1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION REVIEW PETITION NO.28 OF 2008 IN COURT RECEIVER’S REPORT NO.210 OF 2008 IN SUIT NO.650 OF 2004 Devilal R. Chhajed …Petitioner Proprietor of Nakoda Trading Co. Vs. Smt. Sumati Wd/o. Raja Nadar & 3 Ors. …Respondents (Orig. Plaintiffs) And Solai Chandrashekar Nadar & Anr. …Respondents (Orig.Defdts.5 & 6) Mr.K.T.Kukreja with Devang H. Shah for obstructionist/Review Petitioner Mr.A.R.Pa ndey with Mr. Rahul Pandey i/b. Pandey & Pandey & Co., for Plaintiff Mr.G.R. Mishra for Defendants 5 & 6 Mr.R.Ashokan for Applicant in N.M.No.2836/2008 . CORAM: SMT. ROSHAN DALVI, J. DATED: 6 TH FEBRUARY 2009 P.C. 1. The order dated 4th August 2008 passed in the Court Receiver’s Report No.210/2008 is sought to be challenged in 2 this Review Petition. The Petitioner has been heard as an obstructionist/occupant of the Suit premises, which is Shop No.4 in New Ruby Monarch Arcade, 74- B, Vihar Road, Opp: Saki Naka Post Office, Mumbai- 400 072. 2. The Petitioner claims to have been put in possession of the Suit premises by Defendant No.2 in the Suit upon an agreement entered into by him with the Defendant No.2 cancelling the agreement of the Defendant No.2 with the original owner/builder for the Suit premises. Side by side the Defendant No.2 entered into certain agreement with the Plaintiff for appointment of Court Receiver in respect of the Suit premises. 3. The Defendant No.2 in the Suit is Respondent No.6 in this Review Petition (he shall be referred to as the Defendant No.2). 4. The Plaintiff is the sister- in-law of Defendant No.2. The Plaintiff is the wife of deceased brother of Defendant No.2. The wife as well as the children of the said deceased brother sued the other two brothers including the Defendant No.2 for partition of the Suit premises. They claim 1/3 rd share in the Suit premises. She took out a Notice of Motion in the Suit for appointment of the Court Receiver and for certain 3 injunctions. The parties filed certain Consent Terms in the Suit, under which by consent of the parties the Court Receiver came to be appointed. The Court Receiver took symbolic possession of the Suit premises pending the Suit. 5. When the Suit was pending and the Court Receiver was appointed, the Defendant No.2 entered into certain negotiations with the Petitioner for sale of the Suit premises. The Petitioner was unaware of the appointment of the Court Receiver. At the same time the Defendant No.2 had entered into settlement talks with the Plaintiffs. The Petitioner wanted to purchase the Suit premises through the Owner/Builder. The Owner/Builder informed the Petitioner that certain settlement talks were going on with Defendant No.2 and if they fructified, could be executed and possession of the Suit premises could be taken. 6. Whilst the talks of settlement between the family members was in progress, and whilst the Defendant No.2 sought to dispose off the Suit premises, he was committed to jail. It appears that the Defendant No.2 had incurred a number of debts. Several creditors were to be paid. Criminal prosecutions were filed. A prosecution under Section 138 of the Negotiable Instrument Act was inter alia filed. The Defendant No.2 was convicted. He was committed to jail 4 between 2 nd July 2005 and 12 th September 2005. 7. During this period he appears to have been desperately wanting to sell out the Suit premises. It was at this time when the Petitioner wanted to purchase the Suit premises. 8. Certain documents appear to have been executed by the Defendant No.2 in about August 2005. The Defendant No.2 wanted to surrender the shop to the Owner/Builder. He needed to pay off his creditors by the sale of the Suit shop. 9. It is under these circumstances that the execution of the documents relied upon by the Petitioner, which have been produced for the first time in this Review Petition and which were not shown to the Court when the order dated 4th August 2008 came to be passed, require to be considered. The Defendant No.2 has entered into a Deed of Cancellation cancelling the Agreement in respect of the Suit premises purchased by him as the unit purchaser from the Owner/Builder. The Deed of Cancellation is on stamp paper purchased on 19 th August 2005 in the name of Defendant No.2. The Deed of Cancellation is executed on 24 th December 2005. It shows Defendant No.2 as the unit purchaser having cancelled the Agreement dated 1st May 1997 executed by the Owner/Builder in his favour for the 5 Suit premises. In that Agreement it is recited that the Defendant No.2, a unit purchaser had failed