Dismissed

Mr. Mohanlal Jindal v. M/S. Rest House Developers

Karnataka HC15 Mar 2024MFA/181/2024

Case brief

AI extract

What is this about?

Appeals against temporary injunction restraining a retired partner from alienating or encumbering suit property conveyed to him under sale deeds allegedly executed without consideration after he transferred Rs.12.26 crore from the firm's account before retirement from the partnership. High Court found alleged fraud disclosed a prima facie case and upheld the Trial Court's discretion.

What the court decided

AI extract

Mr. Mohanlal Jindal Vs M/S. Rest House… — Contract and Commercial Disputes | Karnataka HC (2024)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 15^th DAY OF MARCH, 2024

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BEFORE

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THE HON'BLE MR. JUSTICE H.P. SANDESH

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M.F.A. NO.181/2024 (CPC) C/W. M.F.A. NO.173/2024 (CPC) M.F.A. NO.211/2024 (CPC)

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IN M.F.A. NO.181/2024:

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BETWEEN:

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1 . MR. MOHANLAL JINDAL SINCE DECEASED BY LRS

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1(a) MR. SUSHIL KUMAR JINDAL, S/O LATE MOHANLAL JINDAL AGED ABOUT 57 YEARS NO.17, LAXMI ROAD SHANTINAGAR BANGALORE-560017.

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1(b) MRS. AMRITHA AGARWAL D/O LATE MOHANLAL JINDAL AGED ABOUT 66 YEARS H.N.1191, JUBILEE HILLS, ROAD NO.59, SHAIKPET, HYDERABAD-500033

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1(c) MRS. DIMPLE BAJAJ D/O LATE MOHANLAL JINDAL AGED ABOUT 50 YEARS FLAT NO.S3/S4, 2ND FLOOR, A BLOCK,

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LANDMARKS TOWN HALL APTS., 69/71, MC NICHOLS ROAD, CHETPET, CHENNAI-600031. … APPELLANTS

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(BY SRI B.K.SAMPATH KUMAR, SENIOR COUNSEL FOR SRI SURAJ SAMPATH, ADVOCATE)

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AND:

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1 . M/S. REST HOUSE DEVELOPERS A PARTNERSHIP FIRM, REPRESENTED BY ITS PARTNER, MR. AVINASH PRABHU, HAVING ITS OFFICE AT 206 AND 207 SOPHIA’S CHOICE, ST. MARKS ROAD, BANGALORE-560001. … RESPONDENT

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(BY SRI J.P.DARSHAN, ADVOCATE FOR C/R)

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THIS M.F.A. IS FILED U/O 43 RULE 1(r) R/W SECTION 151 OF CPC, AGAINST THE ORDER DATED 16.12.2023 PASSED ON I.A.NO.2 IN O.S.NO.5438/2023 ON THE FILE OF THE XXX ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU CCH-31, ALLOWING THE I.A.NO.2 FILED UNDER ORDER 39 RULE 1 AND 2 OF CPC.

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IN M.F.A. NO.173/2024:

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BETWEEN:

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1 . MR. MOHANLAL JINDAL SINCE DECEASED BY LRS

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1(a) MR. SUSHIL KUMAR JINDAL, S/O LATE MOHANLAL JINDAL AGED ABOUT 57 YEARS NO.17, LAXMI ROAD SHANTINAGAR BANGALORE-560017.

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1(b) MRS. AMRITHA AGARWAL D/O LATE MOHANLAL JINDAL AGED ABOUT 66 YEARS H.N.1191, JUBILEE HILLS, ROAD NO.59, SHAIKPET, HYDERABAD-500033

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1(c) MRS. DIMPLE BAJAJ D/O LATE MOHANLAL JINDAL AGED ABOUT 50 YEARS FLAT NO.S3/S4, 2ND FLOOR, A BLOCK, LANDMARKS TOWN HALL APTS., 69/71, MC NICHOLS ROAD, CHETPET, CHENNAI-600031. … APPELLANTS

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(BY SRI B.K.SAMPATH KUMAR, SENIOR COUNSEL FOR SRI SURAJ SAMPATH, ADVOCATE)

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AND:

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1 . M/S. REST HOUSE DEVELOPERS A PARTNERSHIP FIRM, REPRESENTED BY ITS PARTNER, MR. AVINASH PRABHU, HAVING ITS OFFICE AT 206 AND 207 SOPHIA’S CHOICE, ST.MARK’S ROAD, BANGALORE-560001. … RESPONDENT

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(BY SRI J.P.DARSHAN, ADVOCATE FOR C/R)

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THIS M.F.A. IS FILED U/O 43 RULE 1(r) R/W SECTION 151 OF CPC, AGAINST THE ORDER DATED 16.12.2023 PASSED ON I.A.NO.5 IN O.S.NO.5438/2023 ON THE FILE OF THE XXX ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU CCH-31, REJECTING THE I.A.NO.V FILED UNDER ORDER 39 RULE 4 R/W SECTION 151 OF CPC.

