1 mss APP+959 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO. 959 OF 2010 IN NOTICE OF MOTION NO. 1574 OF 2010 IN REVIEW PETITION (LODGING) NO. 57 OF 2010 IN SUIT NO. 1438 OF 2010 ALONG WITH NOTICE OF MOTION NO. 2546 OF 2010 IN APPEAL NO. 959 OF 2010 IN NOTICE OF MOTION NO. 1574 OF 2010 IN REVIEW PETITION LODGING NO.,57 OF 2010 IN SUIT NO. 1438 OF 2010 MAHMOOD PERVEZ CHOUDHARY .. APPELLANT Vs. SUNDER GHANSHAMDAS BHAGNANI & ORS. .. RESPONDENTS Mr. R. V. Sipahimalani for the appellant Ms. Gauri Godse with Anulata Saundankar i/b A. I. Patel for R-1 to 14. Mr. G. Joshi i/b S. J. Khera for R-15 & 16. 2 mss APP+959 CORAM: SMT. RANJANA DESAI & RANJIT MORE, JJ. DATED: 14/10/2010 P.C. The appellant Mahmood Pervez Choudhary is the original plaintiff in Suit No. 1438 of 2010 which was initially filed on Lodging No. 3486 of 2009. The said suit was filed against defendant 1 Smt. Manju Kukreja and defendant 2 M/s. Mahesh Associates and defendant 3 the Court Receiver, High Court, Bombay. Defendant 1 Smt. Manju Kukreja is respondent 15 and M/s. Mahesh Associates is respondent 16 and the Court Receiver is respondent 17 in this appeal. 2. Defendant 1 Smt. Manju Kukreja claims to be the sole proprietor of defendant 2 M/s. Mahesh Associates. Defendants 1 and 2 are builders and developers. 3. Suit No. 1438 of 2010 was filed inter alia for a direction to defendant 1 Smt. Manju Kukreja and defendant 2 M/s. Mahesh Associates to handover possession of Flat No. 403 (“the suit flat”) on the 4th floor in the building known as Mangal Mahesh Baug (“the suit 3 mss APP+959 building”) situated on land bearing City Survey No. 822 part and final plot No. 695 TPS-III Borivali in the Revenue Village of Shimpoli, Borivali, Taluka Mumbai Suburban District, Mumbai 400 092 to the appellant-plaintiff. A declaration was sought that the Articles of Agreement dated 14/7/1988 for the suit flat and Garage No. 2 in the stilt portion of the suit building entered into by defendant 1 Smt. Manju Kukreja and defendant 2 M/s. Mahesh Associates with the plaintiff Mahmood Pervez Choudhary are valid, subsisting and enforceable and the plaintiff is entitled to specific performance thereof. 4. On 8/2/2010 the appellant—plaintiff and defendant 1 Smt. Manju Kukreja and defendant 2 M/s. Mahesh Associates filed Minutes of Order before learned Single Judge of this court in the said suit which was on Lodging No. 3486 of 2009 (subsequently as directed by the court numbered as Suit No. 1348 of 2010). Counsel for the appellant-plaintiff and Smt. Manju Kukreja and M/s. Mahesh Associates informed the court that the parties have settled their disputes. Learned Single Judge took the Minutes of Order on record and marked them “X”. Minutes of Order stated that by consent of the parties the suit was decreed. Minutes of Order contained a direction 4 mss APP+959 to the Court Receiver to put the plaintiff in possession of the suit flat together with the open car space. The plaintiff agreed to make the additional payment of Rs. 2 lakhs to defendants 1 and 2 towards further consideration of the suit flat due to escalation of price. 5. Learned Single Judge accepted the undertaking contained in the Minutes of Order and passed a decree in terms of the Minutes of Order. The order indicates that counsel for the plaintiff was present, counsel for defendants 1 and 2 was present. Court Receiver was not present though he was a party. We have not been shown any document indicating that of this date i.e. of 8/2/2010 any notice was given to the Court Receiver. This appeal was argued yesterday i.e. on 13/10/2010. Sufficient time was available to the counsel for both sides. Yet till today no such notice has been shown to us. We are informed that pursuant to this decree the Court Receiver has put the appellant-plaintiff in possession of the suit flat. 6. Review Petition was filed by 15 persons (hereinafter referred to as “the review petitioners”) who are out of 31 plaintiffs who have filed Suit No. 3686 of 1990 which is pending in this court. They are respondents here. In that suit M/s. Mahesh Associates are 5 mss APP+959 defendant 1 and Mrs. Manju Kukreja is defendant 2. In the said suit inter alia the allegation is that M/s. Mahesh Associates and Mrs. Manju Kukreja have taken nearly 80 per cent of the agreed consideration amount and had misappropriated the said amount and thus defrauded the review petitioners and other plaintiffs and have abandoned the construction of the suit building. 