and defaulted to perform the terms and conditions of the Agreement for Sale dated 1 st May 1997 and hence, that Agreement stood cancelled. Under that Agreement, therefore, the Defendant No.2 handed over possession of Suit premises to the owner. The owner agreed to pay the Defendant No.2 Rs.10,00,000 /- as full and final compensation towards the cancellation of the Agreement dated 1st May 1997. The Defendant No.2 declared that he had no right, title and interest in the Suit premises. He surrendered the Suit premises to the Owner/Builder in consideration for the Owner/Builder pay the said compensation to one Kantilal Fauransingh Thakur. As per the agreement between the parties the Owner paid Rs.10,00,000 /- by Cheque No.611282 dated 20 th March 2006 drawn on Shyamrao Vithal Bank Ltd. Saki naka Branch, in favour of the said Thakur. Hence, the agreement between the parties was that to discharge the debt of that Thakur, Defendant No.2 would hand over possession of the Suit premises to the Owner/Builder for a consideration of Rs.10,00,000 /- and the owner would pay the said consideration to the Creditor, Thakur directly. Accordingly the Defendant No.2 discharged his debts. 10. Consequent upon such a cancellation the Defendant 6 No.2 handed over the original Agreement dated 1st May 1997 to the owner. 11. The Defendant No.2 also executed a letter in favour of the owner stating that he had agreed for cancellation of the Agreement for sale dated 1st May 1997 under the said Deed of Cancellation. Under that Deed of Cancellation the owner was supposed to pay Rs.10,00,000 /- to him towards full and final settlement. He requested the owner to issue the Cheque for Rs.10,00,000 /- in favour of Thakur as Defendant No.2 had to pay the said sum to Thakur. 12. It may be noted that all this transpired while the Defendant No.2 was committed to jail. One must, therefore, appreciate the anxiety of the Defendant No.2 to enter into such an agreement to liquidate his assets to pay off his creditors to be able to be released on bail. Though, therefore, such settlement talks were in progress, actual execution could not be effected. Hence, the Deed of Cancellation came to be prepared on the stamp paper purchased in August 2005 in the name of the Defendant No.2. The letter of Defendant No.2 in consonance with the Deed of Cancellation also came to be prepared. The Defendant No.2 was released on bail on 12 th September 2005. That was the time when the Petitioner wanted to buy 7 the Suit premises and when he was informed by the landlord that, if there was some settlement by Defendant No.2, the premises may be available to be given to him. 13. It appears that even after his release from jail, the Defendant No.2 did not immediately execute the Deed of Cancellation, which was prepared containing the aforesaid unique terms. It appears that he must have been approached by his Creditors including the said Thakur, who may be demanding the amounts from him. 14. The Defendant No.2 has shown a complaint being filed by him with the Assistant Commissioner of Police, Sakinaka Division on 4th December 2005. This relates to the demand of money from him and certain threats. The complaint is against five individuals including Thakur. The other four individuals are not known. It stands to reason that they were also his Creditors. The demand alleged to be made is to the extent of Rs.35,00,000/- . The fact that the Defendant No.2 was convicted and committed to jail shows his indebtedness at least in that case, which never came to be settled, but which came to be proved against him. 15. Under such circumstances the Defendant No.2 appears to have ultimately executed the Deed of Cancellation as well 8 as the aforesaid letter on 24 th December 2005. The Deed of Cancellation on the stamp paper of 19 th August 2005 is executed on 24 th December 2005. The aforesaid letter, which is also executed on 24 th December 2005 shows that it was initially typewritten in August 2005. 16. The Advocate for Defendant No.2 sought to make much of the fact that these documents are forged, because on the date of the purchase of the stamp paper as well as the date of typewriting the letter Defendant No.2 was in jail. The conclusion sought to be made by the Advocate for the Defendant No.2 appears myopic. Indeed the documents were initially executed as drafts in August 2005, they would not have been executed in such a unique fashion as to cancel the agreement of Defendant No.2, hand over premises to the owner for consideration of Rs.10,00,000 /- and for the owner to pay Rs.10,00,000 /- to one of the Creditors who was one of the persons against whom Defendant No.2 lodged the aforesaid complaint dated 4th December 2005. 