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IN M.F.A. NO.211/2024:

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BETWEEN:

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1 . MR. MOHANLAL JINDAL SINCE DECEASED BY LRS

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1(a) MR. SUSHIL KUMAR JINDAL, S/O LATE MOHANLAL JINDAL AGED ABOUT 57 YEARS NO.17, LAXMI ROAD SHANTINAGAR BANGALORE-560017.

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1(b) MRS. AMRITHA AGARWAL D/O LATE MOHANLAL JINDAL AGED ABOUT 66 YEARS H.N.1191, JUBILEE HILLS, ROAD NO.59, SHAIKPET, HYDERABAD-500033

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1(c) MRS. DIMPLE BAJAJ D/O LATE MOHANLAL JINDAL AGED ABOUT 50 YEARS FLAT NO.S3/S4, 2ND FLOOR, A BLOCK, LANDMARKS TOWN HALL APTS., 69/71, MC NICHOLS ROAD, CHETPET, CHENNAI-600031. … APPELLANTS

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(BY SRI B.K.SAMPATH KUMAR, SENIOR COUNSEL FOR SRI SURAJ SAMPATH, ADVOCATE)

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AND:

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1 . M/S. REST HOUSE DEVELOPERS A PARTNERSHIP FIRM, REPRESENTED BY ITS PARTNER, MR. AVINASH PRABHU, HAVING ITS OFFICE AT 206 AND 207

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SOPHIA’S CHOICE, ST.MARK’S ROAD, BANGALORE-560001. … RESPONDENT

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(BY SRI J.P.DARSHAN, ADVOCATE FOR C/R)

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THIS M.F.A. IS FILED UNDER ORDER 43 RULE 1(r) OF CPC, AGAINST THE ORDER DATED 16.12.2023 PASSED ON I.A. NO.1 IN O.S.NO.5438/2023 ON THE FILE OF THE XXX ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU CITY (CCH-31), ALLOWING THE I.A. NO.1 FILED UNDER ORDER 39 RULE 1 AND 2 OF CPC.

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THESE APPEALS HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 22.02.2024 THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

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J U D G M E N T

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These three Miscellaneous First Appeals are filed

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under Order 43 Rule 4 of CPC praying the Court to set-aside the order dated 16.12.2023 for dismissal of I.A.No.5 filed under Order 39 Rule 4 R/w Section 151 of CPC, set-aside the order passed on I.A.Nos.1 and 2.

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The factual matrix of case of plaintiff before the Trial Court in a suit for permanent injunction restraining the defendant, their servants, agents, henchmen, representatives or anyone claiming through or under them, from in any way

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interfering with the peaceful possession and enjoyment of the suit schedule property or from encumbering or alienating the suit schedule property. It is contended in the plaint that plaintiff is the absolute owner of all piece and parcel of land bearing Muncipal No.12(Old No.7) Rest house road measuring 16185 Sq. Ft morefully described in the schedule, the same was purchased vide sale deed dated 28.05.2007. The said property was purchased by the plaintiff firm registered as per the partnership deed dated 27.01.2007. The respective sharing ratio in the partnership firm is mentioned as 50% in respect of Mohan Lal Jindal, 25% in respect of Avinash Prabhu and 25% in respect of Dhiraj Prabhu. The said firm agreed to develop the suit schedule property and share profit and loss in the ratio provided above, the defendant was a sole signatory and had exclusive control of the bank accounts of the firm.

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It is also contended in the plaint that during the course of business, the partners of the plaintiff firm and the defendant contributed funds to the partnership firm through M/s integrated Constructions Firm, where the defendant and Mr.Avinash Prabhu, one of the partners of the plaintiff

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partnership firm were the partners. That the said funds received from the said M/s Integrated Constructions Firm was considered investment to the plaintiff firm.

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The plaintiff also contended that the defendant thereafter expressed his desire to retire from the partnership firm and represented that the defendant does not wish to participate in the daily affairs of the partnership firm and the defendant requested the partners of the plaintiff firm to register two apartments in favour of the defendant in lieu of the contributions by the defendant to the partnership firm and additional contribution of Rs.12,26,59,601/- transferred by the defendant on 22.07.2013 for registration of the sale deeds/construction agreements and for retirement of defendant from the partnership firm.

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It is also contended that upon mutual discussion and in lieu of defendant contribution to the firm, the firm agreed to register 15,774 Sq. Ft of super built up area together with eight (8) car parking slots and an additional area of 1191.89 Sq. Ft of terrace/Garden area comprising of two apartments in the apartment complex, which was to be constructed in the suit

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schedule property in favour of the defendant. It is contended that the defendant, Mr.Avinash Prabhu and Mr.Dhiraj Prabhu entered into a deed of retirement cum reconstruction of the firm “REST HOUSE DEVELOPERS” dated 24.07.2013 recording the above understanding and accordingly Mr.Avinash Prabhu and Mr.Dhiraj Prabhu became the only two partners of the firm after defendant’s retirement. It is also contended that on the very same day plaintiff’s firm represented by its partners Mr.Avinash Prabhu and Mr.Dhiraj Prabhu executed two registered deed of sale dated 24.07.2013 conveying undivided share to defendant and also two registered construction agreements dated 24.07.2013 for construction of two apartments in the apartment complex to be constructed without any sale consideration in lieu of defendants contributions in the firm. It is contended that as per the partnership deed dated 27.01.2007, entire maintenance and sole signatory of the bank account of the partnership firm was with the defendant, that to the utter shock of plaintiff, after execution of the aforesaid two sale deeds and construction agreements on 24.07.2013 and after taking over the management of the firm came to know that two days before

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execution of sale deeds and construction agreements, the defendant has illegally transferred funds of Rs.12,26,59,601/from the firm’s account to defendant’s firm M/s Jindal Steels without the knowledge of plaintiff firm partners and misrepresenting to the partners of the partnership firm that defendant shall relinquish his contributions to the firm in lieu of the two apartments conveyed to defendant.

