1 IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION. ORIGINAL CIVIL JURISDICTION. ORIGINAL CIVIL JURISDICTION. NOTICE NOTICE NOTICE OF MOTION NO.416 OF 2007 OF MOTION NO.416 OF 2007 OF MOTION NO.416 OF 2007 IN IN IN SUIT SUIT SUIT NO. 770 OF 2006 NO. 770 OF 2006 NO. 770 OF 2006 Padmini Hiralal Jain and another : Plaintiffs. versus Ashok Kumar Mishrilal Jain : Defendant ALONG ALONG ALONG WITH WITH WITH NOTICE NOTICE NOTICE OF MOTION NO.1697 OF 2007 OF MOTION NO.1697 OF 2007 OF MOTION NO.1697 OF 2007 IN IN IN NOTICE NOTICE NOTICE OF MOTION NO.416 OF 2007 OF MOTION NO.416 OF 2007 OF MOTION NO.416 OF 2007 IN IN IN SUIT SUIT SUIT NO. 770 OF 2006 NO. 770 OF 2006 NO. 770 OF 2006 Padmini Hiralal Jain and another : Plaintiffs. versus Ashok Kumar Mishrilal Jain : Defendant And Mrs.Pepibai Mishrimal Jain and others : Applicants. 2 Mr.Shashi K.Jain for the Plaintiffs in support of Notice of Motion No.416 of 2007. Mr.Dinesh C. Shah for Applicants in support of Notice of Motion No.1697 of 2007. Mr.K.D.Jha for the Defendant. Mr.Sanjay Jain I/by Ashok Purohit for Parel Mahatma Co-operative Housing Society Limited. Mr.S.S.Toraskar, Representative of the Court Receiver is present. CORAM CORAM CORAM : A.A.SAYED, J : A.A.SAYED, J : A.A.SAYED, J DATED DATED DATED : 14th December, 2007. : 14th December, 2007. : 14th December, 2007. P.C. P.C. P.C. 1. The above Notice of Motion No.416 of 2007 is taken out by the plaintiffs inter alia for appointment of Court Receiver and for injunction restraining the defendant from disposing of and/or alienating and/or encumbering the suit premises viz. Shop No.F/S/M-3-2/19, Parel Mahatma Co-operative Housing society Limited, Jerbai Wadia Road, Bhoiwada, Parel, Mumbai - 400 012. It is also prayed in this Notice of Motion that the plaintiffs be appointed as agents of the Court Receiver and be put in possession of the 3 suit premises on such terms and conditions as this court may deem fit and proper. 2. The Notice of Motion No.1697 of 2007 is taken out by the applicants, who are the relatives of the defendant and claim to have a share in the suit premises. This Notice of Motion has been inter alia taken out by the applicants for setting aside and modifying order dated 20th March 2007 passed in Notice of Motion No.416 of 2007 and, for staying the effect and operation of the said order. It is also prayed in this notice of motion that the amounts so paid towards the royalty by the defendant pursuant to the said order dated 20th March 2007 be retained by the Court Receiver till the hearing and final disposal of the suit and/or in the alternative the Court Receiver be directed to pay the respective shares from the amounts deposited from time to time by the defendant to the applicants who claim to be the joint owners in the suit premises. 3. The suit has been filed by the plaintiffs inter alia for a declaration that the agreement dated 28th January 2005 (Exhibit A to the Plaint) 4 between the plaintiffs and the defendant is valid and subsisting and the defendant is bound to specifically perform his part of the said agreement. The plaintiffs have also prayed for a declaration that the plaintiffs are the owners of the suit premises viz. Shop No.F/S/M-3-2/19, situated at ground floor, Parel Mahatma Co-operative Housing society Limited, Jerbai Wadia Road, Bhoiwada, Parel, Mumbai - 400 012. The plaintiffs have further prayed for directions to the defendant to get the said agreement dated 28th January 2005 registered with the Sub-Registrar of Assurances at Mumbai by executing all the necessary documents. 4. The case of the plaintiffs is that by the said agreement of sale dated 28th January 2005, the defendant had agreed to transfer the suit premises to the plaintiffs for Rs.10 lakhs. It is averred in the plaint that the defendant on receipt of the said amount and on execution of the said agreement put the plaintiffs in exclusive possession of the suit premises. It is also stated that the defendant handed over to the plaintiffs the original share certificate. A power of attorney of the same date i.e. 28th 5 January 2005 was also executed by the defendant in favour of the plaintiffs authorising them to perform various acts deeds and things in respect of the suit premises. The defendant had also executed an affidavit confirming the said sale and relinquishing all his right title and interest in the suit premise in favour of the plaintiffs. The said affidavit is also dated 28th January 2005. 