17. In fact a reading of this entire documentary evidence shows that well before the complaint was filed, the Suit premises was sought to be surrendered for consideration payable to a Creditor. 9 18. It was at that time that the Petitioner wanted to purchase the premises, and the owner was waiting for the settlement to make available one of the premises to the Petitioner. 19. It is the case of the Petitioner that the owner had told the Petitioner to pay stamp duty and deposit Rs.2,00,000/- as advance in about September 2005. He was informed that the balance amount would have to be paid by him at the time of entering into the agreement. He was also assured that if the deal would not go through, he would be refunded the amount. The Petitioner complied. Though the Petitioner gave a cheque of Rs.2,00,000/- to the owner, the owner did not encash the cheque then. 20. On 21 st December 2005 Defendant No.2 entered into Consent Terms with the Plaintiff, his sister- in-law in the Suit itself. It was agreed and declared between the parties that the Defendant No.2 and his brother would bear the expenses of the marriage of the Plaintiff’s children (who are party Plaintiffs). Under that Consent Terms the Defendant No.2 paid the Plaintiff Rs.5,00,000/- in full and final settlement of the Plaintiff’s claim. The Plaintiff agreed not to claim any right, title and interest in the Suit premises. The Suit stood settled by the aforesaid Consent Terms on 21 st December 10 2005. The Court Receiver stood discharged. Then Defendant No.2 signed the Deed of Cancellation and the aforesaid letter. 21. Defendant No.2 was admitted to hospital on 25 th February 2006. The Court Receiver, who stood discharged upon the settlement of the Suit was to hand over possession to the Defendants in the Suit. He handed over possession to Defendant No.1, the brother of Defendant No.2 since the Defendant No.2 was in the hospital. 22. It appears that the Defendant No.2 really required to discharge his debt to Thakur. Whilst he was in the hospital he executed a similar letter/agreement restating about the Deed of Settlement, the consideration of Rs.10,00,000 /- to be received thereunder and that amount to be paid to Thakur in discharge of his liability. Thakur confirmed the said letter/agreement. It has been notarised. The stamp of the Notary shows the serial number of the entry to be 807 dated 11 th March 2006. It is signed and thumb impressed by the Defendant No.2. 23. It may be mentioned that the notarisation of all these documents appears genuine. It is registered by the Notary in green ink. A colour Xerox copy of the notarial register has 11 been produced, which shows inter alia the said entry along with two other entries of the same date and under the same notarial stamp signed by the Defendant No.2 as well as Thakur and also thumb impressed by the Defendant No.2. 24. It may be mentioned that together with this agreement Defendant No.2 executed another agreement which does not relate to the Suit premises being Shop No.4, but another premises of the Defendant No.2 also in discharge of his liability to Thakur. In another proceeding relating to that premises the Court has been informed that the Thakur has taken over all the debts and liabilities of the Defendant No.2 and has discharged those debts and liabilities. The extent of the discharge has come to about Rs.2.53 Crores including income tax liability, which caused that premises to be attached by the Income Tax Authorities. 25. The owner entered into an Agreement of Sale with the Petitioner. That agreement has been registered on 13 th March 2006. On 16 th March 2006 the Petitioner paid Rs.10,00,000 /- by two cheques each of Rs.5,00,000 /- to the owner. The owner encashed all the three cheques including the earlier cheque of the advance of Rs.2,00,000/- . The Petitioner has substantiated this contention by the production of copy of the Bank statement of the owner. The 12 statement shows that three cheques credited on 16th and 17 th March to the account of the owner. 26. However, possession was not handed over to the Petitioner, because the owner had to make payment to Thakur and Defendant No.2 had to surrender possession of the Suit premises to the owner. 