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.652 of 2011 Dated:20-08-2011 Between: Yerramsetty Surya Prabhakara Naidu ….Appellant. And Kommoju Vasuki Krishnakanth and another ….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.A.No.652 of 2011 ORDER: (per the Hon’ble Sri Justice P.Durga Prasad) This appeal is directed against the Order and decreetal Order passed in I.A.No.353 of 2011 in O.S.No.11 of 2009 by the II Additional District Judge, West Godavari at Eluru. The appellant herein is the 2nd respondent in the said petition and 1st respondent herein is the petitioner and 2nd respondent herein is the 1st respondent in the said petition. The parties in the appeal are being referred to as mentioned in the petition before the lower Court. The petitioner has filed the petition under Order 39 Rule 1 read with Section 151 CPC for grant of interim injunction in his favour and against the respondents from ever changing the status quo at the schedule property and from ever alienating the schedule property in favour of third parties pending disposal of suit. According to him, he has filed the suit for specific performance of agreement of sale dated 01.09.2002, the 1st respondent taking advantage of his absence from Tanuku brought into existence a sham and nominal sale deed dated 11.03.2010 in respect of the schedule property in favour of the 2nd respondent and both of them are now proclaiming in the village that they would demolish the building in the schedule property and bring about a huge apartment complex in the vacant site or in the alternative they are further proclaiming that they would sell the vacant site in favour of 3rd parties. If such course is materialized, even if a decree is obtained at a later point of time, the petitioner may not be in a position to enjoy the fruits of the decree in its true letter and spirit and the damage caused to the schedule property cannot be compensated in terms of money, as such it would be an irreparable damage to him. Therefore, interim injunction may be granted against the respondents from ever changing the status quo at the schedule property and from ever alienating the schedule property in favour of any 3rd parties pending disposal of the suit. The 1st respondent filed a counter denying the allegations made in the petition and he pleaded that he never entered into any sort of agreement with the petitioner and he has executed the registered sale deed in favour of 2nd respondent and he is in peaceful possession of the said property. The alleged agreement of sale dated 01.09.2002 is a shame and nominal document and devoid of consideration. The petitioner is not entitled to make any claim in the main suit itself; as such the petition is liable to be dismissed. The 2nd respondent has filed counter denying the allegations made in the petition. According to him the petitioner is a imaginary figure and he is not in existence and he has to produce his identity before the Court. The address given by the petitioner is imaginary and no such person is residing in the said address and he is a bonafide purchaser of the suit schedule property under the registered sale deed dated 11.03.2010 and he has no knowledge or information regarding the alleged agreement of sale between the petitioner and 1st respondent in respect of the suit schedule property. Before purchasing the plaint schedule property, the 2nd respondent made enquiries and also obtained Encumbrance Certificate to find out any prior transactions and then only he has purchased the plaint schedule property. The aged and old building, in the schedule property was collapsed due to heavy rains in the 2nd week of July 2009. He has obtained the approved plan from Tanuku Municipality for the construction of commercial shopping complex in the schedule property. After obtaining the approved plan, he started 3 storied building shopping complex. By the time i.e. on 11.04.2001, the 2nd respondent had already constructed the Cellar and 1st floor of the building and 2nd floor of the building is under construction and he has invested more than Rs.20,00,000/- for the said constructions. He has also obtained loan of Rs.15,00,000/- from Union Bank of India, Main Branch, Hyderabad by mortgaging the property on 15.05.2009. He has also borrowed Rs.5,00,000/- from A.P. Mahesh Cooperative Urban Bank Limited, Hyderabad on 02.02.2011 by pledging his Gold jewelry for the purpose of construction of building. He has also obtained electricity connection bearing S.C.No.25739 for the commercial shopping complex under construction in the schedule property. As per the norms of the Municipality before obtaining approved plan, he has executed a deed in favour of Tanuku Municipality leaving site for the formation of the road. The petitioner himself admitted about the operation of lispendency and there is absolutely no necessity on the part of the petitioner to file the petition as the alleged agreement dated 01.09.2002 is a shame and nominal document without any consideration. The suit is barred by limitation and the petitioner has never expressed his willingness and readiness to perform his part of agreement. As such, he is not entitled to specific performance of agreement of sale as prayed in the suit. The petitioner failed to establish the prima-facie case and balance of convenience and irreparable loss; as such the petition is liable to be dismissed. On behalf of the petitioner, Exs.P.1 