Partly allowed

Zulkrnain M. Kagalwalla v. Mumtaz Hussain M. Kagalwala and 2 Ors.

Bombay HC10 Apr 2013NMS/2607/2012

Case brief

AI extract

What is this about?

In a suit for partition, the Bombay High Court utilized Order 12 Rule 6(1) CPC to pass protective directions and preliminary decrees. The Court ruled that nominee status without a will does not confer exclusive ownership, denied claims over certain properties lacking evidence, and directed valuation and payment of shares, subject to a stay on the order.

What did the court decide?

Directions to obtain property valuation, pay shares to plaintiff and defendant 3, transfer titles, represent heirs in pending appeals, and disclose remaining estate; stay on order except injunction.

Zulkrnain M. Kagalwalla Vs Mumtaz Hussain M… — Succession and Inheritance | Bombay HC (2013)

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NMS.2607/12-S.2561/12

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mnm

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CIVIL APPELLATE JURISDICTION

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NOTICE OF MOTION NO. 2607 OF 2012 IN SUIT NO. 2561 OF 2012

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Zulkarnain Mohammedhussain Kagalwalla

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...Applicant (Orig. Plaintiff)

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Vs.

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Mumtaz Hussain Mohammedhussain Kagalwala & Ors. ...Defendants

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Mr. Viren Asar a/w. Mr. Mohammed Hyder Sayed i/b. Wadia Ghandi & Co., for Plaintiff /Applicant Ms. Mamta Sadh i/b. Nandalal Kothari for Defendant Nos. 1 & 2 Mr. Sushant Desai i/b. Mr. M.T. Miskita for Defendant No.3

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CORAM : MRS. ROSHAN DALVI, J. DATED : 10^TH APRIL, 2013

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JUDGMENT :

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This is the usual suit between the admitted siblings where one sibling, despite admitting the right to the share of the other siblings after the death of his parent, keeps appropriated to himself the estate of the deceased constraining the other siblings to sue for their share.

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All the parties in this suit are the admitted heirs of their deceased father, one M.A. Kagalwala (the deceased). All of them

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accept the relationship and most of the estate of the deceased. They also accept that they are governed by the Shariat Law. The plaintiff, defendant No.1 and defendant No.2 who are the sons of the deceased have an equal share which is double that of the daughter of the deceased who is defendant No.3, their sister. Hence the plaintiff, defendant No.1 and defendant No.2 have 2/7^th share in the estate of the deceased. The defendant No.3 has 1/7^th share in the estate of the deceased.

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These shares of the parties and the relationship between the parties is admitted in paragraphs 4,5,7 & 21 of the affidavit in reply of defendant Nos.1 & 2. The properties which are shown to be the estate of the deceased are largely admitted. What is claimed to be denied would have to be seen to consider the defence, if any, to this administration suit for dividing and partitioning the properties of the deceased amongst his children who are his heirs and admittedly entitled to their respective specified shares therein.

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It may at once be mentioned that upon such admission the Court is empowered to pass a judgment on admission of the admitted shares of the parties in the admitted estate of the deceased under the provision of Order 12 Rule 6(1) of the CPC which runs thus:

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“6 . Judgment on admissions. –

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(1) Where admissions of fact have been made either in the pleading or otherwise, whether orally or in writing, the Court

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may at any stage of the suit, either on the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admissions”.

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It is contended on behalf of the defendant Nos. 1 & 2 that this is the hearing of the notice of motion and that the judgment may be passed later upon an application being made in that behalf. That contention is contrary to the above provision of which Counsel on behalf of defendant Nos. 1 & 2 fairly conceded upon reading the provision.

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Upon seeing that the relationship between the parties is admitted as also the applicable law and the extent of the shares of the parties it falls upon the Court to perform its duty to ascertain from defendant No.2, who is present in Court, whether he admitted or denied the plaintiff's case in respect of each of the properties forming a part of the estate of the deceased and to record those statements as per the mandate contained in Order 10 Rule 1 of the CPC, which runs thus:

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7. ORDER X Examination of Parties by the Court

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“1. Ascertainment whether allegations in pleadings are admitted or denied. – At the first hearing of the suit the Court shall ascertain from each party or his pleader whether he admits or denies such allegations of fact as are made in the plaint or written statement (if any) of the opposite party, and

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as are not expressly or by necessary implication admitted or denied by the party against whom they are made. The Court shall record such admissions and denials”.

