1 MNM IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO. 2936 OF 2008 IN SUIT NO. 2520 OF 2009 AND NOTICE OF MOTION NO.3678 OF 2008 IN SUIT NO.2520 OF 2009 Chandulal P. Patel & Anr. ...Plaintiffs Vs. Jaywant Harischandra Thakur & Ors. ...Defendants Mr. D.D. Madon, Sr. Counsel with Mr. K.H.Mody with Mr. Rajesh Datar and Pankaj Das for Plaintiffs Mr. N.V. Walawalkar, Sr. Counsel i/b. Mr. Ajay S. Patil for Defendants 1 to 5 Mr. Amol Mhatre for Defendants 6 and 7 Mr. Suhas Oka for Defendant No.9 CORAM : SMT. ROSHAN DALVI, J. Date of Reserving the Order : 16th April, 2010 Date of pronouncing the Order: 28th April, 2010 P. C. : 1. The Suit is essentially for the specific performance of an unregistered 2 agreement dated 1 st February 2003 executed between Plaintiffs and Defendant No.1 on the one hand and Defendants 1 to 5 on the other. It is also for challenging a registered agreement-cum-sale-cum-development dated 28 th July 2008 executed between Defendants 6 and 7 in favour of Defendant No.9 and in the alternative for damages. 2. Both Notices of Motion are for appointment of Court Receiver and for the usual injunctions. The first Notice of Motion is only against Defendants 1 to 7 and the second is against Defendant No.9. 3. Prior to the agreement dated 1 st February 2003, which is sought to be specifically enforced, the Plaintiffs had entered into another unregistered agreement dated 21 st April 1995 with Defendants 1 to 5 who are the owners of the Suit property. The consideration payable by the Plaintiffs under the agreement of 1995 was Rs. 57 lakhs. The Plaintiffs had paid only the earnest amount of Rs. 9 lakhs. The Plaintiffs were stated to have been put in possession of the Suit property and an irrevocable Power of Attorney was executed in their favour. 4. The Plaintiffs however could not and did not develop the Suit property at all. They failed to make any further payment of consideration. 5. The Plaintiffs contend that Defendants 1 to 5 entered into another agreement with the Plaintiffs on 1 st February 2003 under which the Plaintiffs were given half the Suit property for development for a total consideration of Rs.12.55 lakhs out of which Rs.12.50 lakhs was paid by 3 the Plaintiffs on the date of execution of that agreement which amount was stated to be admitted and acknowledged by Defendants 1 to 5 only Rs. 5000/- was payable later on execution of the conveyance. 6. The Plaintiffs also entered into another agreement on the same day under which the earlier agreement of development dated 21 st February 1995/31 st January 1995 was cancelled. The Plaintiffs were also issued another letter of possession on that day. The agreement as well as the letter of possession show annexed thereto a plan of the Suit property dividing the Suit property horizontally into half each division called X and Y. The Plaintiffs were to develop the plot X. 7. The Defendants 1 to 5 executed another General Power of Attorney on 27 th May 2003 in favour of the Plaintiffs. 8. The Defendants 1 to 5 executed a receipt for Rs.12.55 lakhs (and not Rs. 12.50 lakhs) in favour of the Plaintiffs on 14 th June 2003 (Rs.5000/- is stated to have been paid in cash on 14 th June 2003). On the Court’s query the Plaintiffs have produced a statement showing Rs.3.50 lakhs paid in various installments by cheque or cash in 1995 and 1996. Out of these, the Plaintiffs have shown two cheques payments of Rs.50,000/- each, made on 7 th July 1996 to Defendant No.1 and his father. These payments are debited to the Plaintiffs’ Bank Account on 9 th July 1996. The Plaintiff claim that that is a part of the consideration of Rs.12.55 lakhs (including Rs. 9 lakhs paid as earnest) paid on the date of the execution of the second agreement for developing only half the property of the Defendants. The 4 other payments are shown to be made in February 1995, even prior to the execution of their first Agreement with Defendants 1 to 5. 9. The Plaintiffs have sued for specific performance of the agreement dated 1 st February 2003. Defendants 1 to 5 have not denied execution of the agreement dated 1 st February 2003 in their affidavit in reply filed to oppose ad-interim relief. No other affidavit is filed by them. 10.The Plaintiffs have relied upon intrinsic evidence contained in the other documents of Defendants 1 to 5 as well as Defendants 6,7 and 9 to show the execution of the agreement with Defendants 1 to 5 and the knowledge thereof upon Defendants 6,7 and 9 who are further transferees in respect of the Suit property. 