to P.10 were marked. On behalf of the respondents, Exs.R.1 to R.7 were marked. The learned District Judge by taking into consideration of the said documentary evidence has observed “that the respondents admitted the principal of Lis-pendency and weighing the balance of convenience in favour of the parties, directing the respondents to maintain status quo and not to proceed with any construction in the suit schedule property pending disposal of the suit is found proper. Accordingly the petition is allowed and the respondents are directed to maintain status quo over the suit schedule property pending disposal of the suit.” Aggrieved by the said Order, the 2nd respondent therein has filed the present appeal. Learned counsel for the appellant has pleaded that the petitioner has not taken any steps for obtaining the registered sale deed from 1st respondent as per the agreement of sale dated 01.09.2002 and the 1st respondent has denied about the alleged agreement of sale dated 01.09.2002 and also the consideration alleged to have been paid under the agreement of sale, as such the petitioner has to prove the execution of agreement of sale and passing of consideration under the said agreement of sale. Learned counsel for the appellant has further pleaded that after verifying the earlier alienation in respect of the suit schedule property by obtaining encumbrance certificate, he has purchased the property under the registered sale deed on 11.03.2010 for consideration of Rs.27,00,000/- from 1st respondent and after the said purchase, he has obtained the sanction from the Tanuku Municipality for making construction of commercial shopping complex over the suit schedule property. He has also obtained loan from Union Bank of India, Hyderabad by mortgaging the property and also gold loan for making the said construction. Thereafter, he started the construction and the construction is at the stage of 2nd floor. He has already obtained electricity service connection for the suit schedule property and if at this stage, he is stopped from making construction, he would be put to irreparable loss. Therefore, the Order passed by the learned District Judge is liable to be set aside. Learned counsel for the appellant has further pleaded that as the sale transaction is hit by lispendency he is not going to claim any equities even if the petitioner succeeds in the main suit, as such the Order passed by the learned District Judge is liable to be set aside. Learned counsel for the appellant has further pleaded that the petitioner has filed the suit for specific performance and in the alternative claimed for refund of the sale consideration of Rs.15,00,000/- along with another sum of Rs.16,83,500/- towards damages for the loss caused to him, as such the loss, if any, caused to the petitioner can be compensated. Learned counsel for the respondent/petitioner on the other hand has pleaded that the 1st respondent in the petition has entered into agreement of sale with him on 01.09.2002 for total consideration of Rs.16,83,500/- and he has made a payment of Rs.15,00,000/- on different dates by way of demand drafts, as such he has got prima- facie case in his favour and if the 2nd respondent is permitted to proceed with the construction over the suit schedule property, even if the suit is decreed in his favour, he has to suffer loss and the petitioner may claim equities and the loss caused to him cannot be compensated. As such the balance of convenience and irreparable loss are in his favour, therefore, the learned District Judge has rightly allowed the petition and directed the 2nd respondent to maintain status quo over the suit schedule property pending disposal of suit. Now, the point that arises for consideration is: Whether the petitioner is entitled for Order of status quo pending disposal of suit as ordered by the lower Court? P O I N T: The learned District Judge has ordered the 2nd respondent to maintain status quo over the suit schedule property mainly on the ground that the 2nd respondent is in possession of the schedule property and he has purchased the property pending litigation and he is proceeding with the construction and if the plaintiff succeeds in the suit, he has to undergo the questions on equities and much injustice is being caused to the petitioner. According to the petitioner, he has entered into agreement of sale with 1st respondent on 01.09.2002 and paid major part of the consideration amounting to Rs.15,00,000/- on different dates and he has field the suit for specific performance of agreement of sale dated 01.09.2002 against the 1st respondent. When the 1st respondent has filed his written statement, he came to know that the 2nd respondent has purchased the suit schedule property under the registered sale deed dated 11.03.2010 and making construction over the suit schedule property he has filed the present petition to restrain the respondents from making further construction. The petitioner has obtained an agreement of sale on 01.09.2002 from 1st respondent , which is marked as Ex.P.1 and he has paid advance of Rs.4,00,000/- at the time of settlement of bargain and at the time of execution of agreement of sale, he has paid Rs.1,50,000/- by way of demand drafts in the name of 1st respondent and the remaining balance amount of Rs.9,33,500/-, it was stipulated in the agreement that Rs.2,50,000/- to be paid within one week and to get the said payment