IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD PRESENT : : THE HON’BLE SRI JUSTICE N.V.RAMANA AND THE HON’BLE SRI JUSTICE P. DURGA PRASAD C.M.A No.851 of 2010 Dated:30-09-2011 Between: Bhamidipati Venkata Rama Krishna Chandra Sekhara Srinivas. ….Appellant. And Bhamidipati Venkata RAmana Murthy and others. ….Respondents. The Court made the following: THE HON’BLE SRI JUSTICE N.V.RAMANA AND THE HON’BLE SRI JUSTICE P. DURGA PRASAD C.M.ANo.851 of 2010 ORDER: (per the Hon’ble Sri Justice P.Durga Prasad) This appeal is directed against the Orders passed in I.A.No.1174 of 2009 in O.S.No.261 of 2009 by the IV Additional District Judge, Visakhapatnam on 04.08.2010. The respondent Nos.1 and 2 herein have filed the above said petition under Order 39 Rules 1 and 2 Section 151 CPC for grant of ad-interim injunction restraining the respondents from alienating the petition schedule properties to third parties till the disposal of the suit. The parties in the appeal are being referred to as mentioned in the petition before the lower Court. According to the petitioners, the 1st respondent is their younger brother and their father purchased a house covered by 550 sq. yards in the year 1989 from VUDa under a registered sale deed date 25.08.1989 and he executed registered gift deeds in favour of the petitioners and 1st respondent for the undivided area of 183.33 sq.yards each with primary object of that they should develop the property jointly by dismantling the old structure under Memorandum of Understanding to facilitate individual right of occupancy without hindrance to others. He further stated that they jointly applied for municipal plan for renovation of the property consisting of ground floor for parking and three floors. The entire cost of construction was Rs.72,00,000/- and each of them has to contribute Rs.24,00,000/- each and as the 1st respondent was an unemployee, they arranged his share of expenditure for construction and 2nd petitioner lent an amount of Rs.8,00,000/- as a personal loan to the 1st respondent towards his share and they entered into a Memorandum of Understanding on 30.04.2005, as per the said understanding 1st floor goes to the 2nd petitioner and the 2nd floor goes to the 1st petitioner and the 3rd floor goes to the 1st respondent, with common areas like staircase, corridor etc., to be enjoyed jointly. As per the said Memorandum of Understanding, if any one of the party wants to dispose of his share, he has first offer the other two parties by written request and wait for one month, whichever party pays highest sale price, the same will be given to the party and for any reason both the other parties are not interested to take, then the same will be offered for sale to outsiders. In the month of April, 2008 the 1st respondent intended to sell away his share described in the suit schedule as item Nos.1 and 2 without adhering to the terms and conditions of the said Memorandum of Understanding to third parties and as the 2nd petitioner objected for the same, the 1st respondent got issued a lawyer’s notice with false allegations that he intended to sell away his share of 3rd floor for an amount of Rs.1,08,00,000/- besides Rs.2,00,000/- for common areas and asking him to get ready for registration in two days failing which he would sell away the same to third parties and after receipt of the said notice, the 2nd petitioner issued a reply notice expressing his intention to purchase the said property for Rs.48,25,683/- which was valued by the Sub-Registrar and also demanded 1st respondent to clear of the loan amount of Rs.8,00,000/- contributed by him during the construction. Again on 21.04.2008 the 1st respondent issued another reply notice to the notice issued by the 2nd petitioner that he intends to sell away the property to the outsiders and agreed to repay the amount of Rs.8,00,000/- to the 2nd petitioner. Again the 2nd petitioner issued another reply notice and objected the attitude of the 1st respondent and advised him to stop selling of the same. Subsequently, the 1st respondent colluded with the 2nd respondent played a fraud against the 2nd petitioner stating that the 2nd respondent is interested in purchasing the property for Rs.1,08,00,000/- and Rs.2,00,000/- for common areas and paid the loan amount of Rs.9,00,000/- to the 2nd petitioner, but it was learnt that 2nd respondent never paid any amount to the 1st respondent. The 1st petitioner also issued notice to the 2nd respondent on 04.05.2009 expressing his willingness to purchase the property by offering an amount of Rs.1,00,000/- more than the market value of the Sub- registrar to the 1st respondent. The 1st respondent has illegally sold away the item No.1 of the suit schedule property for an amount of Rs.25,42,000/- to the 2nd and 3rd respondents under registered sale deeds dated 18.06.2009, which is lesser than what the 1st respondent offered to them and the 1st