IN THE HIGH COURT OF GUJARAT AT AHMEDABAD APPEAL FROM ORDER No 191 of 2001 AND APPEAL FROM ORDER No 192 of 2001 For Approval and Signature: Hon'ble MR.JUSTICE J.R.VORA ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO ------------------------------------------------------------- J R ASSOCIATES Versus SHASHIKANT CHIMANBHAI PATEL -------------------------------------------------------------- Appearance: 1. Appeal from Order No. 191 of 2001 MR SB VAKIL for Appellants MR MIHIR THAKORE for TARESH J BHATTJI for Res. No. 1-6 MR AM KAPADIA for Respondent No. 7 - 13 2. Appeal from Order No. 192 of 2001 MR SB VAKIL for Apellant MR ND NNANAVATI for T.J. BHATTJI for Res. No.1-6 -------------------------------------------------------------- CORAM : MR.JUSTICE J.R.VORA Date of decision: /09/2001 COMMON C.A.V. JUDGEMENT 1. Both these Appeals are interrelated and pertains to the same subject matter though have arisen from different orders of separate suits, both the Appeals were heard together and are decided by this common judgement. Learned Advocates of both the sides have agreed to hear both the matters finally. Hence, the matters are decided finally. 2. Brief facts of the case are as under : 2.1 Respondents No. 1 to 6 executed in favour of appellant firm a development agreement-cum-banakhat on 9th August, 1993 in respect of Final Plot Nos. 194, 342 of Town Planning Scheme No.18 and Final Plot Nos. 72, 75, 365, 370 and 383 of Town Planning Scheme No. 19 of the aggregate area of 39,864 sq.mts. because all these lands covered by the Town Planning Scheme in the city of Baroda at Mangalpur and situated in residential zone. 2.2 Regarding execution of development agreement-cum - banakhat on 9th August, 1993, parties i.e. developers appellants herein and land owners who are respondents No. 1 to 6 herein have dispute and have put their own contentions. 2.3 The land developers - appellants herein contended through out that in the earlier part of of the day of 9th August, 1993, the land owners executed the agreement which is placed at Annexure-A of Spl. Civil Suit No. 521 of 2000 and copy of which is placed at page 213 of compilation of Appeal From Order No. 191 of 2001, and along with the same, the land owners also executed in favour of present appellant No.3 - Dineshbhai, a partner of the developer firm, a irrevocable power of attorney on the same day, which is placed at Annexure-B of Spl. Civil Suit No. 521 of 2000. Further, it is the case of the plaintiffs that later on, on the same day i.e. on 9th August, 1993, the land owners had a second thought and got prepared a revised agreement and in the evening of 9th August, 1993, the land owners along with their maternal uncle Manubhai C. Patel and brother-in-law Mahendrabhai, approached the developers - appellants herein with a revised agreement and the agreement executed earlier in the day, which is Annexure-A was abandoned, and the agreement which is placed at Annexure-C of Spl. Civil Suit No. 521 of 2000 was executed and Annexure-C agreement is placed at page 230 of compilation of Appeal From Order No. 191 of 2001. 2.4 For the sake of brevity, all these three documents hereinafter will be referred to as "Annexure-A", "Annexure-B" and "Annexure-C" respectively. 2.5 The land owners i.e. respondents No. 1 to 6 have their own story to disclose in this respect saying that while executing the document Annexure-A, some papers were got signed by the developers from the land owners and, in fact, only agreement - Annexure-A was executed and agreement Annexure-C was got up and concocted, which never intended to be executed by the land owners. 2.6 The main difference between Agreement Annexure-A and Agreement - Annexure-C is, in Annexure-A agreement, the consideration of the land which would be freehold land, was fixed at Rs.91 per sq.metrs. while in agreement Annexure-C for the freehold land in the T.P. Scheme No. 18, the price was reduced to Rs. 51 per sq. metrs. In addition to this, the land owners were entitled to 40% share in price realised over and above the rate of Rs. 51/- per sq. metrs. and the price of freehold land of T.P. Scheme No. 19 was fixed at minimum of Rs. 21/- per sq. feet and land owners were entitled to 40% share in any higher price realised. In both the agreements, the consideration for the excess vacant land was depending upon the price as might have been fixed by the Competent Authority under the Urban Land (Ceiling & Regulations) Act on sanctioning the scheme which was put up under Section 21 of the said Act. 2.7 The land of the land owners was in excess within the