27. The Owner has indeed made the said payment. The statement in paragraph 8 of the Review Petition with regard to the said payment being made is shown by the Petitioner by producing the xerox copy of the Bank Statement of the owner upon the query of the Court. The copy of the Bank statement of Shyamrao Vithal Co-operative Bank Ltd., shows an entry of 22 nd March 2000 in favour of Kantilal Thakur by cheque No.611281 for Rs.10,00,000/- . Hence, the cheque dated 20 th March 2006 of Rs.10,00,000 /- bearing the aforesaid number came to be credited in the account of Kantilal Thakur on 22 nd March 2008. 28. The Defendant No.2 was discharged from the hospital on 24 th March 2006. 29. It was only thereafter, that the Defendant No.2 surrendered possession to the owner and handed over the 13 original agreement to the owner. The Petitioner has produced a letter dated 25 th March 2006 of Defendant No.2 to the owner stating that he was pleased to handover vacant possession of the Suit plot and that he would not have any right, title and interest therein. 30. After the Defendant No.2 came in possession of the Suit premises he applied for electricity connection in his name. He had to discharge the earlier liability of Maharashtra State Electricity Board (in short MSEB). He discharged the liability of Rs.55,450/- on 6th April 2006. He made payment of further Rs.2205/- to the MSEB on 12 th April 2006. He claims to be carrying on business in the Suit premises since 25 th March 2006. 31. On 24 th March 2008, precisely 2 years after this entire transaction took place as reflected in the aforesaid documents, the Plaintiff and Defendants colluded and took a volte- face. The parties again applied for appointment of the Court Receiver as per earlier terms by consent. This application was made in a Notice of Motion taken out in the Suit which was already disposed off under the aforesaid Consent Terms dated 21 st December 2005. By an ad- interim order of Justice Vazifdar, the Court Receiver came to be appointed in respect of the Suit premises and the earlier 14 arrangement of appointing Defendant No.2 as the Agent was to continue. 32. Since the Court Receiver came to be reappointed he again had to take over possession of the Suit premises. The Court Receiver found the nephew of the Petitioner one Kamlesh Jain in possession of the Suit premises. Hence, the Court Receiver made Court Receiver’s Report No.210/2008 to the Court. The Petitioner obstructed as the occupant /party in possession. 33. It was observed that the Defendant No.2 came to be in possession in 1997. He continued in possession pending the Suit until the Receiver came to be appointed. He would continue in his possession in his own right after the Receiver came to be discharged. The Petitioner claim to be put in possession of the Suit premises by the owner/builder. It was observed that once the Defendant No.2 came to be in possession in 1997 upon purchase of the Suit premises from the owner/builder, the owner could never handover possession to the Petitioner (who was the obstructionist/occupant). Hence, the agreement entered into by the owner 5 days after the discharge of the Court Receiver was found suspicious. The fact that the Defendant No.2 was hospitalized from 25 th February 2006 to 24 th March 15 2007 was considered. The case that the Defendant No.2 had kept the premises locked during that time was accepted. The registration of the Agreement of the Petitioner with the owner on 13 th March 2006 was not accepted. The claim of the Petitioner that he was a bonafide purchaser of the Suit premises without notice of the title of Defendant No.1, the brother of Defendant No.2, who was merely handed over possession of the Suit premises by the Court Receiver in the absence of Defendant No.2, who was hospitalized, was rejected. It was observed that the owner had no title to the Suit premises once it was sold and hence cannot resale the Suit premises to the Petitioner. However, the “strange circumstances ” of the parties to the Suit taking out Notice of Motion for reappointment of the Court Receiver in the Suit which was already disposed off was noted. Further in the peculiar facts of this case since the Petitioner had approached the owner and the owner had directed him to pay stamp duty and advance amount, which the Petitioner had paid, after which his agreement was executed and much later registered was seen. All this was shown to the Court without the basic document of cancellation of the initial agreement by the Defendant No.2. 34. The Defendant No.2 had suppressed the Deed of Cancellation dated 24 th December 2005. He also suppressed 16 the letter of that date written by him to the owner. He further suppressed the notarised agreement/letter executed by him whilst he was in the hospital. He also suppressed the consideration received under said agreement by the owner paying Thakur Rs.10,00,000 /- . 