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It is also contended that said funds transferred by

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defendant to his firm M/s Jindal Steels was nothing but the contribution of defendant to the plaintiff firm in lieu of which the sale deeds and construction agreements came to be executed and the reconstitution of the partnership deed of plaintiff firm was executed. The defendant is taking advantage of the sole signatory powers of the firm’s bank account conferred under the partnership deed dated 27.01.2007 defendant has deceived plaintiff to believe defendant is relinquishing his contributions including the sum of Rs.12,26,59,601/- contributed to the firm to execute sale deeds and construction agreements in favour of the defendant, at the same time taking away the contribution from the firm illegally by transferring Rs.12,26,59,601/- to

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defendant’s firm M/s Jindal Steels in order to enrich himself. When the partners of plaintiff firm confronted defendant on the aforesaid matter, defendant informed plaintiff that defendant shall not claim ownership of the suit schedule property as he was withdrawn the funds from the partnership firm and have not paid any sale consideration under the sale deeds dated 24.07.2013 and construction agreements dated 24.07.2013. It is also contended that believing the aforesaid words by defendant, the partners of the plaintiff firms called upon the defendant on several occasions to come forward to cancel the two sale deeds dated 24.07.2013 and construction agreements dated 24.07.2013. However, defendant has never come forward to execute the cancellation agreements and has shut all channels of communication with the plaintiff. It is contended that since defendant has not paid any sale consideration, the two sale deeds dated 24.07.2013 and construction agreements dated 24.07.2013 are void and no portion of the suit schedule property or apartments has been sold/conveyed to defendant under the said deeds/agreements. The plaintiff firm are the absolute owner of the suit schedule property and have put up a residential

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apartment on the suit schedule property and have put up a residential apartment on the suit schedule property by making huge investments which is nearing completion and Mr.Avinash Prabhu and Dhiraj Prabhu the partners of plaintiff firm are in peaceful possession and enjoyment of the suit schedule property from 24.07.2013 when the defendant retired form the firm. The copy of the photos of the residential complex are also produced. It is also contended that utter shock, defendant’s henchmen on 19.06.2023 have come to suit schedule property and are claiming rights based on the void sale deeds dated 24.07.2013 and threatened the engineers in the suit schedule property contending that the property belongs to the defendant and once again they came near the property on 21.06.2023 and defendant’s henchmen contacted plaintiff firm partner Mr.Avinash Prabhu through phone and whatsapp and informed that certain bank officials are coming to visit the suit schedule property to inspect the property being fully aware that the defendant has no valid title over the suit schedule property and immediately the said Avinash Prabhu seeking meeting with defendant’s son to discuss regarding the matter for which

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defendant’s henchmen denied for the meeting. It is contended that the defendant and his henchmen are illegally trying to claim ownership of the suit schedule property and it has come to the knowledge of the plaintiff that the defendant has been trying to mortgage and alienate the suit schedule property based on the void sale deeds with various banks and by fraud obtained loans by misleading the banks to enrich himself and also trying to hamper the construction on the suit schedule property and disturbing the peaceful possession. Hence, issued legal notice dated 21.08.2023. After the issuance of notice, defendant is making speedy efforts to alienate the suit schedule property to third party and mortgage the suit property. Hence, the suit is filed. The plaintiff also inter-alia sought for the relief of temporary injunction to restrain the defendant from interfering with the possession and also restrain the defendant from encumbering or creating any third party right i.e., I.A.Nos.1 and 2.

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In pursuance of suit summons, the defendant has appeared and filed written statement and also filed application under Order 39 Rule 4 of CPC vacating the interim order since

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the Trial Court has granted interim order against the defendant. The SPA holder of the defendant who is the son of defendant has contended that the plaintiff has obtained a exparte interim order in his favour on 26.08.2023 by suppressing the various material facts and by misleading the Court. It is contended that the plaintiff has approached the Court after delay of more than 10 years without any plausible explanation and he has been managing his own accounts from 24.07.2013 without any interference or involvement of the defendant and thus, the suit filed on 24.08.2023 is barred by delay, latches and is hit by limitation and the plaintiff is not entitled for interim relief.