meaning of the Urban Land (Ceiling and Regulations) Act, 1976, necessary declaration was made before the competent authority, and the competent authority under the said Act vide his order dated 27th of December, 1993 held that the land owners were entitled to hold 11999.68 sq. meters as retainable land, and the remaining land out of total 39864 sq. meters, would be an excess land. Meaning thereby that abut 12,000 sq. meters of land out of the land covered by the agreement was declared as retainable land by the land owners while remaining 27864 sq. meters of land was declared as an excess land. The position in pursuance of the above order was as under : --------------------------------------------------------- Final Area in square meters Plot No. ----------------------------------------------- Total Margin Retainable Excess --------------------------------------------------------- 194 1392 128.25 1263.75 -- 150 1669 202.50 1466.50 -- 342 2313 750.37 1562.63 -- 370 318 101.40 206.60 -- 365 9650 579.00 1930.00 7141 75 12624 1030.40 -- 12624 72 5375 709.48 2998.95 1662.97 383 8206 953.55 -- 8206.00 331 2794 222.75 2571.25 -- -------------------------------------------------------- 2.8 It was decided to place a scheme before the competent authority as per Sec. 21 of the Urban Land (Ceiling and Regulation) Act, 1976 which was incorporated in the above agreements. 2.9 On 12th December, 1997, the present appellant firm filed a Spl. Civil Suit No. 820 of 1997 against the present respondents No. 1 to 6 for declaration and permanent injunction basing their suit on Agreement Annexure-C, which was produced on the record of this suit as Mark 4/1 and basing their suit on irrevocable power of attorney to declare that the defendants therein were bound to fulfil all conditions of agreement - Annexure-C dated 9th August, 1993 and the act of the defendants therein to restrain the plaintiffs from exercising their rights under the irrevocable power of attorney and in pursuance of the agreement Annexure-C was contrary to law, and the suit was also filed for the specific performance of the Agreement - Annexure-C, wherein permanent injunction against the present respondents being defendants therein was also prayed for restraining them dealing in respect of the suit lands from selling, transferring, creating any third party rights interfering with the possession of the appellant firm and its partners from exercising the rights under the power of attorney. Along with this suit, an Application - Exh.5 for the temporary injunction also came to be filed by the present appellants - plaintiffs therein to grant ex parte interim injunction restraining the defendants - land owners from dealing in respect of the suit land from selling, transferring, creating any third party rights, interfering with the possession of the appellants firm and from interfering with the appellants firm and its partners from exercising the rights under the power of attorney. The Court on request of the plaintiffs therein appointed the Court Commissioner and a panchnama was drawn of the suit property. 2.10 In the above said Spl. Civil Suit No. 820 of 1997, ad interim injunction was granted by the Trial Court as prayed for above on 15th December, 1997. Urgent show cause notice was issued to the present respondents No. 1 to 6 defendants therein, but even after service of notice and the summons of the suits, respondents herein did not appear in the above said suit and, therefore, the ad interim injunction granted as prayed for by the plaintiffs came to be made absolute till disposal of the suit by the Trial Court on 10th December, 1998. 2.11 The Urban Land (Ceiling and Regulation) Act, 1976 was repealed on 30th March 1999. Although till the repeal of the said Act, no scheme under Section 21 was approved by the Government for the excess land as declared above nor any price was fixed by the competent authority for the excess vacant land declared under this Act, admeasuring 27864 sq.meters as aforesaid. 2.12 Thereafter, appellant No. 3 herein, the power of attorney holder, vide Annexure-B executed 12 registered sale deeds between 5th November, 1999 and 12th November, 1999 in respect of the excess vacant lands of Final Plots No. 365, 75 and 383 hereinabove. Sale deeds also came to be executed in respect of the excess land of Final Plot No. 72 on 23.10.2000. 