1 fa297-99j rpa IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL Appellant JURSIDICTION FIRST APPEAL NO. 297 OF 1999 ALONGWITH CROSS OBJECTION ST. NO. 16034 OF 1999 Smt Rashmi Rajan Tendulkar & Anr. .. Appellants V/s. M/s. Saibaba Builders & Others .. Respondent ..... Ms. Swati P. Gautam a/w. Mr. W.W. Waishampayan for the Appellants. Mr. N. V. Walawalkar, Senior Counsel i/b. Mr. G. H. Keluskar for Respondent No.1. Mr. Yatin Shah i/b. M/s. Chitnis Vaithy & Co. for the Respondent No.4. ..... CORAM : A.S.OKA, J. DATE : 17TH & 18TH OCTOBER, 2011. ORAL JUDGMENT : The submissions were heard on 16th September, 2011. The judgment was not dictated immediately. It was postponed so as to enable the parties to make an attempt to amicably resolve the issue. 2. It will be necessary to make a brief reference to the facts of the case. The Appellants are the plaintiffs and the Respondent are the Defendants. It will be necessary to make a reference to the case made out in the Plaint. In the plaint, a reliance is placed on an Agreement for sale dated 2nd October, 1987 executed by the first and second Respondents in favour of the first Appellant. Reliance is also placed 2 fa297-99j on the terms and conditions incorporated in the said Agreement. The said Agreement was signed and executed by the second respondent as a partner of the first respondent. The Agreement is for sale of Flat No. 5 admeasuring 702.75 sq. feet, more particularly described in the said Agreement. There is a recital in the said agreement that the first respondent had taken the property under the Agreement dated 24th March, 1980 from the owners of the property. The property was developed by the first respondent by constructing a building. Flat No.5 was agreed to be sold for the price of Rs.4,25,250/- as set out in clause (2) of the agreement. The agreement records that the first and the second Respondents received from the first Appellant a sum of Rs. 85,000/- by way of advance payment. The Appellants have set out some of the relevant clauses in the suit agreement. It is stated that the Appellants started approaching the second respondent after 31st March, 1989 requesting him to give at least an alternative accommodation for their temporary residence as they badly needed a premises. It is stated that the Appellants lodged a complaint on 18th June, 1992 with the police. The second respondent was summoned by the police. It is alleged that the second respondent offered to accommodate the Appellants in his flat standing in the name of his wife in Nutan Ayojan Nagar Co-operative Housing Society Limited. In January, 1993, the Appellants approached the second respondent and requested him to accommodate them in a flat of their entitlement. 3 fa297-99j According to the Appellants, the second respondent stated that the occupation certificate is not issued by the Municipal Corporation. It is alleged that the second respondent told the Appellants that they should pay additional amount on account of the furniture and fixtures and for interior decoration in the said flat standing in the name of his wife. The Appellants expressed inability to pay. The first and second Respondents thereupon represented that they will need some time to remove the furniture. It is alleged that in January, 1993, there was lot of tension in the city of Mumbai. It is alleged that there was a stop gap arrangement made between the Appellants and the first and second Respondents and that is how, on 18th January, 1993, the Appellants occupied Flat No.303 on the third floor of the Building-“B” in the same property. 4. The case made out in the Plaint is that Flat No.5 which was agreed to be sold under the suit agreement was subsequently numbered as Flat No.102 in the Building “B”. The said Flat No.5 (102) has been described in the plaint as the suit premises “A” and Flat No.303 has been described in the plaint as the suit premises “B”. 5. The case of the Appellants is that they were under impression that the second respondents will take steps to enable the Appellants to take possession of the suit premises “A” after surrendering the suit premises “B”. It is alleged that the Appellants 4 fa297-99j were always ready and willing to perform their part of the Agreement dated 2nd October, 1987. It is contended that a bank had sanctioned the housing loan to the first Appellant and therefore, it was possible for the first Appellant to remit the amount in the Court. 