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It is contended that the present suit is not maintainable as no injunction can be granted against the lawful or true owner having title over the property. Furthermore, the plaintiff has not bother to mention the description of two flats owned by the defendant in the schedule and it has chosen to only mention the larger extent upon which the building is under construction, wherein the two flats are located. There is no question or risk of the defendant alienating the suit schedule property as is sought to be made out by the plaintiff since the

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defendant is only the owner of a proportionate undivided share in the suit schedule property along with the 2 flats to be constructed thereon. The plaintiff not sought any relief of declaration to declare deeds of sale deed dated 24.07.2013 as null and void ab initio, injunction cannot be granted in a suit for bare injunction. It is contended that it is settled position of law that even if a document or order is null and void, it is not permissible for the plaintiff to ignore the same since it is void/voidable in its opinion. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get the said sale deeds declared as void or otherwise upset, they will remain as effective for their ostensible purpose as the most impeccable of deeds and will still be capable of legal consequences as in the present case.

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It is contended that the defendant had contributed funds of Rs.3,67,38,841.20/- to the plaintiff firm through his share in M/s Integrated Constructions on 31.03.2008. Admittedly, additional sum of Rs.12,26,59,601/- was transferred by the defendant to the plaintiff on 22.07.2013. Thus in lieu of investment of Rs.16,09,04,806/- by the defendant, a settlement

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was arrived at between the parties vide settlement deed dated 24.07.2013, whereby the defendant agreed to retire as a partner in the plaintiff firm and the sale deeds for the residential apartment Nos.2 and 6 in ‘Skyline Villa Maria’ were duly executed. It is clearly recorded therein in clause No.5.1 that the interim balance sheet had been signed. Thus, now, the plaintiff cannot claim after ten years that he was unaware of the alleged illegal transfer of Rs.12,26,59,601/- from the plaintiff’s account to M/s Jindal Steels. Most pertinently, M/s Jindal Steels is independent from the defendant had been investing crores of rupees in the plaintiff firm right from 02.02.2007, which is evidenced from the plaintiff’s own ledger account. In lieu of the said investment by M/s Jindal Steels in the plaintiff’s firm right from the year 2007, the plaintiff transferred a sum of Rs.12,26,59,601/- to M/s Jindal Steels along with interest on 22.07.2013 with the full knowledge and consent of all the partners of the plaintiff. In fact, the plaintiff also remitted TDS of Rs.15,31,225/- to the credit of M/s Jindal Steels on 14.09.2013 after the exit of the defendant from the plaintiff firm towards the interest paid for investment by M/s Jindal Steels. Thus, the same

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indicates the malafides of the plaintiff’s partners who despite being aware of all these transactions have falsely stated on oath that the money was siphoned out behind their back by the defendant.

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It is contended that the plaintiff has nowhere stated any particulars as to when it got to know about the alleged fraud or when it confronted the same purportedly to the defendant or when he allegedly assured the plaintiff that he would not claim ownership of the suit schedule property. No an iota of proof has been produced by the plaintiff to prove its claims in para Nos.14 and 15 of the plaint which are repeated verbatim in para Nos.13 and 14 of the affidavits filed in support of I.A.Nos.1 and 2. Moreover, the partners of the plaintiff cannot raise the said claims after 10 years since they have always had control of the accounts of the firm and in any case, right from 24.07.2013 after the exit of the defendant. The partners of the plaintiff have been filing its IT returns every year and they cannot feign ignorance such a huge transaction in excess of Rs.12 crores for over 10 years. The plaint has been cleverly drafted to create the illusion of a cause of action where none exists and the plaintiff is only

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trying to harass the defendant in his old age and extort money from him.

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It is contended that on the contrary, the plaintiff has defaulted in its obligations to the defendant to complete the construction of the apartment building by 23.01.2015 and the said construction has been abandoned and left incomplete for several years. The defendant being the lawful and absolute owner having right, title and interest over the said apartments and the proportionate undivided share in the suit schedule property, has got every right to sell, alienate or mortgage the residential apartment Nos.2 and 6 without any interference and he cannot be restrained from the passing any of the order.

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The plaintiffs have also filed objections to the I.A.No.5 contending that defendant has filed the said application with molafide intention and false statements are made in the written statement and objections.

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The Trial Court having taken note of the pleadings of the parties formulated the point whether the plaintiff has made out a prima facie case, whether the balance of convenience lies in favour of the plaintiff and whether the plaintiff suffers from

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any irreparable loss and injury and also formulated the point whether the defendant has proved the plaintiff has knowingfully made false and misleading statements in respect of the material particulars and application filed by the defendant needs to be allowed. The Trial Court having considered the material on record answered the point Nos.1 to 3 as affirmative and answered the point No.4 as negative in allowing the application filed under Order 39 Rule 1 and 2 of CPC by the plaintiff and rejected the application filed by the defendant.