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The Court would do well to heed the mandate of the Supreme Court oft repeated, but detailed in the case of Maria Margarida Sequeria Fernandes & Ors. Vs. Erasmo Jack de Sequeria (Dead) through L.Rs. AIR 2012 SC 1727 for what role the Court must play. Though the case of Maria(supra) was of the Court considering the possession of the parties in a property, the principles of the Court activism and duty would be the guiding factor and even more so required in a case such as this.

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The principles run thus:

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“39. …. A judge in the Indian System has to be regarded as failing to exercise its jurisdiction and thereby discharging its judicial duty, if in the guise of remaining neutral, he opts to remain passive to the proceedings before him. He has to always keep in mind that “every trial is a voyage of discovery in which truth is the quest”. In order to bring on record the relevant fact, he has to play an active role; no doubt within the bounds of the statutorily defined procedural law.”

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“41. World over, modern procedural Codes are increasingly relying on full disclosure by the parties. Managerial powers of the Judge are being deployed to ensure that the scope of the factual controversy is minimized”.

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After setting out the details of the required pleadings for proof of possession, which was the subject matter of that litigation, the Court also laid emphasis upon the documentary proof in

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support of the pleadings, when it should be produced, the examination by the Court, passing appropriate orders including the decree on admission thus:

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“71. Apart from these pleadings, the Court must insist on documentary proof in support of the pleadings. All those documents would be relevant which come into existence after the transfer of title or possession or the encumbrance as is claimed while dealing with the civil suits at the threshold, the Court must carefully and critically examine pleadings and documents.

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72. The Court will examine the pleadings for specificity as also the supporting material for sufficiency and then pass appropriate orders.

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74. If the pleadings do not give sufficient details, they will not raise an issue and the Court can reject the claim or pass a decree on admission”.

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Following that mandate, the suit properties set out in the list Exhibit-B to the plaint are considered as follows:

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1. Flat No. 243 Jupiter, Mumbai : The flat is stated to be 1342 sq. ft in area upon the instructions of defendant No.2 who is present in Court. The flat admittedly belonged to the deceased.

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It is the plaintiff’s case that defendant Nos. 1 & 2 are in exclusive possession of the flat, though the flat would belong to all the parties as per their share. It is the only defence of the defendant Nos. 1 and 2 that they are in exclusive possession of the

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suit flat. They have been nominated in the nomination made by the deceased. There is no will left by the deceased bequeathing the said flat to defendant Nos. 1 and 2. The flat is transferred to their names upon the nomination. They claim ownership rights. The nomination is accepted by the plaintiff. The nomination does not grant ownership. Nomination makes the nominees the trustees for the estate. The deceased not having left any will, the estate would have to be distributed amongst all the parties in the suit. The suit flat No.243 would have to be valued. 2/7^th of the valuation would have to be paid to the plaintiff and 1/7^th to defendant No.3.

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It may, at once, be stated that the sooner defendant Nos. 1 & 2 value and pay off the share of the plaintiff and of defendant No.3, the better as the real estate prices only keep on rising and defendant No.1 & 2 alone enjoy the said flat.

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2. Godown, Clive Road :

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Defendant No.2 who is present in Court upon the Court’s query states that the godown is 18000 sq. ft in area. It is shown to fall on 2 streets and is upon BPT land at Wadibunder Road, Mumbai. In paragraph 25 of the affidavit in reply defendant Nos. 1 and 2 claim that the godown does not belong exclusively to the deceased. The deceased had a unspecified share in the godown. How much is the share is not stated. With whom the deceased had a share is also not stated. The godown is stated to be tenanted to one Kanji Jadhavji & Company for the last more than 50 years.

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Defendant Nos. 1 and 2 claim that no income was received by the deceased, but have not stated what rents are payable to the deceased.