11.The Defendants 1 to 5 and the Plaintiffs entered into an unregistered Memorandum Of Understanding (MOU) with one Umesh Naresh Jain (Jain) on 14 th June 2003, the date on which the Plaintiffs made payment of the entire consideration of Rs.12.55 lakhs and obtained the receipt for payment of consideration. The Plaintiffs were also parties to the MOU. 12.The execution of the MOU dated 14 th June 2003 is not denied. This MOU shows the Plaintiffs’ plot X bounded as ABCD on the plan which is stated to be annexed thereto. The other plot has to be developed by Jain. Jain was to be given plot Y for development marked EFGH under plan annexed to the MOU. The fact that the Plaintiffs had made “full and final payment” to Defendants 1 to 5 and that there was no balance payable by the Plaintiffs 5 has been shown in clause 2 of the tripartite MOU. 13.Whereas the Plaintiffs are stated to have obtained development rights for half the Suit property for Rs.12.55 lakhs, Jain obtained development rights under the MOU dated 14th June 2003 for Rs.31.89 lakhs. Clause 1 of the MOU shows that there was no access or approach road to the entire property mentioned as X and Y in the plan annexed to the MOU. In fact the entire payment, except the last installment of Rs.5000/-, was made in 1995-1996. Hence on 1st February 2003 no consideration passed from the Plaintiffs to Defendants 1 to 5. The Plaintiffs paid Rs.5000/- in cash thereafter on 14th June 2003 and obtained the entire receipt as well as possession of plot X. 14.Defendants 1 to 5 entered into another agreement for development-cum- sale with Jain in plot Y on 25 th June 2003. That agreement inter alia recites about the Plaintiffs’ initial agreement, the expression of the Plaintiffs of the unwillingness to develop the Suit property under that initial agreement until then and the amicable settlement arrived between the parties under which the initial agreement of 1993 was cancelled and in lieu thereof another agreement was executed. The Plaintiffs then were to develop only a part of the property being plot X. The agreement also recites that the Plaintiffs have surrendered the remaining portion of the property being plot Y. It further recites that Defendants 1 to 5 as the owners were in occupation and possession. Clause 1 of the agreement shows that Jain has been given development rights for consideration of Rs. 31.89 lakhs. Clause 3 of the Agreement shows that the entire plot of 6 Defendants 1 to 5 has no right of way and no access including the adjoining plot of the Plaintiffs. The agreement makes a specific reference to the Plaintiffs. The schedules in the agreement show the entire property in Schedule 1, the Plaintiffs’ half portion being plot No. X in Schedule 2 and Jain’s half portion being plot Y in Schedule 3. 15.There is no dispute between Defendants 1 to 5 and Jain with regard to plot Y. The development of plot Y does not concern the Plaintiffs and the Plaintiffs do not claim any rights in plot Y. The Plaintiffs claim to rely upon the documents relating to plot Y and the documents relating to further transfers in respect of plot X as circumstantial evidence to show the execution of the agreement dated 1 st February 2003 with the Plaintiffs. 16.Jain is stated to have transferred plot Y to one Morarji Bhai Chheda of M/s. Chheda Housing Corporation under another agreement for sale-cum- development dated 30 th June 2006. That agreement recites the earlier transactions with the Plaintiffs in respect of 50% of the suit property which is plot X. 17.Defendants 1 to 5 have entered into a registered development agreement with Defendants 6 and 7 on 31 st December 2007 which came to be registered on 3 rd January 2008. Defendants 6 and 7 claim to have paid Rs. 65 lakhs thereunder. Rs.47 lakhs are stated to be paid by various cheques and Rs.18 lakhs in cash. Defendants 6 & 7 were directed to show payments made. They have produced copies of their pass books of the Savings Bank Accounts of Defendant No.6. One pass book of Vijaya Janata 7 Sahakari Bank is ostensibly of Account No.0007918 of Defendant No.6. The pass book is issued on 25 th October 1994. The entries are from 5 th April 2006 to 16 th November 1996. None of the entries in this pass book is relied upon. After these entries is one page of another Bank Account. It is not known whose Account that is. The statement of that Account shows entries from No.0 to 17 from 15 th November to 7 th March 2010. On this page there are 4 bank entries showing names of some of the Defendant Nos.1 to 5 which are highlighted. The