injunction. An order issuing interlocutory injunction is issued with a view to preserve and protect status quo during the pendency of the suit or litigation. The true effect of such an order is, therefore, preservation of status quo prevailing as on the date of issuance of the order. Any alteration in the status quo as prevailing and directed to be maintained by the Court of law is not permissible except with leave or sanction of Court. It is well settled that if Courts are not to honour and implement their own orders and encourage party litigants, be they public authorities , to invent methods of their own to short circuit and give a go bye to the obligations and liabilities incurred by them under orders of Courts, the Rule of law will become casualty in the process – a consequence to be jealously averted by all and at any rate by the highest courts in the State ” 4. In view of these observations which has nullified the submission of the learned Counsel for the respondent no.3 gives me ample discretion to pass necessary order in the case. 5. In addition to this, it can also be said that whatever has happened after the order of this court, dated 5.3.2008 was passed can be said to be unauthorized and illegal. 6. Let me now examine the case as alleged against respondent no.2. As said above, he did not challenge the impugned decree and obtained no order from the Appellate Court so as to get away from the brunt of the decree. The decree as above was passed in 1996. The appeal was filed in 1997. During the pendency of the appeal, to which respondent no.2 was a party, in full consciousness, in 2005 executed 7 a Power of Attorney, virtually giving away all his rights to the suit property to a third party. He could not have taken such a step because the decree had prevented him from doing so. The Power of Attorney executed by him in 2005 gave away right to sell the suit property and pursuant to such a Power of Attorney, the respondent no.3 Vadhera executed a sale deed of the suit property in 2008 after order of injunction was passed. It is therefore clear that the Respondent No.2 never cared for the orders passed by the Courts. He apparently hoodwinked the court by first executing the Power of Attorney and secondly by not preventing his attorney from acting pursuant to the Power, and after the temporary injunction was granted against him. It can also be said that the Power of Attorney was executed solely with a purpose to frustrate the decree and it can also be said that the respondent no.2 was aware that the attorney would deal with the property even after the order of injunction was passed. The respondent no.2 and Respondent no.3 Vadhera were apparently hand in glove to frustrate the impugned judgment and decree. Their third partners, the respondent no.1 had helped them by filing an appeal and keeping the appeal alive. 7. In the process, the applicant decree holder and the court were sought 8 to be made helpless. There is strong reason to believe that the respondent no.2 violated the order of temporary injunction passed by this Court and he deserves to be penalized as per the provisions of Rule 2A of Order 39. Since there is nothing on record to show that the respondent no.2 has any immovable property, the order for attachment of such a property cannot be passed today. The applicant may submit a fresh application giving list of immovable properties held by the respondent no.2 so that appropriate order can be passed. Both the applications are disposed of in terms of following order: ORDER i) The Court Receiver, High Court, is appointed as Receiver in respect of the suit property. ii) The Court Receiver shall immediately take possession of the suit property by removing whoever is found in possession of the property. Iii) Liberty is given to the applicant for seeking action under O.39 R.2A CPC in separate application. (A.V.NIRGUDE, J.) !!