endorsement recorded on the back of the sale agreement and the remaining balance of Rs.6,83,500/- is stipulated to be paid by the petitioner at the time of registration of the regular sale deed within two months there from i.e. by 31.10.2002 and it was also stipulated that the petitioner has to get the terraced building removed on his own before registration of regular sale deed and the 1st respondent has agreed to register the vacant site only after such removal of the building and after getting the site measured at the rate of Rs.3,700/- per square yard after taking the balance amount. In the event of any delay on the part of the petitioner in obtaining the regular sale deed, the petitioner has to pay interest at the rate of 36% P.A. till such time the regular sale deed is registered on the balance amount payable by the petitioner by then. Therefore, as per the said agreement, he has to obtain registered sale deed by 31.10.2002 by paying balance sale consideration. Admittedly, he has not paid the balance sale consideration within the date specified in the agreement, but he has paid the same subsequent to the date mentioned the agreement of sale. According to him, the time limit for registering the regular sale deed has been extended mutually by the petitioner and 1st respondent on 16.10.2005 till 31.01.2006, as averred in the plaint. Therefore, even if the said contention of the petitioner is accepted, the petitioner ought to have obtained the sale deed by 31.01.2006 by paying the balance sale consideration. But he has not taken any steps to get the registered sale deed in his favour. Moreover, he has only issued legal notice on 24.01.2009, which was returned un- served. On the other hand, the appellant/2nd respondent has purchased the suit schedule property under registered sale deed dated 11.03.2010 for consideration of Rs.27,00,000/- and took possession of the said property from the 1st respondent. Thereafter, he has obtained loan from the Union Bank of India and also obtained gold loan from A.P.Mahesh Cooperative Urban Bank Limited, Hyderabad and obtained the approval for making construction of the shopping complex over the schedule property from Tanuku Municipality on 09.12.2010. He also obtained electricity service connection in his favour. Before purchasing the said property, he has also caused enquiries and obtained encumbrance certificate and the said encumbrance certificate is marked as Ex.R.1. The said certificate does not disclose any previous alienations by the 1st respondent. Therefore, it has to be presumed that the 2nd respondent is the bonafide purchaser for valid consideration. Even after the purchase he has taken necessary steps for making construction of shopping complex over the suit schedule property by obtaining necessary permission from the Tanuku Municipality and necessary loans from the banks by mortgaging the property and pledging the gold. Even though the 2nd respondent has purchased the suit schedule property after filing of suit, there is no material on record to show that he is aware of filing of the suit by the petitioner. Moreover, 2nd respondent was added only after filing of the written statement by the 1st respondent. Even otherwise as the 2nd respondent has purchased the property pending litigation and making the construction over the said property; the same is subject to the result of the suit. Therefore, prima-facie case is in favour of the 2nd respondent than in favour of the petitioner. The petitioner has filed the suit for claiming relief of specific performance of agreement of sale and in the alternative for refund of sale consideration along with damages. As the 2nd respondent making construction of shopping complex by obtaining necessary permission from the Municipality and loans from the banks, if he is prevented from making construction at this stage, he will be put to irreparable loss, even if the suit is decreed in favour of the petitioner, the petitioner can be compensated by awarding suitable damages caused to him in view of the construction made by the 2nd respondent. The lower Court observed that 2nd respondent has not undertaken that he is ready to loose the construction and the 2nd respondent may also claim equities if the suit is decreed. The 2nd respondent’s counsel has categorically stated that he is not going to claim any equities in case the petitioner succeeds in the main suit. Even if the petitioner sustains any loss due to the acts of the 2nd respondent, he can be compensated by awarding damages as claimed. Therefore, in view of the above the balance of convenience and irreparable loss are in favour of the 2nd respondent. Since the prima-facie case, balance of convenience and irreparable loss are not in favour of the petitioner, he is not entitled for Order of maintaining status quo as ordered by the lower Court. In the result, the Civil Miscellaneous Appeal is allowed. Consequently, the Orders passed in I.A.No.353 of 2011 in O.S.No.11 of 2009 by the II Additional District Judge, West Godavari at Eluru are hereby set aside and it is made clear that any construction made by the 2nd respondent on the suit schedule property is subject to the result of the suit and he is also not entitled to claim any equities in case the petitioner succeeds in the main suit. No costs. _______________________ JUSTICE N.V.RAMANA. _____________________________ JUSTICE P. DURGA PRASAD Dated:20-08-2011 Ksp