7. It appears that notice of motion was taken out in the said suit for appointment of Court Receiver. Initially no relief was granted to the review petitioners and other plaintiffs. The review petitioners and other plaintiffs carried an appeal before the Division Bench and the Division Bench by its order dated 19/7/1994 appointed Court Receiver. From the said order, it appears that the Division Bench had asked learned counsel appearing for respondents 5 to 7 in whose favour the builder had assigned construction rights as to whether the builder was ready and willing to complete the construction work. The answer was in the negative. After severely commenting on the conduct of the builder the Division Bench disposed of the appeal by passing following operative order; “5. Accordingly, appeal is allowed. Court Receiver, High 6 mss APP+959 Court, Bombay, is appointed as Receiver in respect of suit property including partly constructed building. The Court Receiver is directed to get the building constructed and secure completion certificate and occupancy certificate from the corporation after the appellants deposit the requisite amount with the Court Receiver. The Court Receiver is also directed to re cover all the documents in respect of the said construction including all the agreements respondent nos. 5 to 7 allege to have entered into for sale of the flats from the respondents. After the construction is completed and the occupancy certificate is granted by the corporation, the Court Receiver should induct the appellants in the flats as the agents of the Court Receiver , but without demanding any security or royalty, but on condition that the occupiers will pay all the outgoings to the Court Receiver. In case some flats remain unoccupied, then the Court Receiver should seek directions in respect of those unoccupied flats from the learned Chamber Judge by making requisite report.” 8. This order makes it clear that the suit building and obviously the suit flat were custodia legis. Last sentence of the operative part of the order makes it clear that “in case some flats remain unoccupied, then the Court Receiver was to seek directions in 7 mss APP+959 respect of those unoccupied flats from the learned Chamber Judge by making requisite report”. This direction appears to have been given obviously because the review petitioners and the plaintiffs had contributed for construction of all the flats. If the suit building and the suit flat were custodia legis then the appellant-plaintiff and Smt. Manju Kukreja and M/s. Mahesh Associates could not have obtained a decree in terms of the Minutes of Order on 8/2/2010 from learned Single Judge containing therein a direction to the Court Receiver that possession of the suit flat be handed over to the appellant-plaintiff. 9. It is pertinent to note that the appellant-plaintiff and Smt. Manju Kukreja and M/s. Mahesh Associates tried to move learned Vacation Judge on 24/12/2009 for filing consent terms. The suit was on lodging number. One really does not understand what was the great urgency in moving a Vacation Judge for filing consent terms. It appears that appellant-plaintiff and defendants Smt. Manju Kukreja and M/s. Mahesh Associates were either not successful in persuading the vacation court or could not event get circulation before the vacation court and, therefore, no consent decree was passed during the vacation. We have been shown copy of letter addressed to the Receiver dated 23/12/2009 by counsel for the 8 mss APP+959 appellant-plaintiff addressed to the Court Receiver intimating to him that the Vacation Judge would be moved on 24/12/2009. Therefore, Receiver could at the most be said to have notice of the fact that the Vacation Judge was to be moved on 24/12/2009. It is surprising to note that the appellant-plaintiff who gave a notice to the Receiver about the fact that learned Vacation Judge was to be moved on 24/12/2009 did not give any notice to the Court Receiver that learned Single Judge was going to be moved on 8/2/2010. We repeat that such a notice has not been shown to us. Consequently the Receiver did not remain present. We are informed that the suit was shown on the board and, therefore, the Receiver should have remained present in the court. If the Receiver’s office is a party to this fraud this court would take appropriate action against its staff. That however, does not absolve of appellant—plaintiff’s conduct of not giving fresh notice to the Receiver’s office. Thus without informing learned Single Judge that the suit building and the suit flat were custodia legis, he was persuaded to pass an order of handing over the suit flat to the appellant-plaintiff. We are told