5. It is however the case of the plaintiffs that the defendant thereafter represented to them that since the defendant was doing business in the suit premises and he had to recover amounts from his customers in the market, he may be allowed to continue in possession of the suit premises for some time. It was mutually agreed that the possession of the suit premises be given to the defendant for a period of 11 months as their licensee on monthly compensation of Rs.5000/- and that after expiry of the licence period the defendant would hand over the possession of the suit premises to the plaintiffs. Accordingly an agreement of leave and licence dated 1st February 2005 (approximately 3 days after 28th January 2005 6 when the agreement of sale and other documents were executed) came to be entered into and the defendant was allowed to use and occupy the suit premises as licensee. The said document of leave and licence agreement was not registered and, according to the plaintiffs, the defendant, on one pretext or the other, failed to register the said document and to pay the deficit stamp duty. After expiry of leave and licence agreement period on 31st December 2005, the defendant however failed and neglected to hand over the possession of the suit premises to the plaintiffs and refused to sign necessary transfer form and also refused to perform his part of the said agreement of sale. The plaintiffs, therefore, by their advocate’s letter dated 27th February 2006 called upon the defendant to comply with his part of the said agreement of sale dated 28th January 2005 and also demanded possession of the suit premises from the defendant. 6. According to the plaintiffs, they are ready and willing to perform their part of the said agreement of sale and have already paid the entire consideration. However, the defendant is not ready and willing to perform his part of the 7 said agreement of sale. It is the case of the plaintiffs that though the said agreement of sale dated 28-01-05 is valid, subsisting and binding on the defendant and the leave and licence agreement dated 1st February 2005 had also come to an end, the defendant is not entitled to continue in use and occupation the suit premises in any manner whatsoever. 7. Hitherto the plaintiffs had taken out a notice of motion bearing Notice of Motion No.810 of 2000 which was disposed of by an order dated 18th December 2006 wherein this Court came to the conclusion that since the suit premises were valued incorrectly, no relief was granted in the said notice of motion. However, a liberty was granted to the plaintiffs to take out a fresh notice of motion for similar relief after valuing the suit premises correctly. A reference to this notice of motion made in the affidavit filed in the above Notice of Motion No.416 of 2007 is relevant for the purpose of deciding the above notices of motion, particularly about the inconsistent stand taken by the parties. 8. Pursuant to the liberty granted by the 8 order dated 18th December 2006, after paying enhanced court fees, the plaintiffs have taken out the above Notice of Motion No.416 of 2007. 9. The defendant has opposed this notice of motion and filed his reply. The case of the defendant is that the suit has been fraudulently filed by the plaintiffs by manipulating, fabricating and using colorable documents deliberately with ulterior motives and that the signatures of the defendant and his brothers on all the documents annexed to the plaint except Exhibit ‘B’ are forged. According to the defendant, the Plaintiff No.2 is a jeweller by profession and he has his two jewellery shops in the same vicinity and are well known to the defendant and that they are in the same trade and having business relations. The case of the defendant is that it is usual among the jewellers to borrow some money or gold if required, to comply with the demands of the customers and all such dealing usually are in cash and are in good faith. 10. According to the defendant, he carries on his joint family business as jewellers at the 9 suit premises. It is his case that in or about 1990-91 a loan of Rs.7,00,000/- was taken by the defendant at the interest rate of 18% per month from the plaintiffs and that he was regularly paying the interest to the plaintiffs till Diwali of 2003. However, thereafter due to some financial difficulties, there were some defaults in payment of interest to the plaintiffs. It is the case of the defendant that in or about 1st week of January 2005, amicable settlement took place between the parties and after deducting the outstanding amount of interest from Diwali 2003 onward additional sum of Rs.11,50,000/- was further paid by the plaintiffs in cash and on record a total of Rs.13,00,000/- was shown, as Rs.1,50,000/- was adjusted against the aforesaid outstanding amount of interest and, accordingly, total amount of Rs.20,00,000/- were lent by the plaintiff to the defendant and the rate of interest was fixed at 12 percent. Accordingly, in view of the aforesaid settlement, the defendant was paying a sum of Rs.20,000/- in cash towards the interest regularly and the same has been paid till December 2005. The defendant’s original share certificate in respect of the suit premises, was retained by the plaintiff as the 10 10 10 security. 