1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO. 2640 OF 2008 IN SUIT NO. 1467 OF 2005 Satish K. Kothari (HUF) & Anr. ....Plaintiffs V/s. Smt. Darshana A. Mehta & Ors. ....Defendants Mr. Pesi Mody a/w. Pesi Mody i/b. M/s. Vigil Juris, Advocates for the Plaintiffs. Mr. Simil Purohit i/b. M/s. J. J.Juris, Advocates for Defendant Nos. 6 to 10/Applicants. Ms. Lata Bachani i/b. M/s.I. R. Joshi & Co., Advocates for Defendant Nos. 1 to 5. CORAM : R. V. MORE, J. DATE : 29th JANUARY, 2010. P.C. : Heard Mr.Purohit, learned Counsel for Defendant Nos. 6 to 10 and Mr. Mody, learned Counsel for the Plaintiffs. 2. The notice of motion is taken out for the following relief : a) That the lis-pendens notice registered by the Plaintiffs with the Sub-Registrar of Assurances at Kamrej District, Surat under No.2393 of 10th September 2005 in respect of property bearing Block Nos.135, 136, 137, 138, 139, 140, 141, 142, 143, 329 and 368 be cancelled and/or revoked 2 and the Sub Registrar of Assurances at Kamrej District Surat be directed to cancel the said entry in his Register and be directed to deregister the said lis pendens notice.” 2. The suit is filed by the Plaintiffs for dissolution of the partnership firm in the name and style of M/s. Samir Diamond Manufacturing and declaration that they have 20% share in the profits, losses and assets of the suit firm. Declaration is also claimed that the properties mentioned in Exhibit “B” annexed to the plaint forms part of the assets of the suit firm. In the alternative, decree was claimed against Defendant No.6 to specifically perform the agreement described in paragraph 7 of the plaint and to forthwith transfer the said property in the name of the suit firm. 3. In the present notice of motion, we are concerned with the properties mentioned at serial nos. 3 & 5 i.e. 123 Bighas Land at Laskana, Taluka – Kamrej, Surat (for the sake of brevity called “said suit land”). It is a specific case of the Plaintiffs that the Defendant No.6 was closely connected with the partners of the firm and was in fiduciary relationship with them. It is also the case of the Plaintiffs that the suit the partners of the said suit firm were not agriculturist and therefore, the suit land was purchased in the name of Defendant No.6 and the entire consideration was paid from the funds of the partnership firm. 4. The Plaintiffs took out notice of motion no. 1668 of 2005 for appointment of the Court Receiver in respect of the entire suit properties. However, this 3 Court refused to appoint the Court Receiver on the said suit land. The Plaintiffs have registered lis pendens notice regarding pendency of the present suit with the Sub-Registrar of Assurances at Kamrej District on 10th September, 2005 in respect of the said suit land. The Defendant Nos. 6 to 10 thereafter, have taken the present notice of motion for cancellation and/or revocation of the said lis pendens notice. 5. The law regarding registration of lis pendens is laid down by the Privy Council long back in the year 1948. The Privy Council in Gouri Dutt Maharaj Versus Sukur Mohammed and Ors. reported in A.I.R. (35) 1948 Privy Council 147 held that the broad purpose of Section 52 is to maintain the status quo unaffected by the act of any party to the litigation pending its determination. It is further held that, the applicability of the said section cannot depend on the matters of proof or strength or weakness of the case on one side or the other in bonafide proceedings. The Supreme Court in the case of Kedarnath Lal (dead) by his legal representatives and Anr. Versus Sheonarain & Ors. reported in AIR 1970 Supreme Court 1717 (V57 C 366) reiterated the above principal and held that the doctrine of lis pendens applies irrespective of strength or weakness of the case on one side or other. It was also held that the only condition required to be followed was that proceedings must be bonafide. The learned Single Judge of this Court recently followed both the judgments of the Privy Council and the Supreme Court in the case of Shantilal Jethabai Khona Versus Anandrai Shivlal Dave & Ors reported in 2002 (2) Mh.L.J.. It must be mentioned that there is one more judgment of the learned Single Judge of the High Court in the case of B. J.Patel Versus M/s. 4 Vadilal Dolatram & Sons & Ors. reported in AIR 1982 Bombay 66. In this case, the learned Judge was considering the application for relief from lis pendens. The learned Judge has laid down the principal broadly to be complied in such kind of reliefs. The learned Single Judge held that the relief from lis pendens is discretionary relief and it will depend on several circumstances which interalia, can be, nature of the plaintiff’s case and the defence and the nature of the property market. It was further held that if the Court is convinced on the affidavits and the pleadings that even if all the evidence was led by the parties there is a very strong probability that the plaintiff will lose the matter, it will be very important factor, possibly conclusive for granting relief. The learned Single Judge in paragraph 4 of this judgment categorically stated that there is no reported case on the subject and thereafter, proceeded to consider the application for relief. The decision of the Privy Council in the case of Gouri Dutt Maharaj Versus Sukur Mohammed and Ors. reported in A.I.R. (35) 1948 Privy Council 147 as well as subsequent decision of the Supreme Court in the case of Kedarnath Lal (dead) by his legal representatives and Anr. Versus Sheonarain & Ors. reported in AIR 1970 Supreme Court 1717 was not brought to the notice of the learned Single Judge in the case of B. J. Patel Versus M/s. Vadilal Dolatram & Sons & Ors. reported in AIR 1982 Bombay 66. I have gone through the ratio of the above decisions and am of the opinion that it is a settled position that while considering the application for deregistration of the lis pendens notice, the strength or weakness of the case on one side or the other cannot be gone through and what is required to be seen, is whether the case of the Plaintiff is bonafide proceedings. 