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3. Garage at Dhobitalao :

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In para 26 of the affidavit in reply of defendant Nos. 1 and 2 the garage is shown to be tenanted to the grandfather of the parties. The rent receipts are stated to be issued in the name of the grandfather. It is stated before the Court that that was in the name of the firm of Abdullabhai Fidaali & Company. It is, therefore, wrongfully stated in the said para that it was purchased by the deceased and defendant No.2 with the right to the survivor as the exclusive tenant. No such purchase is shown. No such special right of any surviving tenant is also shown. Defendant Nos. 1 and 2 claim to be paying the rent, but have not produced the rent receipts admittedly issued in the name of their grandfather. The claim of defendant Nos. 1 & 2 that the garage does not form part of the estate of the deceased is erroneous. Even if the garage was tenanted to the grandfather or his firm upon the death of their grandfather, it devolved upon their father. The defence in paragraph 26 is contradictory.

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The plaintiff’s case that defendant No.2 has been exclusively utilizing the estate of the deceased to the exclusion of the plaintiff and defendant No.3 is in fact made out by the defence of defendant No.2 that he alone is in occupation of the garage without showing

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the purchase in auction or the special right of survivorship in any manner. Upon the Court’s query the garage is stated to be locked.

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4. Proprietary business of Maksons Surgical :

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The business is admitted to be of the father as the sole proprietor. It would come to an end upon his death. Defendant No.2 is stated to have started a fresh business in the name of the said firm after the death of his father. That is his separate business.

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The parties would only be entitled to their share in the credit balance in the bank account of the deceased as the sole proprietor. That is stated to be in Standard Chartered Bank (Refer item No.14 below).

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5 & 6. Agricultural land and factory in Madhya Pradesh :

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Defendant Nos. 1 and 2 contend in paragraph 12 of the affidavit in reply that these lands are transferred to all the heirs. That statement is sought to be orally corrected before the Court. It is stated that the lands are not transferred to all the heirs and an appeal is pending. Defendant No.2, who is present in Court, himself states to Court that the land belonged to the joint family of the father. The appeal has been dismissed. The land would have to be divided amongst the co-owners. Once the father’s share is so divided then it would be transferred to all his heirs who are the parties to the suit. There can be no further dispute in respect of this land.

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7. Land in Khamgaon :

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This land also belongs to the joint family of the father. The father would have a share in the land. Under certain execution proceedings in an arbitration reference consent terms are stated to be filed between the father and his brother and other family members. Though the consent terms are not referred to or annexed to affidavit in reply, the consent terms and the orders passed in terms thereof have been produced before the Court by defendant No.2. Defendant No.2, who is present in Court, states that pursuant to this order the parties hereto who are declared to be the heirs of the deceased father would be entitled to have the transfer in their names, subject to the appeals already filed.

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8 & 9. Room Nos.8 &14 in Building Abdulla Mansion/Mulchand Mansion:

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Abdulla Mansion and Mulchand Mansion are stated to be the same building. Defendant No.2 who is present in Court states that the building belonged to the joint family of the father with his brothers. Room No.8 & 14 are two of the tenements in that building.

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Hence the father would have a share in the building. That share is a part of the arbitration dispute from which an appeal is pending. Court Receiver is appointed in the appeal. Defendant No.2 has produced the list of tenants of Abdulla Mansion No.1

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which is given to the plaintiff's Advocate.

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10. Property at Sholapur street :

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This is the property tenanted from the Mumbai Port Trust by the grandmother of the parties.

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In paragraph 16 of the affidavit in reply defendant No.2 claims exclusive rights of himself as survivor upon 50% of the right to use the godown being purchased by his father and himself. No purchase is shown. No exclusive rights to tenancy by any survivorship can be claimed under any law. This case of defendant No.2 that he is alone entitled to the premises is seen to be incorrect.

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The deceased would be entitled to a portion of the property along with his brothers upon the death of his mother. The father’s name had to be substituted as one of the tenants with the Mumbai Port Trust.

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Defendant No.2 has produced the power of attorney executed by the various brothers of the father in favour of the father for that purpose.