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The Trial Court taken note of the fact with regard to the total amount of Rs.16,09,04,906/- and also taken note of the fact that the defendant being one of the partner has transferred Rs.12,26,59,601/- to M/s Jindal Steels on the same day. The said fact is not coming forth in any of the document submitted by the plaintiffs or the defendant and also comes to the conclusion that it is also not forthcoming as to whether the plaintiff firm has executed two registered sale deeds and two registered construction agreements in favour of defendant towards the contribution made by the defendant including the amount of Rs.12,26,59,601/- which was transferred to M/s

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Jindal Steel by the defendant in the capacity as partner of the plaintiff firm. It is also the contention of the plaintiff that a sale of an immovable property has to be for a price and if the sale deed in respect of an immovable property is executed without payment of price and if it does not provide for the payment of price at a future date, it is not at all valid in the eyes of law. It is of no legal effect and therefore such a sale will be void. The Trial Court taking into note of the material on record, comes to the conclusion that plaintiff has made out prima facie case in his favour and balance of convenience is also lies in his favour as if this Court do not grant the relief of injunction in respect of creating of charge over the suit property and thereby plaintiff may suffer from irreparable loss and injury as well and granted the relief in restraining the defendant from alienating or encumbering the suit schedule property in whatsoever manner till the disposal of the suit and also dispossessing the plaintiff from peaceful possession of the suit schedule property in whatsoever manner till the disposal of the suit by allowing I.A.Nos.1 and 2 and rejected the application filed under Order 39 Rule 4 of CPC. Hence, these 3 appeals are filed before this Court.

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The main contention of the counsel appearing for the appellant in his argument that the learned Judge has passed the impugned order mechanically and arbitrarily without application of mind. When the Trial Court comes to the conclusion that factum of transfer of Rs.12,26,59,601/- to M/s Jindal Steels is not forthcoming in any of the documents submitted by either of the parties by overlooking the innumerable documents produced by the appellant, most of which belong to the respondent itself, which clearly shows that both the appellant and M/s Jindal Steels had made separate contributions/investments from time to time to the respondent and that the amount lawfully paid to M/s Jindal Steels on 22.07.2013 was the repayment of such investments. Even there is no any reference to the said documents in the reasoning made in the impugned order. The respondent’s own ledger accounts, Journal vouchers, ledger account of the respondent maintained by M/s Jindal Steels, bank statement of M/s Jindal Steels issued by its banker, the balance sheet of the respondent for the assessment year 2012-2013, the settlement deed, etc, all clearly set out the payments/contributions/investments made by M/s Jindal Steels

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apart from the separate contributions of the appellant to the respondent but the learned trial Judge comes to a grossly incorrect conclusion that it is not forthcoming whether the respondent executed the sale deeds and constructions agreements in favour of the appellant towards the contributions made by the appellant excluding the money of Rs.12,26,59,601/- which was transferred to M/s Jindal Steels by the appellant in the capacity as partner of the respondent. The learned trial Judge has overlooked the fact that absolutely no explanation is forthcoming from the respondent as to the several transactions, both credit and debit, between the respondent and M/s Jindal Steels, right from 2007 till 12.12.2013, much after the appellant retired from the respondent firm on 24.07.2013 or the fact that TDS was paid in respect of M/s Jindal Steels by the respondent as late as on 14.09.2013. The trial Judge has failed to note that there is zero communication produced to show that the respondent’s current partners confronted the appellant about anything right from 24.07.2013, when they had total control of their firm, till the date of the suit. The learned Trial Judge has overlooked the fact that absolutely no steps have been taken by

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the respondent for over 10 years. The counsel also would vehemently contend that the trial Court committed an error in relying upon the judgment in Kewal Krishan’s case and the same has no application to the facts of the present case. The appellant has paid the initial sale consideration and it is only the balance sale consideration which is being belatedly disputed by the respondent as having been paid by the appellant and withdrawn side by side. It is contended that the decision in Dahiben’s case reported in (2020) 7 SCC 366 squarely applies to the matter and the suit filed by the respondent for bare injunction is not maintainable and even if the illusory cause of action were to be believed, the respondent can only file a suit for a recovery of money.

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The counsel also in support of his contention relied upon the judgment reported in LAWS (SC) 2022 (3) 7 in case of Padhiyar Prahladji Chenaji (deceased) through LRs V/s Maniben Jagmalbhai (deceased) through LRs wherein held

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that injunction cannot be issued against a true owner or title holder and in favour of a trespasser or a person in unlawful possession, person in possession of land in assumed character of

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owner and exercising peaceably the ordinary rights of ownership has a perfectly good title against all the world but the rightful owner and hence, is not entitled to any injunction and or protect his possession against rightful owner, more particularly when he fails to get declaratory relief and dispute with respect to title comes to an end; where once a suit is held not maintainable, no relief of injunction can be granted.

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The counsel also relied upon the judgment reported in (2006) 1 SCC 283 in case of Vishnu @ Undrya V/s State

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of Maharashtra and contend that men may lie but documents do not lie.

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The counsel also relied upon the judgment reported in (2022) 2 SCC 25 in case of Union of India and others V/s N.Murugesan etc and counsel referring this judgment would contend that principle of approbate and reprobate is based on doctrine of election postulates that no party can accept and reject same instrument and that a person cannot say at one time that a transaction is valid and thereby obtain some advantage to which he could only be entitled on footing that it is valid and then turn round and say it is void for purpose of securing some

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other advantage; where one knowingly accepts benefits of a contract or conveyance or order, he is stopped from denying validity of or the binding effect of such contract or conveyance or order upon himself.