that in the Suit No. 3486 / 1348 of 2010 there is a reference to the order of the Division Bench appointing Court Receiver and, therefore, learned Single Judge was aware of the said order. This submission deserves to be rejected 9 mss APP+959 without hesitation. When consent terms are taken on record and orders are passed the court trusts the counsel who come before the court. Plaints and written statements, affidavits and counter affidavits are not gone into meticulously. In any case it was the duty of learned counsel to draw the learned Judge’s attention, either to the order or at least to the averments made about the order in the plaint. That was not done. It is argued that this appeal should not be entertained as possession of similar flats is parted by consent in some other suits which have also been filed. If such other orders are obtained from this court it is indeed unfortunate. That is no ground to overlook the fraud committed in this case. 10. We have seen that the agreement in the instant suit is on stamp paper of Rs.5/-. A solemn statement is made in the court today that during relevant period builders used to prepare such agreements on five rupees and ten rupees stamp papers. We do not know whether it is true. We can only say that this is one of the many circumstances which has caused us great anguish. 11. It was argued that the review petitioners have no locus. We are not inclined to accept this submission. The review petitioners 10 mss APP+959 were made to contribute for the construction of all the flats. It cannot be stated that they are not aggrieved by the order obtained by the appellant-plaintiff and Smt. Manju Kukreja and M/s. Mahesh Associates and even assuming that review petitioners have no locus the courts can take suo motu notice of fraud committed by parties and it is well settled that fraud vitiates everything. Learned Single Judge was right in revoking his order which according to him was obtained by committing fraud by the appellant-plaintiff and Smt. Manju Kukreja and M/s. Mahesh Associates. 12. We have no manner of doubt that the court was not apprised of the correct facts. The court was not told that the suit building and the suit flat were custodia legis and Division Bench had directed that appropriate orders should be taken from the Chamber Judge in respect of unoccupied flats. No notice was given to the Court Receiver of the date on which the consent decree was obtained. Consequently Receiver did not remain present. Learned Single Judge has in his order referred to the judgment of the Supreme Court in S. P. Chengalvaraya Naidu v. Jagannath & Ors., AIR 1994 SC 853 and A.V. Papayya Sastry & Ors. v. Govt. of A.P. & Ors., (2007) 4 SCC 221. In our opinion reliance placed on the said 11 mss APP+959 judgments is apt. Learned Single Judge has rightly noted that even assuming for the sake of argument that the review petitioners have no locus even then once fraud has been brought to the notice of the court, the court can suo motu recall order, which is obtained by playing fraud on the court. In our opinion, fraud was indeed played on learned Single Judge. In spite of this conduct of the appellant- plaintiff and Smt. Manju Kukreja and M/s. Mahesh Associates which deserves to be deprecated, learned Single Judge was kind inasmuch as in paragraph 7 of his order, he permitted appellant-plaintiff to apply for a decree in terms of the consent terms only after giving notice to the review petitioners. When the appeal was opened before us, we asked counsel for the appellant-plaintiff whether he would handover possession to the Receiver and go back to learned Single Judge and again apply for consent decree. Counsel declined. This confirms our view that fraud was played on the court. 13. We, therefore, dismiss the appeal. 14. We direct the Court Receiver to take possession of the suit flat with open car space from the appellant-plaintiff and if the possession is not given, to obtain it forcibly by taking police help. We note that a 12 mss APP+959 solemn statement is made before us that it is the appellant-plaintiff who is in possession of the suit flat. In case the possession is fraudulently handed over to a third person, the Court Receiver is directed to evict the third person by force, if necessary with the help of police. 15. At this stage counsel for the appellant-plaintiff prays that this order may be stayed. Prayer is rejected. 16. In view of disposal of main appeal, Notice of Motion No. 2546 of 2010 does not survive and is disposed of as infructuous. (SMT. RANJANA DESAI, J.) (RANJIT MORE, J.)