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The names of all the heirs would required to be substituted in the tenancy. The power of attorney is in the following terms:

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“2. To submit an application to the Bombay Port Trust for substituting the name of Mohammedhusain and/or his legal heirs as the person in place and instead of the name of Fatemabai and Abdulabhai Fidaali and 10 others in respect of the said portion of the Laal Godown denoted in the red colour boundary line on the plan annexed hereto.” (No plan is annexed to the power of attorney).

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Defendant No.2, who is present in Court, concedes that an application would be made in respect of the share which came to the father which is the red colour portion, to be shown in the name of all the heirs of his father. Defendant No.2 states that the application shall have to be submitted to the Mumbai Port Trust by all the parties to the suit and the other brothers and sisters and further parties who are the heirs of the original tenant, the grandmother of the parties. The application for transfer of the tenancy in the names of all the heirs along with all other relatives as tenants shall be made. Consequently there is no further dispute with regard to that property.

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11. Equity shares in Afsons Pvt. Ltd:

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The deceased father of the parties is admitted to have 2410 shares. It is admitted that the shares belong to the estate of the deceased. The private limited company is stated to be a deemed public company closely held by the family. Defendant No.2 states that the uncles of the parties have taken over the said company. The parties in this suit agree to obtain their share in the shares of their father.

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13. Demat Account No. IN 300 476 100 70830:

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All the parties do not know who is the nominee in the said Demat Account. The estate would vest in the name as per the Depositories Act, 1996 and Depositories Rules.

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13. Account of the deceased in Standard Chartered Bank:

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This account was held as the sole proprietor of his business. The defendant No.2 has stated in para 18 of his affidavit in reply that the bank has not allowed the heirs to operate his account.

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A copy of the account is produced by the plaintiff. The account shows a withdrawal of Rs.6.05 lakhs by inward clearing to another account of the deceased 4 days after the death of the deceased on 24^th November, 2010. That is credited to the joint account of the deceased with defendant No.2. The entry dated 23^rd November, 2010 shows deposit in the joint account of the deceased with defendant No.2. That account has been maintained and used by defendant No.2. Upon the deposit of Rs.6.05 lakhs the balance in that account has come to be Rs.7.63 lakhs.

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It is stated by defendant No.2 to Court that a cheque of Rs.4 lakhs has been drawn in favour of one Vissco Rehabilitation Aids Pvt. Ltd. on 11^th December, 2010 for the goods purchased by the father during his life time whilst he carried on business of M/s. Maksons Surgical. The affidavit in reply does not show the

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payment made to Vissco Rehabilitation Aids Pvt. Ltd. However the account of HDFC bank shows the withdrawal amount. The debit has thus been explained by defendant No.2. It would have to be substantiated by documentary evidence to the Court. At least the balance in the personal account of the deceased, less Rs.4 lakhs admittedly forms a part of the estate of the deceased.

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Bank Account of the proprietary firm of the deceased M/s Maksons Surgicals :

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The account of the firm of the deceased shows a balance amount of Rs.2.76 lakhs to the credit of the account on the date of the death of the deceased. Rs.2.70 lakhs are withdrawn 2 days thereafter on 24^th November, 2010. The entry shows the payment made to Vissco Rehabilitation Aids Pvt. Ltd. This aspect is not mentioned in the affidavit of respondent No.2. However the bank account produced by defendant No.2 shows the payment made to the creditor of the deceased as a part of his business and is duly accounted. It would have to be substantiated by documentary evidence. At least the balance in the firm's account admittedly forms a part of the estate of the deceased.

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Item Nos. 12 & 14 to 24:

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These properties are stated to be a part of the arbitration proceedings between the deceased and his siblings during his life time. It is accepted by all parties that there is an appeal filed from the arbitration award dated 5^th April, 2002. The Court Receiver

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had been appointed in the initial suit which was filed before the matter was referred to the arbitration. The Court Receiver continues in possession. The proceedings in the appeal court would enure for the benefit of all the heirs of the deceased who are parties to the suit. The parties shall take steps in the proceedings as advised.

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(a). Item Nos. 1, 4, 11 & 13 are therefore admitted to be the estate of the deceased.

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(b) Part of item Nos. 5, 6, 7, 8, 9 and 10 being the share of the deceased in these properties is also admitted to be the estate of the deceased.

