1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINRY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.1717 OF 2006 IN SUIT NO. 1644 OF 2006 Mayuresh Real Estate Management Pvt. Ltd. & Anr. .....Plaintiffs V. Nikko Stock Brokers Pvt. Ltd. And 3 others ......Defendants Ms Purnima G. Bhatia a/w Ms Lisa Abraham for the plaintiffs Mr. Girish B. Kedia for defendant No. 1 Mr. Hetal Thakore a/w Mr. Rizvi Naser Ali i/b Thakore Jariwala and Associate for defendant Nos. 2 and 3 CORAM : A.A. SAYED, J DATE : 17TH JUNE , 2009 P.C. 1 The above Notice of Motion has been taken out by the plaintiffs inter alia seeking to restrain the defendant Nos. 2 and 3 from taking further steps in execution in respect of the suit premises, which suit premises stand attached pursuant to Warrant of Attachment dated 06-04-2002 in Execution Application No. 148/2002 taken out by the defendant Nos. 2 and 3 against the defendant No.1. 2 The suit is filed by the plaintiffs claiming to be in possession of the suit premises which are office premises situated on 3rd floor of the building 2 know as Regent Chambers, Nariman Point Mumbai-400021. According to the plaintiffs they are the purchasers of the suit premises under an Agreement for Sale dated 29-05-2001 executed between them and defendant No.1 and they apprehend that the defendant Nos. 2 and 3 are likely to execute the Warrant of Attachment in respect of the suit premises. 3 It is the case of the plaintiffs that they had some financial dealings of shares and securities with the defendant No. 1. The defendant No.1 in order to discharge his liability, issued certain cheques to the plaintiffs which returned dishonoured. Since the defendant no.1 failed and neglected to pay the amounts owed by the defendant No.1 to the plaintiffs, the plaintiffs had through their Advocate issued Notice to defendant No.1 under Section 138 of Negotiable Instrument Act. The suit premises of which the defendant No.1 was the owner, was, as per the understanding arrived at between the plaintiffs and defendant No.1, given to them on license basis by executing a Leave and License Agreement dated 27-04-2001 and the defendant No.1 handed over the possession of the suit premises to the plaintiffs on 28-04-2001 after the amounts which the defendant No.1 owed to the plaintiffs were adjusted against deposits of the plaintiffs and the defendant No.1 had passed a Board Resolution to that effect and the original Share Certificate and other documents of the defendant No.1 were handed over to the plaintiffs. The defendant No.1 thereafter addressed a letter dated 28-04-2001 to the defendant No.4 Society informing the Society about the Leave and License Agreement and the fact that the possession of the suit premises was handed over to the plaintiffs. The plaintiffs have also relied upon possession receipt. Soon thereafter the suit premises was purchased by the plaintiffs from the 3 defendant No.1 by an Agreement for Sale dated 29-05-2001 referred to above. Under the said Agreement of Sale an amount of Rs. 1,40,00,000/- was paid by the plaintiffs to the defendant No.1 and balance of Rs.10,00,000/- was to be paid upon execution of the Sale Deed. The plaintiffs and defendant No.1 have thereafter given the suit premises on Leave and License basis to 3rd parties and at the time of filing of the suit a 3rd party was in occupation and the Leave and License Agreement with the 3rd party was to expire on 30-07-2006. 4 According to the plaintiffs, they were shocked and surprised that the certain persons came to the suit premises and informed them that they are decree holders by virtue of an award passed and the suit premises was attached. The plaintiffs thereafter took out the Chamber Summons No. 1146/2005 in the execution proceedings filed by defendant No.2 against the defendant No.1 and the said Chamber Summons came to be disposed of and Minutes of Order came to be filed by the Advocates in the Chamber Summons whereby the defendant No.2 agreed not to execute the award for a period of 6 weeks so as to enable the plaintiff to file the present suit and apply for appropriate relief. 5 The plaintiffs have accordingly filed the present suit against the defendants for specific performance of the Agreement for Sale dated 29-05-2001 executed between them and defendant No.1 in respect of the suit premises. The plaintiffs have also sought a prayer in the suit that the defendant No. 1 be directed to execute Sale Deed and the requisite stamp duty be allowed to be paid on the Agreement for Sale and that the attachment in respect the suit premises be raised and the defendant Nos. 2 4 and 3 be restrained permanently from taking further steps in the execution proceedings. The plaintiffs have also taken out the above Notice of Motion in the suit essentially to restrain the defendant Nos.2 and 3 from taking further steps in execution in respect of the suit premises as stated hereinabove. 