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The counsel also relied upon the judgment reported in LAWS (KAR) 2021 (7) 153 (DB) in case of P.Mamatha and another V/s P.Ramasubbamma and others wherein held that generally a registered instrument can be cancelled or revoked only by a deed of revocation or cancellation duly executed and registered; When a plaintiff seeks to establish a title in himself and cannot establish that title without removing an insuperable obstacle such as a decree or deed to which he has been a party or by which he is otherwise bound, then quite clearly he must get that decree or deed cancelled or declared void by making such a prayer; When the plaintiff is seeking to establish a title finds himself threatened by a decree or deed, the proper remedy is to get a declaration that the decree or deed is invalid so far as he himself is concerned.

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The counsel also relied upon the judgment

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reported in AIR 2010 SC 2807 in case of Suhrid Singh @ Sardool Singh V/s Randhir Singh and others

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wherein it is held that where executant of a deed wants it to be annulled, he has to seek cancellation of deed; But If a non-executant seeks annulment of a deed, he has to seek a declaration that deed is invalid or non est or illegal or that it is not binding on him; Difference between a prayer for cancellation and declaration in regard to a deed of transfer/conveyance; If executant of deed seeks cancellation of deed, he has to pay ad-valorem Court Fee on consideration stated in sale deed.

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The counsel also relied upon the judgment reported in AIR 2001 KER 305 in case of N.Narayani Ammal V/s P.Sanjeev and another wherein held that when consent to an agreement is caused by coercion, fraud or misrepresentation, agreement is a contract voidable at option of party whose consent was so caused and not null

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and void even if entire averment in plaint are accepted as correct under Section 19 of Indian Contract Act.

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The counsel also relied upon the judgment reported in LAWS (J AND K) 1981 (10) 2 in case of Gopi Nath Bayu V/s Prabha Wati by referring this judgment, the counsel would vehemently contend that one co-owner cannot sue another co-owner for permanent injunction restraining him from interfering with his joint property.

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The counsel also relied upon the judgment reported in AIR 2000 SC 2281 in case of Haresh Dayaram Thakur V/s State of Maharashtra and others wherein it is held that under Section 73(3) of the Arbitration and Conciliation Act, 1996 a settlement agreement signed by the parties is final and binding on the parties and persons claiming under them; Such a settlement agreement has status and effect of legal sanctity of an arbitral award under Section 74 of the Arbitration and Conciliation Act, 1996.

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Per Contra, the counsel appearing for the

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respondent in his argument would vehemently contend that the document Ex.R2 is a partnership deed and in terms of the clause 6 he was first partner. The counsel also would vehemently contend that though the said sale deeds are executed, possession has not been delivered and agreement not a sale deed.

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The counsel also would vehemently contend that when the sale deed was executed possession has not been delivered. In the construction agreement penalty of Rs.20,000/- is fixed for non-completion of the construction. The counsel pressed into service of Section 61, 73 and 74 of Arbitration Act and also Section 74. The counsel also would vehemently contend that the construction agreement is not duly stamped and Section 34 of Karnataka Stamps Act attracts. The counsel also would vehemently contend that amount of Rs.12,26,59,601/- was transferred to the account of the M/s Jindal Steels. The counsel in his

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argument would vehemently contend that Court has to take note of the fraudulent Act of the defendant in transferring the amount within two days of the sale deed and the sale deed came into existence.

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The counsel also in support of his argument, he contend that photos which have been produced before the Court is clear that the schedule property is still under construction, the same is not completed. In the plaint, specifically pleaded with regard to the fraud on the part of the appellant in getting the sale and signed of construction agreement and the Trial Court has taken note of the fact with regard to the transfer of the amount by the defendant two days prior to the alleged transaction.

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The counsel also would submits that no dispute with regard to the fact that earlier he was the partner and he expressed his desire to retire from the partnership. The partnership is also reconstituted and he left the partnership. He played fraud on the plaintiff and obtained the said

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document and without any payment of sale consideration there cannot be any document in his favour.

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The counsel in support of his argument also relied upon the judgment of the Apex Court dated 22.11.2021 passed in Civil Appeal No.6989-6992 of 2021 in case of Kewal Krishnan V/s Rajesh Kumar and others , etc., and brought to notice of this Court paragraph No.15 wherein the Apex Court discussed Section 54 of Transfer of Property and extracted the said section and held that a sale of an immovable property has to be for a price. The price may be payable in future. It may be partly paid and the remaining part can be made payable in future. The payment of price is an essential part of a sale covered by Section 54 of the TP Act. If a sale deed in respect of an immovable property is executed without payment of price and if it does not provide for the payment of price at a future date, it is not a sale at all in the eyes of law. It is no legal effect. Therefore, such a sale will be void.

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It will not effect the transfer of the immovable property. The counsel also brought to notice of paragraph No.16 of the judgment wherein further held that thus, the sale deeds of 10^th April 1981 will not confer any right, title and interest on Sudarshan Kumar’s wife and children as the sale deeds will have to be ignored being void. It was not necessary for the appellant to specifically claim a declaration as regards the sale deeds by way of amendment to the plaint. A document which is void need not be challenged by claiming a declaration as the said plea can be set up and proved even in collateral proceedings.