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(c ) The right claimed by the deceased in the arbitration proceedings from which the appeal is pending is also admitted to be forming the estate of the deceased.

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Once the admissions are seen and no other defence is shown, in respect of a part of the suit claim as above, the parties are seen to be not at issue with regard to those aspects. This calls in the provision of Order 15 Rule 1 of the CPC which runs thus:

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“Order 15 Rule 1 : Parties not at issue –

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Where at the first hearing of a suit it appears that the parties are not at issue on any question of law or of fact, the Court may at once pronounce judgment” .

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Such of the statements of defendant No.2 as would show that the item claimed would not belong to the estate of the deceased

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must be left at that. This would be true of the business carried on by the defendant No.2 separately and individually after the death of the deceased. Since the deceased was admittedly a sole proprietor only the net amount of credits in his bank account shown by the plaintiff would be the present entitlement of the parties for distribution. The remainder cannot be considered at this stage. With regard to items 2 and 3 though the defence is illusory and vague, the admission is not seen and hence those items must be left to be decided in the trial albeit after calling upon defendant Nos. 1 and 2 to give full particulars of the claim made by them with the documentary evidence.

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Item No. 1 rests on a wholly different footing and would have to be considered for distribution of the share of the plaintiff as also defendant No.3 since exclusive possession complained by the plaintiff and reiterated by defendant Nos. 1 and 2 constitutes no defence whatsoever for denying or delaying the distribution and division of that part of the admitted estate of the deceased.

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It may be mentioned that in a suit such as this it is for the parties who are siblings to iron out differences, if any, that would have naturally arisen leading one of them to file the suit to claim his admitted share. Of course, the true defence with regard to any of the properties would have to be brought out and seen by the Court. This must be done with sufficient particulars specially when a sibling claims that a particular property is not the estate of the

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deceased as has been sought to be claimed specially for item Nos. 1 to 4 in the list of property Exhibit-B to the plaint. If that is clearly shown such property would not be considered for grant of protective relief or its division. If that is not done and it is seen that a defendant sibling tries to bind time by putting up certain defence and claims that because any defence is put up the Court must stay its hands, the Court must rise to the situation and ascertain facts and information. That is what has been done in this case.

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It may be mentioned that the parties are educated and cultured persons. Defendant No.2, who has himself appeared in Court, has been forthright with the Court when the Court sought to elicit actual information with regard to the suit properties. His defence with regard to item No.1 does not carry his case any further. His own case is upon a nomination and not the testament of the deceased. The law is clear and must be applied forthwith and not kept on the back-burner as was sought to be contended on his behalf. The clear law applicable to the parties must be applied by the Court at every stage of the suit. It cannot be left to be applied only at the final hearing of the suit. Claiming that would be abuse of the judicial process and granting that would be Court mismanagement. It is, therefore, that the salutary position of judgment on admission must be utilised whenever required. It may be mentioned, that it would be most utilised in cases such as this when the relationship between the parties, the applicable law, the

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extent of the shares of the parties under that law and the position with regard to the properties are admitted and stated to Court. The Court would then not require to wait for determination of other questions between the parties and if the parties are not at issue would be duty bound to, atonce, pronounce judgment.

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Hence the case of the parties with regard to the aforesaid suit properties shall have to be determined as follows:

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(a) The case of mere residence and nomination of defendant Nos. 1 and 2 in respect of the flat at item No.1 without any will of the deceased in their favour cannot confer upon them any rights exclusive of the plaintiff and defendant No.3 in the suit flat in Jupitor, Mumbai.

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(b) Though the case made out by defendant No.2 in respect of properties at item Nos. 2 & 3 is seen to be wholly unsubstantiated by any documentary evidence and wholly untenable, it would have to be seen at the trial upon detailed particulars relating to those items being set out in the written statement of defendant Nos. 1 and 2.

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(c ) The admitted proprietary business of the deceased having come to an end, the admitted bank account of the proprietary firm, representing the estate of the deceased, would have to be shared by the parties as the admitted heirs of the deceased, subject to the

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claims of third parties/creditors of the deceased/his proprietary firm being shown and substantiated by defendant Nos. 1 and 2 in respect of item Nos. 4 & 13.