5 6. On the touchstone of the principle mentioned above, it is for the Defendant No.6 to show that the Plaintiffs’ case is not bonafide and then only, he can succeed in getting the relief of deregistration from the lis pendens. Mr. Purohit, the learned Counsel for Defendant Nos. 6 to 10 invited my attention to the pleadings in paragraph 7 of the plaint and submitted that it is the case of the Plaintiffs themselves that the entire consideration for purchase of the said suit land came from the funds of the partnership firm. He further pointed out that there is not material on record to show how this consideration was paid by the partnership firm. He further submitted that infact the said suit land was purchased in the name of Defendant Nos. 6 to 10 and their predecessor in title. The entire consideration was paid by these Defendants and their predecessor in title. He relied upon the statement of accounts of the Banks of the Defendant Nos. 6 to 10 in this regard. Thus, his case is that the said suit land was purchased by the Defendant Nos. 6 to 10 and their predecessor in title from their own funds and the suit partnership firm or the Plaintiffs and the Defendant Nos. 1 to 5 have no concern. 7. Mr. Modi, learned Counsel for the Plaintiffs, per contra contested the notice of motion. He submitted that the Defendant No.6 was closely connected with the partners of the suit firm and was in fiduciary relationship with them. The partners of the partnership firm were not agriculturist and therefore, the suit land was purchased in the name of Defendant No.6. In order to substantiate his contention at prima facie stage, he relied upon Exhibit “B” and “C” i.e. particulars of properties forming the part of assets of the suit firm and the minutes of order of the meeting between the partners of the suit firm held on 1st 6 July, 1994. He also invited my attention to affidavit in reply in which the Plaintiffs have asserted that before the purchase of the said suit land in the names of Defendant Nos. 6 to 10 and their predecessor in title, the said Defendants received cash, which is evident from their Bank account. He also relied upon the letter dated 25th April, 1995 written by the Chartered Accountant of Defendant Nos. 1 to 5 to the Chartered Accountant of the Plaintiffs, in this regard. 8. Having heard the learned Counsel for the respective parties and having gone through the respective pleadings alongwith the annexures thereto and the ratio of the judgments mentioned above, I am of the opinion that the case of the Plaintiffs cannot said to be malafide and therefore, relief as claimed by Defendant Nos. 6 to 10 cannot be granted. It is the specific case of the Plaintiffs as evident from paragraph 6 of the plaint that the Defendant No.6 was initially running the factory of the suit firm as a contractor. When the factory of the suit firm was transferred to a separate limited company, Defendant No.6 was made 33 1/3% shareholder in the said company. It is specifically averred that the Defendant No.6 was closely connected with the partners of the said firm and was in a fiduciary relationship with them and there was complete faith and trust between the partners of the suit firm and Defendant No.6. It was further case of the Plaintiffs that the said suit land was not purchased in the names of the partners of the said suit firm as they were not agriculturist and therefore, the same was purchased in the names of Defendant Nos. 6 to 10 and/or their predecessor in title and it was agreed between them to re-transfer the said suit land in the name of the suit firm. Under exhibit “B” annexed to the Plaint, the 7 details of the said suit land are given. Item nos. 3 & 5 states about suit land and total acrege of the suit land is shown to be 123 Bighas. Exhibit “C” is important for the purpose of arriving at prima facie conclusion whether the case of the Plaintiffs is bonafide or not. The said exhibit is a copy of minutes of meeting of the Mehta, Patel and Kothari Group. The minutes specifically shows that the Defendant No.6 was present and he is referred as “Bdp”. The said suit land is referred at serial no.3 and all partners agreed that the Plaintiffs’ group will have 1/3 share in this property. Thus, prima facie, I am satisfied that the case made out by the Plaintiffs is supported by the documents at Exhibit “C”. 9. Mr. Purohit, learned Counsel for the Defendant Nos. 6 to 10, submits that the said minutes of the meeting dated 1st July, 1994 are not signed by Defendant Nos. 6 to 10 and therefore, the same cannot be taken into consideration to record prima facie conclusion. This submission is however, without any substance, in view of the letter dated 25th April, 1995 written by the Chartered Accountant of Defendant Nos. 1 to 5 to the Chartered Accountant of the Plaintiffs. This letter reiterated that the meeting of the partners of the suit firm was held on 1st July, 1994 and the Defendant No.6 was present in the meeting. 10. Mr. Purohit, learned Counsel, relied upon the Banks’ Statements of the Defendant Nos. 6 to 10 in order to show the funds to purchase the said suit land came from Defendant Nos. 6 to 10 and not from the suit firm. However, it is a specific contentions of the Plaintiffs that immediately prior to the purchase of the said suit land, money in cash was deposited in the said Accounts. It is also 8 the case of the Plaintiffs that the money was advanced to these Defendants by the partners of suit firm prior to the purchase of the suit land. Whether the money was advanced by the partners from the funds of the suit firm or Defendants Nos.6 to 10 independently purchased the said land is matter of evidence and therefore no conclusion can be recorded at this stage. In order to decide Defendant Nos. 6 to 10’s notice of motion, what is required to be seen is whether Plaintiffs case is bonafide and whether Defendant Nos. 6 to 10 prove that the same is not bonafide. In the light of discussion made herein above, I am of the view that the case of the Plaintiffs cannot said to be malafide and therefore, the Defendant Nos. 6 to 10 are not entitled for relief as claimed in the notice of motion. The notice of motion is accordingly, dismissed. 11. It is made expressly clear that the observations, herein above are prima facie observations and made for the purpose of determining the issue involved in the present notice of motion, however the suit be decided independently on its own merit without being influenced by the above said observations. Sd/- (R. V. MORE, J.)