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The counsel also relied upon the judgment of Apex Court (2023) SCC ONLINE SC 1526 in case of Shakeel Ahmed V/s Syed Akhlaq Hussain and brought to notice of this Court paragraph No.10 wherein also the Apex Court held that it is to be emphasized that irrespective of what was decided in the case of Suraj Lamps and Industries (suupra) the fact remains that no title could be

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transferred with respect to immovable properties on the basis of an unregistered agreement to sell or on the basis of an unregistered General Power of Attorney. The registration Act, 1908 clearly provides that a document which requires compulsory registration under the Act, would not confer any right, much less a legally enforceable right to approach a Court of law on its basis.

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The counsel also relied upon the judgment of the Apex Court (2009) 4 Supreme Court Cases 193 in case of Kaliaperumal V/s Rajagopal and another and brought to notice of this Court paragraph No.17 wherein discussion was made that if the intention of parties was that title should pass on execution and registration, title would pass to the purchaser even if the sale price or part thereof is not paid. In the even of non-payment of price thereafter, the remedy of the vendor is only to sue for the balance price and in paragraph Nos.18 and 19 discussed with regard to the ownership and title to the property will pass to the

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purchaser on registration of the sale deed with effect from the date of execution of the sale deed. But this is not an invariable rule, as the true test or passing of property is the intention of the property. Though registration is prima facie proof of an intention o transfer the property, it is not proof of operative transfer; the payment of consideration is condition precedent for passing of the property. In paragraph No.19 also discussed with regard to merely by execution and registration of the deed or whether they intended the transfer of the property to takes place, only after receipt of entire consideration, to depend on the intention of the parties. The Court also to take note of conduct of parties can be looked into for ascertaining the intention.

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The counsel also relied upon paragraph No.20, 21 and 22 of the judgment wherein discussed it is admitted that the possession of the suit properties purported to have been sold under the sale deed had never delivered to the

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appellant and continued with the respondents. The counsel referring this also would vehemently contend that possession continued with the respondents herein.

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The counsel also relied upon the judgment of the Apex Court reported in 2018 SCC ONLINE KAR 4148 in case of Seshadri V/s Mr.Shobha Prabhakar and referring this judgment the counsel brought to notice of this Court paragraph Nos.20 to 22 wherein discussed with regard to the consideration of sale and also in paragraph No.23 held that it is well settled that any attempt to take possession of property by force is impermissible in law. It may be apt to refer to the following passages from the judgment of the Apex Court in case of Rame Gowda

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(DEAD) by LRs’ V/s M.Varadappa Naidu (dead) by LRs’ and law respects possession even if there is no title to support it, it will not permit any person to take the law in his own hands and dispossess a person in actual possession

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without having recourse to a Court. No person can be

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allowed to become a Judge in his own cause.

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The counsel also relied upon the judgment of

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this Court passed in M.F.A.No.5209/2018 and brought to notice of this Court the paragraph No.14 wherein discussed with regard to though registration of the sale deed is prima facie proof of the intention of the parties to transfer the property, but it is not a proof of operative transfer. It all depends upon the facts and circumstances of each case to be considered by the Court with reference to the recitals in the document and as well as the pleadings of the parties and also their stand taken at the time of the sale transaction and subsequently. When there is no such recitals or proof with regard to delivery of possession, payment of consideration, etc, in such an eventuality, the plea of the plaintiff that, the possession over the property is given tentatively, cannot be taken into consideration for the purpose of restraining the defendants from enjoying the

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property as if owners. The counsel also brought to notice of this Court paragraph No.15 wherein an observation is made that on the another hand, when there is no prima facie case made out by the plaintiff showing that as on the date of the sale deed, entire consideration amount was paid and possession of the property was taken over and that operation of transfer has been completed as per the intention of the parties.

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The counsel relied upon the judgment reported in (2012) 9 Supreme Court Cases 496 in case of Benarsi Krishna Committee wherein held that party to arbitration proceedings, held, does not include agent or advocate represented party in arbitration proceedings, “party to arbitration” proceedings means only party itself but not its agent, nor advocate empowered to act on basis of Vakalathnama, Hence, limitation of three months under Section 34(3) is to be reckoned from date on which party itself received award and not its advocate or agent.

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The counsel also relied upon the judgment of the

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Apex Court (2021) 7 SCC 657 in case of Daksha Haryana Bijli Vitran Nigam Limited V/s Navigant Technologies Private Limited wherein discussed with regard to scope of Section 34, 29-A, 31, 32, 33 and 36 and also discussed with regard to the limitation is concerned. The counsel referring these judgments would vehemently contend that these judgments are aptly applicable to the case on hand and also the case relied upon by the counsel appearing for the appellant that Dahiben’s case is not applicable facts of the case on hand. Hence, it does not require any interference. The Trial Court has taken note of the material on record and also taken note of card played by the appellant in transferring the amount to his account two days prior to the document came into existence and all these factors have to be taken note of and the relief of temporary injunction is granted and the Trial Court rightly

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rejected the application filed by the defendant under Order 39 Rule 4 of CPC and does not requires any interference.