35. The Petitioner did not show the Court his payment of consideration of Rs.12,00,000 /- - Rs.2,00,000 /- for advance and Rs.10,00,000 /- upon the registration of the Agreement. In the absence of these documents which were known to Defendant No.2, the case of the Petitioner as the obstructionist/occupant in his capacity as the bonafide purchaser of the Suit premises for value without notice of the claim of the Plaintiff in this Suit could be appreciated by the Court. The case of the Petitioner falls in place upon seeing the copy of the bank account statement of the owner showing the credits of the 3 cheques for Rs.12,00,000 /- and the debit of the cheque for Rs.10,00,000 /- . 36. It is now seen that the Defendant No.2 was really in tight circumstances. He had already settled with the Plaintiff for Rs.5,00,000 /- . The Suit was disposed off. Creditors were knocking at his door. He had to pay off Thakur to whom he owed moneys. He also owed moneys to other parties. He was convicted in a criminal case. He was committed to prison. 17 He had to be released on bail. He sought to enter into certain agreements for sale of his premises during the period he was in jail. One of that premises is the Suit premises. (The other premises was to be sold to Thakur, who is stated to have discharged his various debts). Whilst he was in jail these documents were got prepared. They could not be executed during that time. There was a stalemate when the Petitioner wanted to purchase the Suit premises. For discharge of his liability Defendant No.2 had to surrender possession of the Suit premises. He entered into a kind of tripartite agreement under which he would surrender the Suit premises to the owner/builder. The owner would agree to hand over possession to the Petitioner, the Petitioner would make payment of consideration to the owner. The owner would pay Thakur and the owner would hand over possession of the Suit premises to the Petitioner. Unless all the documents relating to this entire transaction are produced before the Court, the unique circumstances could not be shown to the Court. Once that is seen, the fact that the Defendant No.2 was in jail in fact lends credence to the execution of the documents of the kind that are produced by the Petitioner as having been executed by the Defendant No.2. Similarly the fact that the Defendant No.2 was hospitalized shows how a similar agreement containing the same requirements as of the Deed of Cancellation came to be 18 notarised along with the left hand thumb impression of the Defendant No.2. The fact that the original agreement itself is produced by the purchaser as a further circumstantial evidence which lends credence to his case. If the Defendant No.2 had continued in possession as contended by him and if the Petitioner was not a bonafide occupant of the Suit premises, he would not have had the original Agreement for Sale dated 1 st May 1997 showing the purchase of Suit premises by the Defendant No.2. The production by the Petitioner of the original receipts of MSEB soon after the purchase of the Suit premises for payment of the arrears of electricity as also for deposit or transfer to his name are further circumstantial evidence to prove his purchase and the subsequent possession. Similarly the complaint made by the Defendant No.2 to the Assistant Commissioner of Police sought to be relied upon by him in fact shows the number of Creditors who were demanding vast amounts from the Petitioner, a few days after which the Petitioner executed the Deed of Cancellation. 37. Upon seeing the documents hitherto suppressed the case of the Petitioner becomes clear. It is unfortunate that at the time the Court Receiver’s report came to be considered the Petitioner’s case as the bonafide purchaser of the Suit premises for consideration could be fully appreciated. The 19 Petitioner had to get produced the documents not executed by him to prove his case, since this was a transaction of a unique nature as aforesaid. 38. I am satisfied that the order dated 4th August 2008 deserves to be set aside on review. 39. Hence the following order: 1. Review Petition is allowed. 2. The Petitioner is allowed to continue in possession of the Suit premises claimed by the Petitioner upon seeing his title thereto. 3. The Court Receiver shall not implement the order dated 24 th March 2008. 4. The Court Receiver stands discharged. 5. The Suit has already been disposed off. (SMT. ROSHAN DALVI, J.)