respondent is also trying to alienate item No.2 of the suit schedule property in violation of the terms and conditions of Memorandum of Understanding. Hence, the respondent No.1 has to be restrained from alienating the item No.2 of the suit schedule property to third party till the disposal of the suit. The 1st respondent opposed the said application by filing the counter and the same was adopted by the respondent Nos.2 and 3. The 1st respondent admitted about the purchasing of property by his father, later gifting the same to the petitioners and to him and about their entering into Memorandum of Understanding and subsequently constructing ground floor and 3 floors and also taking possession of each floor by them. According to him, he has given the 1st choice and option to the petitioners 1 and 2 through a legal notice dated 11.04.2008, upon receipt of notices, the petitioners replied through their counsel offering to purchase the entire third floor for around half of the price at which it was offered by the 1st respondent. As they have not come forward to accept the offer made by him under the legal notice dated 11.04.2008, it was considered as a failure on their part and consequently the 1st respondent issued another notice dated 21.04.2008 stating that he proposed to sell away a part of the third floor to outsiders after completion of one month. The 2nd petitioner also issued reply notice expressing his inability to purchase the property. The offer of the petitioner Nos.1 and 2 to purchase the property by paying Rs.1,00,000/- more than the market value as fixed by the Sub-Registrar, is only a play to defeat the contemplated sale transaction of a part of the third floor in favour of respondent Nos.2 and 3, and the said offer is not genuine and it was elapsed after one month. The 2nd and 3rd respondents have negotiated with the 1st respondent by that time and offer of Rs.1,00,000/- more than the market value of the Sub-Registrar is definitely very low and inadequate price. The 1st respondent received almost more than the amount mentioned in the sale deed dated 18.06.2009 and there is no violation of any of the terms and conditions of Memorandum of Understanding and sought for dismissal of the petition. During the course of enquiry, Exs.A.1 to A.13 were marked on behalf of the petitioners and no documents were marked on behalf of the respondents. The lower Court by taking into consideration of the said documentary evidence allowed the petition restraining the respondent No.l from alienating the item No.2 of suit schedule property in any manner till the disposal of the suit. Aggrieved by the same, the present appeal is filed by the 1st respondent therein. The appellant’s counsel has pleaded that as per the Memorandum of Understanding, he has offered the property to the petitioners through his legal notice dated 11.04.2008 for sale for Rs.1,08,00,000/- besides Rs.2,00,000/- for common area and the same was not accepted by the petitioners, as such he has sold the item No.1 of the suit schedule property in favour of respondent Nos.2 and 3 and he has not violated any of the terms and conditions of the Memorandum of Understanding and as the petitioners have not accepted the offer made by him, they are not entitled for injunction restraining him from alienating the item No.2 of the suit schedule property. The counsel for respondent Nos.1 and 2 herein has pleaded that as per the Memorandum of Understanding the appellant ought to have sold the property to them first and on their refusal, he is entitled to sell away the property to 3rd parties. Even though they offered to purchase the property for more than Rs.1,00,000/- of the market value fixed by the Sub- Registrar, the appellant has not given his consent. Thereafter, in violation of the Memorandum of Understanding sold the item No.1 of suit schedule property to 3rd parties. There is no dispute between the parties with regard to ownership of the property and also the petitioners and 1st respondent entering into Memorandum of Understanding. As per the said Memorandum of Understanding if any one of the party wants to dispose of his share, he has first offer the other two parties by written request and wait for one month, whichever party pays highest sale price, the same will be given to the party and for any reason both the other parties are not interested to take, then the same will be offered for sale to outsiders. Admittedly, the 1st respondent has issued a notice on 11.04.2008 through his counsel to the petitioner Nos.1 and 2 intimating the petitioners that he intends to dispose of the property at the rate of Rs.3,000/- per sq. feet, which comes to Rs.1,08,00,000/- besides Rs.2,00,000/- package for common area etc., car-parking. As per the oral understanding and commitment, he is giving 1st and 2nd options, in respect of his property, to the petitioners and called upon them within 24 hours from the