11. The plaintiff, according to the defendant, in the month of January 2006, surprisingly demanded the entire loan amount of Rs.20,00,000/- at once failing which the plaintiff threatened to take forcible possession of the suit premises. In view of this, the defendant lodged police complaints against the plaintiffs. It is stated by the defendant that this dispute between the parties however was settled by intervention of the police authorities and the said settlement was recorded in writing on 12.2.2006 in Hindi, hand written by Suresh Jain i.e. defendant’s elder brother and the said settlement was duly signed at the R.A.K. Marg Police Station, Sewri, Mumbai. The copy of the said settlement along with necessary English translation is annexed to the affidavit in reply of the motion. It is further stated that the advocate’s Notice dated 27.2.2006 from the plaintiffs was received and replied to by the defendant’s advocate letter dated 3.3.2006. According to the defendant, it is in these circumstances and instead of filing money recovery proceedings, the plaintiffs have chosen 11 11 11 to file the above suit by manipulating, fabricating and forging the documents for the entire amount at one stretch from the defendant. It is further stated that the story put forth by the plaintiffs that they were in physical possession of the suit premises for a period of three days i.e. from 28.1.2005 to 1.2.2005 is false and cannot be believed. 12. The defendant has further pointed out that the plaintiff has filed a suit for eviction bearing Suit No.30/39 of 2006 against the defendant before the Small Causes Court at Bombay on 25.4.2006 and, the same is pending till date. According to the defendant he was always in physical possession of the suit premises and he has never handed over the physical possession of the suit premises to the plaintiffs till date in spite of the aforesaid settlement dated 12.2.2006 as later on the plaintiffs backed out from their commitments. Thus, even though under the settlement dated 12-02-2006, Room No.19, II floor, J.V.Road, Parel, Bhoiwada, Mumbai - 12 was to be handed over to the plaintiffs in lieu of the borrowed amount since the plaintiffs backed 12 12 12 out of the settlement, the possession of the said room was not handed over to them. According to the defendant, the suit is bad for non-joinder of necessary parties as the defendant is not absolute owner of the suit premises and, therefore, the suit is not maintainable. 13. In the rejoinder it is pointed by the plaintiffs that it is for the first time the defendant is making a false charge of forgery and fabrication of documents against the plaintiffs which is in direct contradiction to the defendant’s earlier Affidavit-in-Reply dated 14th June 2006 made on oath in the Notice of Motion No.810 of 2006 in the above suit. According to the plaintiff, in the said Affidavit-in-Reply the defendant has confirmed that Exhibit A to E to the plaint bear his signatures and that of his two brothers as witnesses and, therefore, as the defendant is making false statements on oath, the same cannot be believed. According to the plaintiffs, the said transaction of Rs.20 lakhs, which is referred to in the Affidavit-in-Reply is a different loan transaction which is not between Plaintiff No.1 and the defendant but that is between the plaintiffs and defendant’s brother 13 13 13 Suresh Kumar Jain and this would be clear from the document at Exhibit 1-A annexed to the Affidavit-in-Reply of the defendant which is in the hand writing of the said Suresh Kumar Jain. The plaintiffs have stated that the said document at Exhibit 1-A which is the alleged settlement Agreement was executed under coercion and use of force by Police officers of RAK Marg Police Station and the said document was executed as they were threatened of being put behind the bars. It is further stated that the premises mentioned in the said document at Exhibit 1-A i.e. Room No.19, 2nd floor, J.V.Road, Parel, Bhoiwada, Mumbai 400 012, is altogether different from the suit premises. Exhibit 1-A records that the above referred premises is standing in the name of Suresh Kumar’s brother’s wife i.e. Sushila Kantilal Jain. Thus the alleged settlement was executed under coercion and was no way concerned with the subject matter of the present suit. It is further pointed out that the defendant has clearly admitted that he had borrowed money of Rs.20 lakhs from Plaintiff No.1. It is further stated that the defendant however admits the receipt of Rs.10 lakhs at the time of execution of agreement dated 28th January 14 14 14 2005 (Exhibit-A to the plaint) and admits in his reply that he borrowed additional loan of Rs.20 lakhs from plaintiff No.1 and, that these two transactions are completely separate and independent from each other. 