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Having heard the appellant’s counsel and also the counsel appearing for the respondent and also the principles laid down in the judgments referred supra, this Court has to examine whether the Trial Court has committed an error in granting temporary injunction not to interfere with possession as well as not to encumber and create any third party right. It is not in dispute that earlier they were partners. It is also not in dispute that suit schedule property was purchased by the plaintiff firm registered as per the partnership deed dated 27.01.2007 consisting of three partners including the defendant. It is also important to note that the said partners have agreed to develop the suit schedule property and share profit and loss in the ratio provided in terms of the document and also not in dispute that defendant was a sole signatory and he was having exclusive control of the bank accounts of the firm,

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the same is also not disputed by the defendant also in the

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pleadings. It is also the case of the plaintiff that during the course of the business of the partners of the plaintiff’s firm and the defendant contributed the funds to the firm to M/s Integrated Constructions to mere the defendant and plaintiff, being one of the partners, the said funds received are received for the said firm was considered investment to the plaintiff’s firm. Having taken note of the said material on record, it is also the case of the plaintiff that the defendant has expressed his desire to retire from the partnership. The defendant also not disputes the fact that he had expressed his desire to retire from the partnership firm. It is also clear in the pleadings of the parties that the defendant expressed that he will not participate in the daily affairs, but requested to register two apartments in favour of him. In lieu of contributions and additional amount of Rs.12,26,59,601/- payable by him for registration of sale deed and also for construction agreements. The material

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discloses that accordingly the documents came into existence and the defendant went out from the firm. But it is the specific case of the plaintiff that amount of Rs.12,26,59,601/- was illegally transferred from firm’s account to the defendant’s firm M/s Jindal without the knowledge of partners of plaintiff’s firm and misrepresenting to him and other partner that defendant shall relinquish his contribution in lieu of 2 apartment conveyed. The defendant had taken advantage of the sole signatory since he was the only sole signatory and before his exit, he illegally transferred fund of Rs.12,26,59,601/-. It is also the specific case of the plaintiff that document also produced before the Court to substantiate the same and no consideration has been passed. On the other hand, it is the contention of the defendant that they filed suit only for recovery of money and not filed a suit for bare injunction and the bare injunction suit is not maintainable, but it is contended that he contributed funds of Rs.3,67,38,841.20/-

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to the plaintiff’s firm through his share in M/s Integrated constructions on 31.03.2008, but he contended that additionally sum of Rs.12,26,59,601/- was transferred by the defendant to the plaintiff. Admittedly, on 22.07.2013, thus in lieu of investment of Rs.16,09,04,806/- by the defendant a settlement was arrived at between the parties vide the settlement deed dated 24.07.2023, whereby the defendant agreed to retire as a partner in a plaintiff firm. The main contention of the plaintiff also that in an ingenious method the defendant illegally transferred the said amount two days prior to the registration of those documents and the plaintiff was kept in dark. No such consideration has been passed.

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It is also the contention that though agreed to give two apartment, construction is incomplete as per the contention of the appellant and photos are also produced before the Court. It is the contention that no injunction can be granted without seeking any relief of declaration and

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relying upon the judgments referred supra as contended by the counsel appearing for the appellant. The counsel appearing for the respondent also relied upon the recent judgment of the Apex Court i.e., in Kewal Krishan’s case which is also referred by the Trial Court. The Apex Court also in paragraph No.15 taken note of Section 54 of Transfer of Property Act and also discussed in detail and held that it is of no legal effect, the sale consideration has not been passed and such sale will be void. It will not effect the transfer of the immovable property and also further held that it was necessary for the appellant to specifically claim a declaration as regards the sale deeds by way of amendment to the plaint. Further held that the document which is void need not be challenged by claiming a declaration as the said plea can be set up and proved in collateral proceedings. This judgment was also taken note of by the Trial Court while passing the impugned order. No doubt the counsel appearing for the appellant would

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vehemently contend by relying upon the judgment of Dahiben’s case of the year 2020 wherein held that the remedy only lies in law of recovery. But in the case on hand, the specific contention is that two days prior to entering into the document of sale deed, the said amount was illegally transferred to his account as the defendant is the sole signatory to maintain the account and fraud has been alleged and contend that sale consideration has not been passed. When such being the case, the very contention of the counsel that the Dahiben’s case will applicable to the case cannot be accepted. No doubt even the consideration could be paid in future date also, the same is not the case. Here is a case of a fraudulent act on the part of the defendant and not disputes the fact that he did not re-transfer the amount illegally to the account of the defendant. When such material available on record, Court has to look into the material on record while passing the discretionary relief of temporary injunction and there must

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be a material on record that the sale consideration has been paid. In other judgments Apex Court held that in the absence of sale consideration, there cannot be any sale. This Court also in the judgments referred supra, held that if sale consideration has not been paid and also Court has to take note of intention of the parties. In the case on hand also the intention of the parties is also when the defendant expressed his desire to go out from the partnership and settlement was arrived between the parties. The very said settlement has taken place in a circumstances of fraudulent act as alleged in the plaint. When such material available on record, the Trial Court has taken note of the said fact into consideration while granting the relief of temporary injunction. Hence, I do not find any error committed by the Trial Court in exercising its discretion. Hence, there is no any merit in the appeal to reverse the finding of the Trial Court.

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