6. During the pendency of the suit, an amendment was carried out to the suit. It is alleged that with a view to deprive the Appellants of the suit premises, the first and the second respondents acting in collusion with the other Respondent fabricated documents for showing creation of right, title and interest in respect of the suit premises “A” in the name of a third party Suresh H. Parekh, the fourth respondent herein. The fifth respondent is a developer who has subsequently taken over the work of the development of the property in question. The fourth respondent claims to be a member of the respondent No.6 Co-operative Society. It is submitted that the alleged title claimed by the fourth respondent Suresh H. Parikh in respect of the suit premises “A” is nullity and the said respondent has ceased to be a member of the sixth respondent Co-operative Society. It is alleged that the second respondent caused amalgamation of two flats bearing Nos.602 and 603 illegally and unauthorisedly. It is contended that this was done to prevent creation of a situation in which the second respondent will have to accommodate the Appellants in one of the two vacant flats i.e. Flat Nos.A-601 and A-602. It is pointed out that during the pendency of the suit, the Court Receiver was appointed 5 fa297-99j and the Appellants were placed in possession of the Flat No.A-602. 7. In Paragraph 11(k) of the amended Plaint, it is alleged that the fifth respondent vide their letter dated 22nd June, 1990 addressed to the first respondent recorded their offer for allotment of Flat No.501 in lieu of the suit premises “A”. The said Flat No.501 was initially shown to have been sold to one Pramod Agarwal. It is alleged that the said flat was retrieved by the fifth respondent vide a Deed of Cancellation dated 22nd June, 1990 . It is alleged that both the said letter and the said Deed of Cancellation were signed by the second respondent, but were never sent to the first Appellant for her confirmation. It is contended that the conduct of the Respondents was fraudulent and therefore, the second respondent be made to permanently allot Flat No.A-602 to the first on rearranging the same as per the initial sanction of the Mumbai Municipal Corporation. It is alleged that the suit agreement is executed under provisions of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act,1963 (hereinafter referred to as “the said Act of 1963”). In amended Paragraph (18a) of the plaint, the allegation is that the Appellants were dispossessed from the Flat No.303 by the use of force by the police. 8. It will be necessary to make a reference to the prayers made in the suit. The first prayer is for a declaration that the 6 fa297-99j agreement dated 2nd October, 1987 is valid and subsisting. The second prayer is for mandatory injunction directing the first and second Respondents to perform their part of the agreement dated 2nd October, 1987 subject to receipt of balance consideration of Rs. 3,30,250/-. The Prayer (c) is for perpetual injunction restraining the respondents from creating any third party interests or interfering with the Appellants’ right as they are the purchasers of the suit premises. In the alternative, a prayer was made that the Appellants are entitled to permanently retain the Flat No.A-602. Another prayer was for permitting the Appellants to deposit the balance consideration of Rs. 3,30,250/- in the Court. A prayer was also made for appointment of Court Receiver. Certain other directions were sought in the plaint. 9. written Statement was filed by the first and the second Respondents. It is contended in the Written Statement that the case made out by the Appellants that they were allowed to occupy Flat No.303 is totally false and in fact the Appellants forcibly entered the said Flat No.303. The first and the second Respondents did not dispute the suit agreement. However, they stated that after making payment of Rs.85,000/-, the Appellants never came forward to pay the balance consideration. It was contended that the suit agreement stands terminated and the earnest money paid by the Appellants stands forfeited. Various other contentions were raised in the Written 7 fa297-99j Statement. 10. The third respondent filed a Written Statement contending that he was the owner of the flat no.303 and that the said flat was purchased by him for valuable consideration from the fifth respondent. The fourth respondent also filed a Written Statement. He contended that on 10th June, 1993, the said Respondent purchased the Flat No.A-102 (suit premises “A”) for a valuable consideration of Rs. 5,95,251/- from its earlier owner Motilal S. Gupta. It was contended that the said flat was agreed to be purchased by said Motilal S. Gupta from from the fifth Respondent-developers M/s. Somesh Builders and Developers Private Limited. It was alleged that after execution of the Agreement, the fourth Respondent paid the entire balance consideration in respect of the said flat. It is contended that he was put in possession. It is contended that after taking possession, the fourth respondent started peacefully residing in Flat No.A-102. It is stated that the sixth respondent society has issued a share certificate in the name of the fourth respondent. Reliance was placed on the electricity bills in respect of the said flat. It is contended that the fourth respondent had lawfully purchased the said flat from Motilal Gupta. The sixth respondent filed the Written Statement which merely contains denials. 