14. Affidavit in Sur Rejoinder has been filed by the defendant. The contrary stand in respect of the signatures of the documents has been sought to be explained by the defendant by stating that the ‘admissions’ should not be considered against the defendant as it appears to have been made by his previous Advocate under mis-understanding contrary to his instructions. Further, in para 10 of his sur-rejoinder the defendant has denied that the settlement deed dated 12.2.2006 refers to some different transaction. It is further pointed out that the plaintiffs have already filed another suit claiming recovery of Rs.10 lakhs against the defendant’s brother Suresh Kumar Jain and have obtained certain orders which has been challenged by Suresh Kumar Jain by filing appeal before this Court. 15. It may be mentioned that in the above 15 15 15 Notice of Motion No.416 of 2007, by an order dated 20th March 2007, this Court, after considering the prima facie case of the plaintiffs, appointed Court Receiver in respect of the suit premises and directed the Court Receiver to take symbolic possession of the suit property without disturbing the possession of the defendant and, further directed the Court Receiver to proceed with the determination of the terms and conditions on which the defendant would continue to occupy the premises as an agent of the Court Receiver including the question of royalty which was left to the Court Receiver to decide. 16. Later on, the applicants, who are the relatives of the plaintiffs, on or about April 2007 filed the above Notice of Motion No.1697 of 2007 praying for the reliefs as set out therein and to set aside and modify the order dated 20th March 2007. In the affidavit in support of this Notice of Motion No.1697 of 2007, it is alleged that the applicants are the co-owners of the suit premises and the suit premises is censused premises and was censused in the name of their deceased father, and the applicants and their 16 16 16 children have equal rights duly inherited from their deceased father Shri Mishrimal Seshmal Jain (alias Porwal) who expired in Rajasthan on 26.07.1990. According to the applicants, in or about 1991-92, the deceased Shri Mishrimal Seshmal Jain was the member of the said society viz. Parel Mahatma Co-operative Housing Society, Mumbai and the monthly maintenance bills were also issued in the name of said Mishrimal Seshmal Jain. The applicants claimed ignorance as to how monthly bills and other records of the society now appear in the name of the defendant. The applicants allege that the defendant, in collusion with the plaintiffs, has got the monthly bills and records of the said society in his name. According to the applicants, they are carrying on their joint family business of jewellers in the suit premises and the electric bills till date also stand in the name of their deceased father. It is stated by the applicants that the telephone connection in the suit premises is also in the name of Applicant No.4 Rameshkumar Mishrimal Jain and their business is being carried out in the name and style of M/s.Sharda Jewellers in the suit premises and, the shops and establishment licence in respect of 17 17 17 the said business has been renewed from time to time and the same is valid and subsisting till date. In para 11 of the affidavit, the applicants have stated that their deceased father had obtained Money Lending Licence in the name of M/s.Sharda Jewellers which was ultimately discontinued after the year 2002-03. The applicants have further stated in their affidavit that they came to know about certain loan transaction between the defendant and plaintiffs in February 2006 and then they intervened in the matter, negotiated and got the matter settled on 12.2.2006 and, the same was recorded in Hindi by Sureshkumar Jain and, they came to know about the suit transaction when the Court Receiver came to their residential premises to enquire about the defendant and that is how they came to know about the order dated 20th March 2003 of appointment of Court Receiver passed by this Court in respect of the suit premises. The applicants have stated that upon enquiry with the defendant, they came to know that the defendant had filed an appeal challenging the said order dated 20th March 2007 and the same has been withdrawn by the defendant. Thus, according to the applicants, the defendant is not a sole and absolute owner of the suit 18 18 18 premises and they have interest in the suit premises and, therefore, they have taken out present Notice of Motion No.1697 of 2007 for setting aside and modification of the order dated 20th March 2007 appointing Court Receiver in respect of the suit premises. 