entries are intriguing. After a deposit in cash of Rs.5 lakhs on 20 th December 2007, a transfer entry is made in the names of Defendant Nos.1 & 2 for Rs. 2 lakhs and Rs.3 lakhs. Thereafter, there is a cash deposit of Rs.4 lakhs on 23 rd December 2007, followed by two withdrawals on 26 th December 2007 and 28 th December 2007 in favour of Defendant Nos.5 & 1 for Rs.3 lakhs and Rs.1 lakh again by two transfer entries. Aside from these 4 major entries showing debit of Rs.9 lakhs upon cash deposit of Rs.9 lakhs a day or two before these entries, there is no other major business entry. The page is from an account of some other person who has an account in the same branch as Defendant Nos. 1 to 5. It is not known who has deposited the amount to be withdrawn immediately thereafter. 18.A copy of another bank account in the Kapol Co-operative Bank Ltd. shown to be in the name of Defendant No.6 under account ID No. SB 4496 opened on 12 th April 2004 shows entries from 21 st July 2007 to 26 th March 2008. Assuming that the statements relate to the account of Defendant No. 6, similar entries showing cash deposits immediately prior to withdrawals in the names of Defendant Nos.1 to 5 are made. After a deposit of Rs. 5 8 lakhs in cash on 24 th December 2007 debit entries of Rs. 3 lakhs and Rs.2 lakhs are made in favour of Defendant Nos.4 & 3. Thereafter a cash deposit of Rs.1.50 lakhs is made on 2 nd January 2008 immediately followed by a withdrawal in favour of Defendant No.3 of Rs. 1 lakh. Thereafter on 21 st January 2008 a further cash deposit of Rs.5 lakhs is made, immediately followed by 5 debit entries of Rs. 1 lakh each showing payments made to Defendant Nos.1,4,5, and one Anubai. 19.The statement of ICICI Bank of Defendant No.7 bearing Account No. 2805002891 similarly shows entries of cash followed by cheque payment in favour of Defendant Nos.1 to 5. In this account Rs.10 lakhs are deposited in cash on 20 th December 2007 followed by 5 debit entries of Rs. 2 lakhs each showing payments made to Defendant Nos.5,3,2,4 & 1 on 24 th December 2007 and 26 th December 2007 respectively. Thereafter in the same account cash deposit of Rs.5.98 lakhs and Rs.48000/- are made on 26 th March 2008 followed by a debit entry of Rs. 6 lakhs in favour of Defendant No.3 on 26 th March 2008. 20.It can be understood why despite the Plaintiffs’ demand to show payment made and to give inspection of documents, evidence of payment reflected in these bank account statements were not shown for inspection to the Plaintiff. Even after this Notice of Motion reached hearing and was heard on 16 th April 2010 and was adjourned to 19 th April 2010 the account statements were not produced and Defendant Nos.6 & 7 applied for time till today to produce the bank statements. After the matter reached hearing and the Plaintiffs were heard and their statements showing 9 payments made was seen, the aforesaid copies of the bank passbooks were tendered to Court to show payments allegedly made of Rs.47 lakhs to Defendant Nos. 1 to 5. 21.The statements are seen to be rather worthless. It is not known who deposited cash amounts which came to be withdrawn from time to time and whether the same cash amount was redeposited only to be re- withdrawn to create evidence of payments of consideration far more than the consideration paid by the Plaintiffs. 22.The grievance that these Defendants have been put up only to sabotage the Plaintiffs’ claim is not misplaced. 23.It is the Plaintiffs’ case that they came upon a public notice dated 15 th January 2008 in respect of the Suit property which does not disclose the rights created in favour of any party. The Plaintiffs replied to the Advocate who issued the notice on 5 th February 2008. Thereafter on 19 th February 2008 they issued the notice to Defendants 1 to 5 calling upon them to perform the agreement dated 1 st February 2003 entered into by them with the Plaintiffs for which the Plaintiffs paid the entire consideration and were put in possession. The Plaintiffs also lodged the FIR with the relevant police station alleging the offence of cheating on the part of Defendants 1 to 5. In each of these letters the Plaintiffs have made a mention of plot X bounded in the plan as ABCD to be developed by them. This reference shows the execution of the documents of the year 2003. Under the reply of Defendants 1 to 5 to the Plaintiffs’ notice they terminated the initial 10 agreement dated 21 st February 1995 and forfeited the initial earnest amount of Rs. 9 lakhs paid by the Plaintiffs. Defendants 1 to 5 made no mention of one agreement dated 1 st February 2003 or denied its execution. 