2.13 It appears that on 08th March, 2000 Chirag and Amit, sons of respondent No.1 herein filed Spl. Civil Suit No. 205 of 2000 against the plaintiffs herein for the partition of property by metes and bounds of the suit lands. An application Exh. 5 for interim injunction also came to be filed by Chirag and Amit. At initial stage, ad interim order restraining transfer of suit land was granted in favour of Chirag and Amit which was ultimately vacated. The present respondents herein filed reply in the above said suit wherein according to the appellants herein they did not contend that agreement Annexure-C was not executed and the said suit was in respect of agreement Annexure-C. 2.14 About an year and three months after, the order passed by the Trial Judge in Spl. Civil Suit No. 820 of 1997 on 10.12.1998 referred to above, confirming interim injunction in favour of the present appellants was challenged by the present respondents in an Appeal From Order No. 114 of 2000 before this Court along with a Civil Application No. 2072 of 2000 for condonation of delay in filing of the Appeal. The application for condonation of delay was withdrawn by the present respondents stating that the respondents herein have filed the modification application under O.39 R.4 of the Civil Procedure Code of the order passed on 10th December, 1998. 2.15 The present respondents on 20th August, 2000 filed an application at Exh. 31 in Spl. Civil Suit No. 820 of 1997 under Order 39 R.4 of the C.P.C. for modification of the order passed by the Trial Court below Application Exh.5. Before that, the respondents herein and defendants in the Spl. Civil Suit No. 820 of 1997 filed their reply with an application to take the reply of Exh.5 on record, which was granted, and the reply to the written statement and reply of Exh.5 in Spl. Civil Suit No. 820 of 1997 was taken on record by the Trial Court. 2.16 Simultaneously, plaintiffs - Respondents No. 1 to 6 herein also filed a Spl. Civil Suit No. 521 of 2000 on 17.6.2000 in respect of the same property which is the subject matter of Spl. Civil Suit No. 820 of 1997. In sum and substance, it was prayed that the excess land sold by so called power of attorney holder appellant No.3 herein vide registered deed as said above, after the repeal of the Urban Land (Ceiling and Regulations) Act, 1976 were unlawful, void and not binding to the plaintiffs i.e. respondents herein. It was prayed that the development agreement which is placed at Annexure-C was also void and the defendants therein i.e. appellants herein had no right to deal with the property in pursuance of alleged irrevocable power of attorney because the same was revoked by the land owners. It was also prayed that the land which is declared excess by the competent authority under the Urban Land (Ceiling and Regulations) Act, 1976 was in possession of the plaintiffs respondents herein and the developers appellants herein be restrained from changing or altering the physical conditions of the land in question, and not to act as to destruct the ownership of the land owners. Along with this suit, an application for temporary injunction as Exh.5 also came to be filed for the temporary injunction restraining the defendants from interfering and obstructing in possession of land Final Plot Nos. 365, 75, 383 and Final Plot No. 347, 370, 383 of village Manjalpur, Taluka - District Baroda, which was the excess land as declared by the Urban Land Ceiling authority. Temporary injunction was also sought for restraining the defendants - appellants from changing the physical condition of the land and from transferring the suit land or its part in any manner. Temporary injunction was also sought for restraining the defendants therein appellants herein to proceed ahead with the development procedure in respect of the above said suit land. 2.17 The learned Trial Judge simultaneously decided Application Exh. 5 in Spl. Civil Suit No. 521 of 2000 filed by the present respondents No. 1 to 6 herein and application for modification filed at Exh.31 in Spl. Civil Suit No. 820 of 1997 for modification under Order. 39 Rule 4 of the Civil Procedure Code of the order passed by the Trial Court in Spl. Civil Suit No. 820 of 1997 on 10th December, 1998. 2.18 Respondents No. 7 to 13 in Appeal No. 191 of 2001 to whom the appellants herein have sold the excess vacant land by registered deeds in pursuance of power of attorney as said above. 