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(d) The proceeds in the Dmat account in item No.13 vest in the nominee.

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(e) The parties shall have to jointly claim their father's share in the equity shares standing in his name in the Company shown in item No.11.

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(f) The parties shall have to jointly get the share of the deceased father of the parties transferred to the names of the parties in respect of items 5, 6, 7, 8, 9 & 10.

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(g) The parties shall have to be represented as the heirs of the deceased in the place and stead of the deceased in the Appeal from arbitration proceedings pending in this Court in respect of item Nos. 12 & 14 to 24.

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Aside from the above estate shown by the plaintiff it is contended by the defendant No.3 that there is another bank account in Development Credit Bank, Crawford Market branch of the deceased. Defendant Nos. 1 and 2 are shown to be in-charge of the estate of the deceased. Defendant Nos. 1 and 2 alone would know the further estate of the deceased. It is for them to disclose

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the entire estate of the deceased, though the parties may be assisted by an order of Court to prove details from third parties such as the aforesaid Bank, if necessitated.

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Since this is an administration suit requiring declaration of the share of the parties and partition of each share, the Judgment on admission that can be passed under the provisions of Order 12 Rule 6(1) of the CPC would be in terms of a preliminary decree determining the extent of the admitted share of the parties and passing directions in terms of the division and distribution of such share or directions for obtaining such share.

¶142

Hence all the suit properties are required to be protected pending further orders in the suit.

¶143

Hence the following order:

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(a) Defendant Nos. 1 and 2 shall not deal with, dispose off, alienate, encumber, part with possession, transfer or create any 3^rd party rights in any of the suit properties in any manner without the consent of the plaintiff and defendant No.3.

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(b) Parties shall obtain the valuation/market value of flat No.243 in Jupitor, Mumbai considering also the Ready Reckoner of 2013-14 as the base value.

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Defendant Nos. 1 and 2 shall pay 2/7^th of that valuation to

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the plaintiff and 1/7^th to defendant No.3. If defendant Nos. 1 and 2 cannot or do not pay the valuation, the flat would have to be sold to the third party and all the parties would be entitled to their share as per Sheriat law. Liberty to apply to all parties.

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(c ) The credit balance in the bank accounts of the deceased shall be divided and distributed between the parties. Defendant Nos. 1 and 2 shall pay the plaintiff and defendant No.3 their 2/7^th and 1/7^th shares therein.

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(d) The parties shall be entitled to apply for transmission of the equity shares in Afsons Pvt. Ltd to their names to the extent of their admitted 2/7^th and 1/7^th shares therein.

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(e) The parties shall apply for and get other immovable properties of the deceased transferred to the names of the heirs of the deceased as stated above.

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(f) With regard to the properties in which Court Receiver is appointed and which are pending in appeal against the arbitration award, the parties shall be entitled to be represented as the heirs of the deceased.

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(g) The parties to the suit shall be entitled to apply to the Development Credit Bank for being provided the statement of

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account of the deceased, if any, in Development Credit Bank. The Manager, Development Corporation Bank, Crawford Market branch shall issue a statement of account of the deceased from October, 2010 to any of the parties to the suit, certified as a true copy under the Bankers' Book Evidence Act.

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(h) No share of defendant No.3 shall be paid to her until she pays the Court fees in respect of her 1/7^th share in the estate of the deceased.

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(i) Defendant Nos. 1 and 2 shall file an affidavit disclosing on oath any further estate of the deceased comprising movable and immovable properties.

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(j) Notice of Motion is disposed of accordingly.

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(k) On the application of Counsel on behalf of defendant Nos. 1 and 2 the above order except the order of injunction, is stayed till 10^th June, 2013.

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(l) Defendant Nos. 1 and 2 shall file their written statement within 30 days as they have been represented in the suit and are deemed to have been served the writ of summons.

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(ROSHAN DALVI, J.)

Zulkrnain M. Kagalwalla v. Mumtaz Hussain M. Kagalwala and 2 Ors.

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Zulkrnain M. Kagalwalla v. Mumtaz Hussain M. Kagalwala and 2 Ors.

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