6 The defendant No.2 has opposed the Notice of Motion by filing reply. It is the case of the defendant No. 2, who is the decree holder, that the plaintiffs have been put up by the defendant No.1 only with a view to frustrate the attachment as levied on the suit premises, of which the defendant No.1 is the owner. The defendant No. 2 has pointed out that the defendant No. 2 had business dealings with the defendant No.1 and the defendant No.2 had initiated the arbitration proceedings against the defendant No. 1 and ultimately an award came to be passed in favour of defendant No.2 in the sum of Rs. 2,60,40,342.49. The said award was not challenged and has become a decree pursuant to which, execution proceedings were taken out and the suit premises were attached on 8th April, 2002 in pursuance of Warrant of Attachment dated 6th April, 2002. The defendant No.2 in the reply has stated that more than two years after after the Warrant of Attachment, the plaintiffs had taken out the Chamber Summons being Chamber Summons No. 1146/2005 in th Execution Application to challenge the attachment. According to the defendant No.2 the present suit has been filed with malafide intention and the documents which have been relied upon by the plaintiffs are got up. It is the further case of the defendant No. 2 that the plaintiffs are at one hand claiming to be the licensees under a Leave and License Agreement and on the other hand are also claiming that they have acquired the suit property by Agreement for 5 Sale. The said documents are not stamped as per the Bombay Stamp Act 1958 and the same have not been registered as per the Indian Registration Act. Inspection of the documents are also not given to the defendants. 7 I have heard the learned Counsel for the parties and perused the material on record. In my view, it would not be inappropriate to say that this is indeed a classic case of misuse of process of law. 8 It is an admitted fact that the suit premises was attached on 8-04-2002 under a Warrant of Attachment dated 6-04-2002 in Execution Application No. 148/2002 in Arbitration Reference No. 385/2001 filed by the defendant No.2 against the defendant No.1 and the defendant No.2 holds an award for sum of Rs.2,60,40,342.49 against the defendant No.1. 9 The plaintiffs claim to have come into occupation of the suit premises by virtue of Leave and License Agreement and thereafter Agreement for Sale. Pertinently the said documents viz. Leave and License Agreement and Agreement for Sale have been neither stamped nor registered as required under the law. The Warrant of Attachment came to be issued on 6-04-2002. The Leave and License Agreement is alleged to have been executed on 28-04-2001.Perusal of the Leave and License Agreement discloses that the suit premises has been given by the defendant No.1 to the plaintiffs for a period of 11 years and a sum of Rs. 1,40,00,000/- is shown as security deposit and the license fee is fixed at Rs. 1,000/- per month . The receipt clause of the Leave and License Agreement makes interesting reading and is reproduced hereunder:- 6 "(I) In the sum of Rs. 70,00,000/- Amount adjusted against deposit of Rs. 75,00,000/- lying with the Licensor and payable to the Shashikant G. Badani in respect of whereof the Li censors have issued cheque No. 006538 dated 15-03-2001 drawn on Centurion Bank, Fort Branch which cheque was dishonoured by non- payment. Out of this Cheque amount of Rs. 75,00,000/- a sum of Rs. 70,00,000/- is adjusted against the security deposit. (II) In the suit of Rs. 70,00,000/- amount adjusted against deposit of Rs. 1,21,00,000/- lying with the Licensor and payable to the Jugalkishore R. Barasia in respect whereof the Licensors have issued Cheque No. 006540 dated 16-03-2001 drawn on Centurion Bank, Fort Branch, Mumbai-23 which cheque was dishonoured by non-payment. Out of this Cheque amount of Rs. 1,21,00,000/- a sum of Rs. 70,00,000/- is adjusted in the account of M/s Mayuresh Real Estate and Management Pvt. Ltd. as security deposit, making a total Rs. 1,40,00,000/- as security deposit. " 10 It is thus pertinent to note that no money has changed hands on the execution of the Leave and License Agreement. The said Leave and License Agreement is on stamp of Rs. 100/- . The said document is admittedly not registered. Under Section 55 of the Maharashtra Rent Control Act 1999 a Leave and License Agreement is compulsorily 7 registrable. It is to be noted that under Article 36A of the Bombay Stamp Act 1956, if the leave and license agreement is for more than three years, the same is required to be stamped as a lease. 