8 fa297-99j 11. Before adverting to the submissions made by the learned counsel appearing for the parties, it will be necessary to make a reference to the issues framed by the Trial Court. The issues framed by the Trial Court read thus:- “1. Whether the plaintiffs prove that by the agreement dt. 02.10.1987, defendant No.1 & 2 agreed to sell suit premises “A” in favour of plaintiff No.1 ? 2. Whether the Plaintiffs prove that the agreement dt. 02.10.87 is valid and subsisting ? 3. Whether the plaintiffs prove that they have been and they are still ready and willing to perform their part of agreement dt.02.10.87 ? 3a Does the Defendant No.4 prove that he is bonafide purchaser for value without notice? 4. Whether the plaintiffs are entitled to specific performance of the agreement dt. 02.10.87 ? 5. Whether the plaintiffs are entitled to suit premises “A” ? 6. Whether the plaintiffs prove that the 9 fa297-99j agreement dt.03.04.89 between M/s. Somesh Builders & Developers Pvt. Ltd. Therein called the promoter and Shri Motilal Gupta, therein called the Purchaser and the agreement dt. 10.06.93 between Shri Motilal Gupta therein called the Assignor/Transferor and Shri Suresh Hirachand Parekh therein called the Assignee/Transferee in respect of suit premises “A” are illegal and void ab-initio and therefore not binding on the plaintiffs ? 7. Whether Defendants No.1 & 2 prove that this Court has no jurisdiction to entertain and try the suit as stated in paragraph 3 of their written statement ? 8. Whether the plaintiffs are entitled to leave under Order II Rule 2 ? 9.a Whether the plaintiffs prove that they were put in possession of Flat No.B-303 ? 9.b Do they prove that they were dispossessed from the said flat on 10 fa297-99j 30.10.1993 ? 10. Are plaintiffs entitled to possession of said Flat No.B-303 ? 11. Do plaintiffs alternatively prove that they are entitled to retain Flat No.A-602 permanently ? 12.a Whether the suit is properly valued ? 12.b Whether this Court has pecuniary jurisdiction to try and entertain the suit in view of the alternative relief in respect of Flat No.A-602 ? 13. Does the Defendant Nos.1 and 2 prove that the suit is bad for misjoinder of parties and causes of action? 14. What decree and order? 12. Issue Nos. 3,3a,4,5,6,9a,9b,10,11 and 13 were answered in the negative. The learned Trial Judge held that as the 2nd Appellant was not the flat purchaser, he was not entitled to any relief. In view of this finding, the learned Trial Judge held that the issue of jurisdiction raised by the 1st and 2nd Respondents would not arise. The issue numbers 9(a) and (b) were also answered accordingly. Issue 11 fa297-99j Nos. 12 (a) and 12 (b) were answered in favour of the Appellants. The learned Trial Judge partly decreed the suit by directing the 1st and 2nd Respondents to pay a sum of Rs.85,000 to the 1st Appellant together with interest thereon at the rate of 24% per annum from the date of execution of the said agreement till realisation. The 1st and 2nd Respondents were also ordered to pay costs of the suit. The 1st plaintiff was ordered and decreed to pay to the 1st and 2nd Respondents electricity charges at 300 units per month. The 1st Appellant was ordered and decreed to pay maintenance charges in respect of one flat. The Court Receiver, High Court, Bombay was directed to take over possession of the flat no. A602 from the Appellants and hand over the same to the 1st and 2nd Respondents. The Court Receiver was discharged. The Appellants are aggrieved by this decree. The cross objection filed by the 4th respondent is for challenging the finding on issue No.3a. 13. It must be noted here that without even touching the merits of the issues involved, the perusal of the impugned judgment shows that the same has been written in a very peculiar manner. Perusal of the judgment shows that up to paragraph 87 of the judgment, the facts of the case and submissions of the advocates have been recorded and thereafter, in paragraph 88 of the judgment, the findings have be recorded on the issues in a