2.19 After hearing both the proceedings as said above, learned Trial Judge vide his order dated 17th April, 2000, below Application Exh. 31 in Spl. Civil Suit No. 820 of 1997 filed by the present appellants came to the conclusion that the order passed by the Trial Court in favour of the appellants below Exh. 5 on 10th December, 1998 was required to be modified in the form of clarification that in pursuance of the above said order passed below Exh. 5 in Spl. Civil Suit No. 820 of 1997, the plaintiffs i.e. appellants herein, shall not transfer the excess land in any manner, and shall not make any construction over the excess land. It was further clarified by the Trial Court that the plaintiffs i.e. appellants herein shall not make breach of Condition No.8 of the Agreement - Annexure-C, which was placed at Mark 4/1 in Spl. Civil Suit No. 820 of 1997, and shall observe the same. It was further clarified by the Trial Court that the defendants - appellants herein shall pay actual price of land to the plaintiffs as per agreement Mark 4/1 i.e. Annexure-C. While below Application Exh.5 filed by the present respondents No. 1 to 6 in Spl. Civil Suit No. 521 of 2000, the Trial Judge was pleased to allow Application Exh.5 for the temporary injunction in favour of the present respondents No. 1 to 6 herein to the extent that the defendants appellants herein were directed not to transfer the excess land as mentioned in the suit to any other person in any manner and the appellants - defendants therein were directed not to make any construction over the excess land, not to make breach of Condition No.8, and to observe the same and pay price to the plaintiffs i.e. respondents No. 1 to 6 herein as per Annexure-C. 2.20 Being aggrieved by the above said orders passed by the Trial Court on 17th April, 2001 below Application Exh.5 in Spl. Civil Suit No. 521 of 2000 and below application Exh. 31 for the modification in Spl. Civil Suit No. 820 of 1997, both these Appeals have been filed by the present appellants. Appeal No. 191 of 2001 is filed against the order passed by the Trial Judge below application Exh.5 in Spl. Civil Suit No.521 of 2000 while Appeal No. 192 is filed by the appellants against the order passed by the Trial Judge below Exh. 31 in Spl. Civil Suit No. 820 of 1997. 3. Learned Advocate Mr.S.B.Vakil for the appellants in both the Appeals, learned Advocate Mr. Mihir Thakore for Respondents No.1 to 6 and learned Mr. A.M. Kapadia for Respondents No. 7 to 13 in AO No. 191 of 2001 and learned Advocate Mr. N.D. Nanavati for respondents in AO No. 192 of 2001, were heard. 4. Learned Advocate Mr. S.B. Vakil has urged on behalf of the appellants in both the appeals that the Trial Court has travelled beyond the relief claimed by the land owners. No relief was claimed that the present appellants are bound by Condition No.8 and must act accordingly. Even then, erroneously, the mandatory injunction is granted in favour of the land owners directing the appellants to act as per Condition No.8 Annexure C wherein no obligation at all is cast by such condition No.8 upon present appellants. So far as modification is concerned, there was no case for modification under Order 39 R.4 of the Civil Procedure Code because the latter part of the proviso of Rule 4 provides that, where an order of injunction is passed by Court after giving to a party an opportunity of being heard, the orders shall not be discharged, varied or set aside, except the Court is satisfied that the order has caused undue hardship to that party and that circumstances has necessitated such change or variation. It was urged that the summons and the Notices of Spl. Civil Suit No. 820 of 1997 as well as Application Exh.5 were duly served upon the present respondents No. 1 to 6 but they did not choose to appear and file their reply. Not only that but they preferred an Appeal From order before this Court which was withdrawn. The same was delayed and application for the delay condonation was filed, which came to be withdrawn and, hence, there was no case for the changed circumstances or any hardships, which even after due service of notice, and the summons was not conveyed by the respondents No. 1 to 6 before the Court. 4.1 The learned Advocate Mr. Vakil criticised the approach of the Trial Court, in the order impugned below application - Exh. 31, that suppression is attributed to the present appellants, where there is no suppression at all, and only on this ground, the order dated 10th December, 1998 came to be modified. It was urged that it was not obligatory upon the appellants to state before the Court that earlier to Annexure-C an agreement was executed because the same was abandoned by respondents No. 1 to 6 and that, the appellants relied on the agreements Annexure-C and the same was pleaded and was relied upon by the plaintiffs and hence there was no suppression of material facts as has been attributed by the Trial Court for the modification of the order dated 10th December, 1998. 