11 Interestingly thereafter within a period of approximately one month the Agreement for Sale has been executed being an Agreement for Sale dated 29-05-2001 between the defendant No.1 and the plaintiffs and one Shashikant Badani whereby the suit premises have been allegedly purchased by the plaintiffs from the defendant No.1. The receipt clause of the Agreement for Sale also makes interesting reading and is reproduced hereunder:- "RECEIVED from M/s MAYURESH REAL ESTATE & MANAGEMENT PVT. LTD. AND SHASHIKANT G. BADANI, a sum of Rs. 1,40,000/- (Rupees One Crore Forty Lacs Only) being part consideration amount towards purchase price of said premises being Cheque No.006540 dated 16.03.2001, drawn on Centurion Bank, Fort Branch, Mumbai 400 023, which was adjusted and Cheque No. 006538 dated 15-03-2001, drawn on Centurion Bank, Fort Branch, adjusted (the said amount was received pursuant to the Leave and License Agreement dated 27-04-2001, in respect of the said premises is adjusted towards the purchase value of the said premises). 12 Thus under this Agreement for Sale the suit premises is allegedly 8 transferred for a consideration of Rs. 1,50,00,000/- and the balance consideration of Rs. 10.00,000/- was required to be paid at the time of execution of the final Sale Deed. The Agreement for Sale has also not been adequately stamped and is on the stamp paper of Rs. 100/-. The said Agreement for Sale is also admittedly not registered. Explanation 1 of the Article 25 of the Bombay Stamp Act, 1958, provides that if possession is transferred under an agreement of sale of any immovable property, the agreement is required to be stamped as conveyance and stamp duty thereon is leviable . Interestingly prayer clause (b) of the plaint seeks a direction that the defendant No.1 be directed to execute the Sale Deed by paying the required Stamp duty. It is also taken note of that though the suit premises were attached on 08-04-2002, the Chamber Summons to set aside the attachment in the Execution Application was taken out only in 2004, 13 The learned Counsel for the defendant No.2 also drew my attention to section 64 of the CPC which reads as under:- “Private Alienation of property after attachment to be void:- (1) Where an attachment has been made, any private transfer or delivery of the property attached or of any interest therein and any payment to the Judgment-debtor of any debt, dividend or other moneys contrary to such attachment, shall be void as against all claims enforceable under the attachment. (2) Nothing in this section shall apply to any private transfer or delivery of the property attached or any interest therein, made in purchase of any contract 9 for such transfer or delivery entered into and registered before the attachment” 14 Thus considering the above quoted section 64 of CPC, it is obvious that an attempt is made by the plaintiffs to show that the transactions i.e. Agreement of Leave and License and Agreement for Sale are executed prior to the attachment in suit so as to get over the rigours of Section 64 of C.P.C. 15 Prima facie it does appear that the plaintiffs have been put up by the defendant No.1 and they are colluding in order to defeat and delay the further steps in execution of the award, which is now become a decree and thwart further steps of proclamation of the sale of the suit premises to recover the dues of the defendant No.2 from the defendant No.1. It is noted that the Defendant No.1 has been declared as a defaulter by BSE as stated in the written Statement of defendant No.1. No credence can be attached to the documents relied upon by the plaintiffs. The documents are neither stamped under the Bombay Stamp Act, 1958 nor are they registered as required under Bombay Registration Act, 1908. The documents are therefore inadmissible in evidence under Section 34 of the Bombay Stamp Act 1959 nor can the documents affect the suit premises and received as evidence of any transaction affecting the suit premises under Section 49 of the Registration Act. 16 In my view this is a case of gross abuse of process of the Court and no relief can be granted to the plaintiffs based on the documents which appear to be manipulated and got up only for the purpose of defeating the 10 proclamation of sale of the suit premises which already stands attached under a Warrant of Attachment towards recovery of dues of the defendant No.2, who is the decree holder. 17 For the reasons aforesaid, the Notice of Motion is devoid of merits and is dismissed with costs quantified at Rs. 15,000/- to be paid by the plaintiffs to the defendant No.2, within a period of 6 weeks from today. 18 In the peculiar facts of the case, the plaintiffs are directed to deposit the original Agreement for Sale dated 29.05.2001 (Exhibit 'G' to the plaint) and that the original Leave and License Agreement dated 27.04.2001 (Exhibit 'C' to the plaint) executed between them and the Defendant No.1 with the Portohnotary and Sr. Master within a period of 6 weeks from today and the same shall remain deposited with the Prothonotary and Sr. Master until further orders/ hearing and final disposal of the suit. 19 It is clarified that the above observations are restricted to this Notice of Motion and shall not influence the trial of the suit. 20 Notice of Motion to stand disposed of. A.A.SAYED, J.