very cryptic manner. The manner in which the judgment is written is wholly contrary to the law 12 fa297-99j and the provisions of the Code of Civil Procedure, 1908. No detailed discussion is necessary to record the said finding as the same is apparent from the bare reading of the judgement. From the manner in which the reasons have been recorded in cryptic manner in paragraph 88 of the judgment, the only conclusion which can be drawn is that the impugned judgment and decree deserves to be quashed and set aside. The question is whether by setting aside the impugned judgment and decree, the matter should be remanded to the Trial Court so that the same can be decided by the Trial Court by recording proper findings. 14. Perusal of the Appeal compilation and the records shows that the substantial evidence have been adduced by both the parties. It is not the case of any of the parties that the learned Judge has not given them an opportunity to lead evidence. The suit is of the year 1993 and the appeal is of the year 1999. Therefore, it will be unjust to remand the suit only for delivering a reasoned judgement. 15. After the learned counsel appearing for the Appellants argued the Appeal at length, for some time, even the Advocate on record for the Appellants addressed the Court. It will be necessary to make a reference to the submissions made on behalf of the Appellants. The first submission is that the Appellants have not only paid a sum of Rs.85,000/- but they have paid a sum of Rs.4,00,000/- to the 1st and 13 fa297-99j 2nd Respondents in cash and also another sum of Rs.21,000/-. She submitted that the first and the second Respondents transferred the entire property to the fifth respondent only with a view to defeat the claim made by the Appellants on the basis of the agreement. It is submitted that the fifth respondent being a transferee of the first and second Respondents is liable to perform obligations of the first and second Respondents under the suit agreement. A contention has been raised that the fifth respondent is claiming under the first and the second Respondents and therefore, he is bound by all the obligations of the first and second Respondents. She submitted that the suit agreement is governed by the said Act of 1963 and, therefore, the first and the second Respondents cannot be escape from their obligations as the promoters under the suit agreement. 16. The learned counsel appearing for the Appellants has taken the Court not only through the notes of evidence and the documents on record but also through the interim orders passed during the pendency of the suit and the interim orders passed during the pendency of the Appeal. It was pointed out that during the pendency of the suit filed by the Appellants, the Court Receiver, High Court, Bombay was appointed as the Court Receiver in respect of the Flat Nos. A-601 and A-602. He was directed to take possession of Flat No. A-602 and put the Appellants in possession as the agents of the Court Receiver. Learned counsel appearing for the Appellants invited 14 fa297-99j the attention of the Court to the interim orders passed in the present Appeal by which the appointment of the Receiver and the appointment of the Appellants as agents to occupy the said flat subject to modified terms and conditions was continued. She pointed out that substantial amounts have been deposited by the Appellants in terms of the modification of the interim order made by a Division Bench of this Court. 17. Learned counsel appearing for the Appellants submitted that the suit agreement was never terminated either by the first respondent or by the second respondent. Learned counsel appearing for the Appellants pointed out that as the suit agreement was never terminated , the said Respondents are bound by the suit agreement. Learned counsel submitted that in the agreement executed by and between the second and fifth respondent , the suit flat 'A' has been shown as sold to the first Appellant and that it is not available for disposal to the fifth respondent. She submitted that therefore, the fifth respondent had no authority to execute sale transaction in respect of the suit flat “A” in favour of one Motilal Gupta from whom the 4th respondent has purportedly taken the said flat. The learned counsel submitted that the suit agreement was lodged for registration. The learned counsel submitted that the fourth respondent cannot be said to be a bona fide purchaser of the suit flat "A" as the fourth respondent has not at all investigated the title of the said Motilal 15 fa297-99j Gupta to transfer the suit flat in his name. It is, therefore, submitted that the fourth respondent is bound by the suit agreement. After inviting the attention of the Court to the pleadings and the notes of evidence on record, the learned counsel invited the attention of the Court to the prayers made in the Plaint. The learned counsel submitted that there is a prayer made in the alternative in the plaint which will have to be considered in the event this Court is not inclined to grant any relief in respect of the suit premises "A". 