time of receipt of the notice to communicate their intention either by way of reply or through telephone whether they are interested in utilizing the first two options in respect of purchasing his property. The 2nd petitioner got issued a reply notice on 18.04.2008 informing that he is willing to purchase the top floor and 1/3rd rights of undivided and unspecified area of 550 sq. yards, for Rs.48,25,683/- as per the 1st option specified in Memorandum of Understanding and also requested to pay back the loan amount of Rs.8,00,000/- taken by him. The 1st respondent got issued reply notice dated 21.04.2008 to the notice issued by the 2nd petitioner stating that he is refusing the offer made by the 2nd petitioner and going to dispose of the property after completion of one month period i.e. 11.05.2008 to 3rd parties as per his will and wish and as per the market value and he is ready to pay Rs.8,00,000/- to the 2nd petitioner. Thereafter, on 04.07.2008 a legal notice was got issued on behalf of the 2nd petitioner to the 1st respondent advising him to stop selling of the house to 3rd parties and asking him to come for arbitration immediately, for which no reply was issued by the 1st respondent. Thereafter, the petitioners have filed the suit against respondent Nos.1 to 3 with a prayer to directing the 1st defendant to execute registered sale deed in favour of the 1st plaintiff or his nominee and to deliver vacant possession of the suit schedule property or grant damages for an amount of Rs.57,43,270/- as an alternative relief and for cancellation of sale deed bearing No. 2186/089 dated 18.06.2009 executed by the 1st defendant in favour of the defendant Nos.2 and 3 in respect of item No.1 of suit schedule property and also prayed for permanent injunction restraining the 1st defendant not to alienate the item No.2 of the suit schedule property to the 3rd parties. As per the above said notices and reply notices, it is evident that the 1st respondent has given intimation to petitioners by legal notice dated 11.04.2008 expressing his intention to sell away the property at Rs.1,08,00,000/- besides Rs.2,00,000/- for common area and requested to express their willingness to purchase the property within 24 hours from the date of receipt of said notice and the 2nd petitioner has agreed to purchase the said property as per the rate fixed by the Sub-Registrar at Rs.48,25,683/-, which was not accepted by the 1st respondent and sold the property to 3rd parties. As per the Memorandum of Understanding entered into between the parties, the 1st respondent has to offer first to the petitioner Nos.1 and 2 by written request and wait for one month, whichever party pays highest sale price, the same will be given to the party and for any reason both the other parties are not interested to take, then the same will be offered for sale to outsiders. Therefore, the 1st respondent has to offer the said property to the petitioner Nos.1 and 2 and whoever pays highest price, he has to sell the said property to him. The 1st respondent has fixed the price of the property at Rs.1,08,00,000/- and Rs.2,00,000/- for the common areas and intimated the same to the petitioners to communicate their willingness within 24 hours, which is contrary to the terms and conditions mentioned in the Memorandum of Understanding. The 2nd petitioner expressed his willingness to purchase the said property at Rs.48,25,683/- as per the Sub-Registrar’s valuation and 1st petitioner offered to purchase the said property by paying Rs.1,00,000/- more than the market value as fixed by the Sub- Registrar, but the 1st respondent has not accepted the said offers made by the petitioner Nos.1 and 2 and sold the item No.1 of suit schedule property to 3rd parties. Whether the said sale transaction is valid or not or it is in contravention of Memorandum of Understanding has to be decided after due trial in the suit. Now, according to the petitioners, the 1st respondent is trying to sell away the item No.2 of the suit schedule property to 3rd parties. In view of offers made by the petitioner Nos.1 and 2 for purchasing the said property, as per the Memorandum of Understanding the prima-facie case is in favour of the petitioners and as the petitioners filed the suit for cancellation of sale deed executed by the 1st respondent in respect of item No.1 of suit schedule property and if the item No.2 of the suit schedule property is also sold in contravention of Memorandum of Understanding, the petitioners will be put to loss. Therefore, the balance of convenience and irreparable loss are in favour of the petitioners. Thus, the petitioners are entitled for the injunction as granted by the lower Court and there are no merits in the appeal. In the result, the Civil Miscellaneous Appeal is dismissed without costs. _______________________ JUSTICE N.V.RAMANA. _____________________________ JUSTICE P. DURGA PRASAD Dated:30-09 -2011 Ksp