4.2 The learned Trial Judge has failed to consider that the land which was declared excess, was transferred and conveyed to respondents No. 7 to 13 of Appeal From Order No. 191 of 2001, by virtue of power of attorney, which was irrevocable, and hence the question of fixing the price as mentioned by the Trial Judge would not have arisen at all. This cannot be labelled as undue transfer under the guise of the order passed by the Trial Court on 10th of December, 1998 in favour of the present appellants. 4.3 The attention of this Court was drawn to the irrevocable power of attorney which is placed at Annexure-B, and according to the learned Advocate for the Appellants, it is clear that unfettered powers are given to Dineshbhai, a partner of the appellant firm for transferring and selling of the land. 4.4 In fact, it was urged that considering the price fixed in both the agreements i.e. Annexure-A and Annexure-C, respondents No. 1 to 6 herein are entitled to more amount in agreement Annexure-C instead of agreement Annexure-A. 4.5 It was vehemently contended that in fact agreement Annexure-C was prepared by the present respondents No. 1 to 6 and with that agreement respondents No. 1 to 6 approached the appellants and appellants had agreed to the agreement at Annexure-C and, therefore, when we compare both the agreements, Annexure-C is more beneficial to the respondents No. 1 to 6 herein and, hence, the contentions put forward by the appellants that agreement - Annexure-C was executed and Annexure-A was abandoned must be treated as genuine. In this respect, Manubhai C. Patel has also filed his affidavit in the Trial Court, which is placed at page No. 341 of the paper book. 4.6 When the suit was filed by the sons of respondents No.1 herein relying on agreement Annexure-C and even though the present respondents filed their reply to this suit, nowhere it was stated that agreement Annexure-A and not Annexure-C was executed and thereby the respondents herein have not controverted that the agreement - Annexure-C was not executed. 4.7 It was contended that vide agreement Annexure-A or Annexure-C, any of the agreements, ultimately be proved to have been executed, but so far as, the injunction granted in favour of the appellants, this fact did not make any difference because the work of development and selling of land was in pursuance of irrevocable power of attorney - Annexure-B, and so there was no case made out by the respondents No. 1 to 6 of suppression of material fact, and the modification of the order passed on 10th December, 1998 by the Trial Court in favour of the appellants. 4.8 In view of the above contention, learned advocate for the appellants urged that reasoning of the Trial Judge granting Exh. 31 are perverse, more so because an opportunity was afforded for respondents No. 1 to 6 herein to controvert the ex parte injunction granted in favour of the plaintiffs but they did not appear and even withdrew the Appeal From Order and the Application filed for the condonation of delay. 4.9 Criticising the Trial Court, learned Advocate for the appellants contended that the Trial Court said that the Trial Court was not able to decide which one of the agreements i.e. Annexure-A or C was executed. In fact, it was the duty of the Trial Court to decide which of the two agreements was executed and then to decide the issue regarding the modification or granting of the injunction in favour of the respondents No. 1 to 6. 4.10 The order of the Trial Court to pay price to respondents No.1 to 6 as per Condition No.8 of Annexure-C is absolutely perverse, and no such injunction in the mandatory form can be granted in favour of the respondents No. 1 to 6 at this juncture because there was no obligation on the part of developers - appellants herein. 4.11 It was contended that as per the panchnama drawn by the Court Commissioner in Spl.Civil Suit No. 820 of 1997, the possession of the land, including the excess land was with the developers and the developing activity was going on and the construction was also going on. 4.12 It was contended on behalf of the appellants by learned Advocate Mr. Vakil that even if it is held that the agreement - Annexure-A is executed, Clause No. 17 of the Annexure-A clearly indicates that the parties agreed that in case of repeal of Urban Land (Ceiling and Regulation) Act, 1976, the agreement executed would stand. Meaning thereby that the repeal of the Urban Land (Ceiling and Regulations) Act, 1976, would not make any difference so far as the subject matter of the agreement and