18. The learned counsel appearing for the Appellants submitted that in fact the finding of the trial Court is that the fourth Respondent is not at all a bonafide purchaser. The learned counsel submitted that the suit was essentially for enforcing the obligations of the first and second Respondents under the said Act 1963. The submission is that the first and second Respondents as well as the fifth Respondent are bound to perform their statutory obligations under the said Act of 1963. The learned counsel appearing for the Appellants submitted that the prayer in the alternative is that the Appellants be allowed to retain flat No. A-602 on the same terms and conditions incorporated in the suit agreement for sale. The learned counsel invited attention of the Court to letter dated 22nd June, 1990 issued by the fifth Respondent to the first Appellant by which allotment of flat No.501 was offered. The learned counsel submitted that in view of the said offer given by the fifth Respondent, a decree can be passed 16 fa297-99j even in respect of the said flat. The learned counsel appearing for the Appellants relied upon a decision of the Division Bench of this Court in the case of Naginbhai P. Desai V/s. Taraben A. Seth [2003 (1) Mh.LJ 997]. The learned counsel relied upon a decision of this Court in the case of Iramjisingh Bhuliansingh V/s. Tarun K. Shah [2002 (4) ALL MR 198]. Lastly, reliance was placed on a decision of this Court in the case of Kausabai wd/o. Rajaram Waradkar & others V/s. Gayabai wd/o. Gundaji Mogre & Others [2010 (4) Mh LJ 46]. 19. The learned senior counsel appearing for the first and second Respondents submitted that the agreement for sale was in favour of only the first Appellant. He submitted that apart from the fact that the first Appellant has not shown the readiness and willingness to pay the balance consideration, in the evidence a case was made out that in fact the total consideration was fixed as Rs. 8,25,250/- out of which a sum of Rs.4,00,000/- was paid in cash. He submitted that this case has not been established. He submitted that a completely new case was made out in the evidence. He submitted that this conduct of the Appellants is very relevant and significant while this Court considers the prayer for specific performance of the contract. He submited that the Appellants have not proved the copy of the alleged development agreement dated 6th October, 1997 to prove that the schedule thereto shows that the suit premises "A" was sold to the first Appellant. He submitted that the fifth Respondent sold the 17 fa297-99j suit premises "A" to one Gupta who in turn sold the same to the fourth Respondent. He submitted that apart from the fact that the Appellants have forfeited their rights to claim the suit premises "A", they have no right in respect of flat No.303 or flat No.A602 as both the flats are not the subject matter of the suit agreement. He, therefore, submitted that no interference is called for with the impugned decree. 20. The learned counsel appearing for the fourth Respondent submitted that the fourth Respondent is a bonafide purchaser of the suit premises "A". He submitted that though the fourth Respondent may not have taken a search in the office of Sub Registrar but he has made enquiry in the Sub Registrar's office. Moreover, the 4th respondent found that his predecessor Mr.Gupta was given membership of the 6th respondent society and a share certificate was issued in his name and that he was in possession thereof. He submitted that when the flat was in a registered Co-operative society, and it was found that the share certificate was already issued in the name of the predecessor in title of the 4th respondent, it was not necessary to make any further enquiry. He submitted that the finding recorded by the trial Court on the relevant issue of the 4th respondent being a bona fide purchaser will have to be corrected. He submitted that the fourth Respondent is a bona fide purchaser who is in possession right from the year 1984 and now his possession cannot be disturbed. He pointed out that the suit agreement was insufficiently 18 fa297-99j stamped and deficit stamp duty was paid on 19th January, 1998 i.e. during the pendency of the