24.The Plaintiffs sued on 17 th July 2008 and obtained an order of status-quo to be maintained by all the parties on 26 th August 2008. 25.On 28 th July 2008 Defendants 6 and 7, claim to have entered into the aforesaid agreement with Defendant No.9. The agreement recites about the issuance of the IOD Certificate by the Mira Bhayandar Municipal Council (Municipality) dated 31 st March 2008 (wrongly typed as 31 st August 2008). Defendant No.9 claims that plans were already got sanctioned by Defendant No.9 on 28 th June 2008 and the commencement certificate was issued by the Municipality. Defendant No.9 has produced a copy of the approved plan. A copy of the approved plan produced by Defendant No.9 shows the approval granted on 28 th June 2008. That fact however is not recited in the agreement entered into by them on 28 th July 2008 – only the issue of IOD Certificate is recited. Defendant No.9 was to make payment of Rs.80 lakhs as consideration under the said agreement. Rs.50 lakhs are shown to have been paid on the execution of the agreement and Rs.30 lakhs were to be paid at the time of registration of the development agreement. The receipt annexed to the agreement shows the payment of Rs.50 lakhs being made by cash payment of Rs.20 lakhs and cheque payment of Rs.30 lakhs by 2 cheques dated 28 th July 2008. The cheques have not been encashed on the premise that by then the status-quo order was passed. The original cheques are also not produced. 11 26.Hence in the agreement dated 28 th July 2008, no payment is shown to be made by Defendant No.9 till 26 th August 2008. 27.Both the Plaintiffs as well as Defendant No.9 claim to be in possession. They have sought to show their possession by way of a board put up on the suit premises. The mere photograph of a board cannot show the specific premises in the possession of either of them. 28.The amount taken by both the parties for development of the Suit property being plot X is the only relevant circumstances to show the prima facie possession. Almost the entire of the Plaintiffs’ consideration was paid in 1995-1996 (which was that of the agreed consideration in the initial agreement dated 21 st April 1995). The consideration bonafide paid by Defendants 6 & 7 is not shown in the Bank Account Statement sought to be pushed to Court during the hearing without offering these documents for inspection. No consideration paid by Defendant No.9 is at all shown. Whatever be the consideration paid by the Plaintiffs. The execution of the Agreement dated 1 st February 2003 is prima facie shown. The real consideration for the Vendors, Defendants 1 to 5 is the division of their property in two parts X & Y to be developed separately by the Plaintiffs and Jain. 29. The devision of the land of Defendants 1 to 5 is admitted by Defendants 6 & 7 in paragraph 15 of their affidavit in reply. Half the land given to Jain is 12 admitted. Defendants 6 & 7 claim to have entered into their agreement with Defendants 1 to 5 after inspecting their title. Their knowledge of the sale in favour of Jain shows their intrinsic knowledge of the claim of the Plaintiffs to the other half of the land of Defendants 1 to 5 as recited in the Agreement of Defendants 1 to 5 with Jain dated 14 th June 2003, which is a tripartite agreement, showing the land under plot X bounded as ABCD and separately shown in the schedules thereto also. 30.Mr. Mhatre on behalf of Defendant Nos.6 & 7 has drawn my attention to the judgment of the Supreme Court in the case of Jagan Nath Vs. Jagdish Rai A.I.R 1998 S.C. 2028 in which upon a sale to a bona fide purchaser for value without notice of the earlier agreement in a subsequent registered agreement, the earlier agreement is held to be not specifically enforceable. The Bank Account entries produced by Defendants 6 & 7 do not show that they are bonafide purchasers at all. It is only an attempt to pass off certain transfer entries after cash deposits as genuine payments. 31.Defendants 6, 7 & 9 cannot be allowed to further develop the Suit property. 32.Hence the following order:- 1. The Defendants shall not sell, transfer, alienate, encumber, develop or part with possession or create any third party rights in the Suit property pending the Suit. 13 2. The copies of Bank entries produced by Defendants 6 & 7 contained in 17 pages shall be kept on record in a sealed cover. The Plaintiffs shall be given 1 photocopy of the said pages. (SMT. ROSHAN DALVI, J.)