17. Affidavit in Reply dated 11th June 2007 has been filed by the plaintiffs to this Notice of Motion No.1697 of 2007 wherein it has been stated by the plaintiffs that the appeal filed by the defendant came up for admission before the Division Bench of this Court on 20th April 2007 and the Court was pleased to take a very serious note of the matter in view of the derogatory remarks made by the appellant/defendant in the grounds of appeal and, therefore, ultimately, the said appeal came to be withdrawn unconditionally by the defendant. It is stated that having failed to get the said order of appointment of Court Receiver set aside, the defendant has put the applicants, who are none other than the defendant’s mother and brothers and other relatives and, filing of this Notice of Motion 1697 of 2007 is nothing but an abuse of process of court and, there was complete collusion 19 19 19 between the defendant and the applicants. In para 23 of the affidavit in reply it is pointed out that the alleged writing of settlement dated 12.2.2006 specifically refers to three cheques which were issued by the applicants and the same were signed by applicant No.7 which is in respect different transaction and is independent transaction from the subject matter of the present suit which is in respect of the agreement of sale in respect of the suit premises. It is stated that the plaintiffs have filed criminal cases under sections 138 of the Negotiable Instruments Act in the Court of Metropolitan Magistrate, 7th Court, Dadar, Mumbai in respect of the said three cheques which came to be dishonoured. It is further stated that the Applicant Nos.4 and 5, who are the brothers of the defendant, are the witnesses to the agreement of sale dated 28th January 2005 (Exhibit-A to the Plaint) and other documents and as such they are aware of the sale transaction and they were also the witnesses to the Power of Attorney and the affidavit executed by the defendant and, therefore, it cannot be said that they were not aware of the transaction between the plaintiffs and the defendant and in fact they have endorsed 20 20 20 the said agreement by signing it as witnesses. It is further stated in Para 26 of the reply that the suit premises came to be transferred in favour of the defendant with the knowledge and concurrence of all parties and hence question of any interest or ownership right of the applicants does not arise and prayed for dismissal of Notice of Motion No.1697 of 2007. 18. Rejoinder dated 5th July 2007 thereof has been filed by the applicants denying that the suit premises were transferred during the life time of their deceased father Mishrimal Seshmal Jain. It is further stated in the said rejoinder that the cheques referred to, were given to the plaintiffs as and by way of security and the plaintiffs had now deliberately misused them by getting the same dishonoured and filing the proceedings under Section 138 of the Negotiable Instruments Act. 19. The above Notice of Motion No.416 of 2007 and Notice of Motion No.1697 of 2007 came up before this Court on 13th July 2007 when the order dated 20th March 2007 of appointment of Court Receiver was modified to the extent that 21 21 21 the decision of fixing of royalty by the Court Receiver was deferred until further orders in the said notices of motion. 20. The Notices of Motion were heard for some time on 24.08.2007 and were made part-heard. On 29.9.2007, when further arguments on the above notices of motion were to resume, learned counsel Mr.Sanjay Jain appeared on behalf of one Parel Mahatma Co-operative Housing society Limited, Jerbai Wadia Road, Bhoiwada, Parel, Mumbai - 400 012 and sought to intervene in the matter and sought time. However, since the Notices of Motion were partly heard and in absence of any application for intervention, I was not inclined to adjourn the motions and proceeded to hear the motions. 21. I have heard the Learned Counsel for the parties including Learned Counsel Mr.Sanjay Jain for the Society. 22. The Ld. Counsel for the