Allowed

M/S Esteem Xen Shelters Private Limited v. Annayappa T

Karnataka HC21 Sept 2024MFA/4595/2021

Case brief

AI extract

What is this about?

Defendant No.2 appealed the trial court's temporary injunction restraining alienation of suit land purchased via a GPA sale. The High Court found plaintiffs non-vigilant despite dishonoured cheques since 2014, held balance of convenience favoured defendant No.2, and set aside the injunction order.

What did the court decide?

Trial court's I.A.No.1 injunction order set aside; defendant No.2's I.A.No.8 allowed, freeing defendant No.2 to alienate the suit schedule property.

M/S Esteem Xen Shelters Private Limited Vs Annayappa T — Property and Title | Karnataka HC (2024)

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NC: 2024:KHC:39134 MFA No. 4595 of 2021

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 21^ST DAY OF SEPTEMBER, 2024

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BEFORE

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THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI MISCELLANEOUS FIRST APPEAL NO.4595 OF 2021 (CPC)

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BETWEEN:

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M/S. ESTEEM XEN SHELTERS PRIVATE LIMITED A COMPANY INCORPORATED UNDER COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT NO.33, SNS CHAMBERS, 3^RD FLOOR, NO.239, SANKEY ROAD, SADASHIVANAGAR, BANGALORE-560 080.

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Digitally signed by SUVARNA T Location: HIGH COURT OF KARNATAKA

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REPRESENTED BY ITS DIECTOR: MR. GAURAV AHUJA, (WHICH WAS EARLIER KNOWN AS M/S. SARASWATI ENTERPRISES), A REGISTERED PARTNERHSIP FIRM, HAVING ITS OFFICE AT: NO.32, 33 AND 34, SNS CHAMBERS, 3^RD FLOOR, 239 SANKEY ROAD, SADASHIVANAGAR, BANGALORE - 560 080.

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(BY SRI. AJAY SHANKAR RAO, ADVOCATE)

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AND:

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…APPELLANT

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MR. T. ANNAYAPPA, S/O. LATE THIMMAIAH, AGED ABOUT 60 YEARS,

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MRS. NAGAMANI, D/O. OF MR. T. ANNAYAPPA, AGED ABOUT 35 YEARS,

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MRS. USHA, D/O. MR. T. ANNAYAPPA, AGED ABOUT 33 YEARS,

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MR. SHIVAKUMAR, S/O. MR. T. ANNAYAPPA, AGED ABOUT 30 YEARS,

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MRS. SAROJAMMA, W/O. LATE MR. THIMMAIAH, AGED ABOUT 80 YEARS,

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MRS. GOWRAMMA, D/O. LATE MR. THIMMAIAH, AGED ABOUT 40 YEARS,

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MR. MADHU, S/O. MR. G. NAGARAJ, AGED ABOUT 25 YEARS,

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MR. N. SHREENATH, S/O. MR. G. NAGARAJ, AGED ABOUT 21 YEARS,

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ALL THE ABOVE R1 TO 8 ARE RESIDING AT MUTHUGADAHALLI VILLAGE, JALA HOBLI, BANGALORE NORTH TALUK.

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MR. A. CHANDRASHEKAR, S/O. LATE MR. ASHWATHANARAYANA, AGED ABOUT 50 YEARS, RESIDING AT ANESHWARA VILLAGE, KASABA HOBLI, DEVANAHALLI TALUK.

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…RESPONDENTS

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(BY SRI. NATARAJU B. HALEMANE, ADVOCATE FOR R1; VIDE ORDER DATED 11.11.2021 NOTICE TO R9 D/W; NOTICE TO R4 TO 8 SERVED AND UNREPRESENTED; V/O/D:18.09.2024 NOTICE TO R2 AND R3 IS HELD SUFFICIENT)

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THIS MFA IS FILED UNDER ORDER 43 RULE 1(r) OF CPC,1908 AGAINST THE ORDER DATED 02.11.2020 PASSED ON I.A.NO.1 IN O.S.NO.615/2016 ON THE FILE OF THE SENIOR CIVIL JUDGE AND J.M.F.C., DEVANAHALLI, ALLOWING I.A.NO.1 FILED UNDER ORDER 39 RULE 1 AND 2 AND DEFENDANT NO.2 IS HEREBY RESTRAINED BY AN ORDER OF TEMPORARY INJUNCTION FROM ALIENATING THE SUIT SCHEDULE PROPERTY TILL DISPOSAL OF THE SUIT AND ETC.

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THIS APPEAL, COMING ON FOR AMDISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI

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ORAL JUDGMENT

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Aggrieved by the order passed in I.A.Nos.1 and 8 in O.S. No.615/2016 dated 02.11.2020 by the Senior Civil Judge and JMFC., Devanahalli, defendant No.2 is before this Court.

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The respondents herein are the plaintiffs. The suit is filed seeking a declaration that the sale deed dated 16.04.2016 executed by defendant No.1 in favour of defendant No.2 is void, for cancellation of the agreement of sale dated 02.04.2016 executed by the plaintiffs in favour of defendant No.1 is void, for cancellation of the General Power of Attorney dated 02.04.2014 executed by the plaintiffs in favour of defendant No.1 as void. It is the case of the plaintiffs that the suit schedule property belongs to the plaintiffs. They have entered into a registered agreement of sale on 02.04.2014 with defendant No.1 for a sale consideration of an amount of Rs.22,75,000/-. On the same day, the plaintiffs have also executed a registered General Power of Attorney in favour of defendant No.1 to look after the property. It is the case of the

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plaintiffs that out of the consideration paid under the agreement, only one cheque for a sum of Rs.7,50,000/bearing cheque No.021411 came to be honoured and the other two cheques bearing Nos.021412 and 021413 dated 02.07.2014 and 02.08.2024 came to be dishonoured for the reasons “Funds insufficient”. It is the case of the plaintiffs that they have informed the same to defendant No.1 and defendant No.1 promised to pay the amount. The plaintiffs were waiting for order of conversion of the lands, but defendant No.1 after obtaining the conversion order dated 30.07.2015 did not inform or communicate the same to the plaintiffs. Defendant No.1 without fulfilling his obligation under the agreement of sale has illegally and unlawfully sold the property to defendant No.2 for a sale consideration of an amount of Rs.48,56,000/- by a registered sale deed dated 16.04.2016. It is the case of the plaintiff that without paying the sale consideration, defendant No.1 had sold the property and under the GPA, defendant No.1 did not have the power to sell the property in favour of defendant No.2, further despite the knowledge of dishonor of the cheques, defendant No.1 has neglected and failed to repay

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the amount. Hence, the plaintiffs have filed the suit seeking the relief as observed above.

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The defendant No.1 was set exparte and defendant No.2 had filed his detailed written statement. It is the case of defendant No.2 that on the date of execution of the sale deed by defendant No.1 in favour of defendant No.2, the registered GPA was valid, subsisting and admittedly not revoked. The GPA was executed authorizing defendant No.1 to sell, alienate and encumber the suit schedule property. Hence, the plaintiffs cannot seek for cancellation of the agreement and GPA. The remedy of the plaintiffs is to seek for recovery of the amount that is allegedly due to him from defendant No.1 under the agreement of sale and the suit itself is not maintainable. It is stated that there is no prayer for injunction and thus, the suit is liable to be dismissed. They kept quite till the sale deed is executed on 16.04.2016 and defendant No.2 is put in possession of the property and defendant No.2 has also got the name mutated in the revenue records and had sought for dismissal of the suit.

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NC: 2024:KHC:39134 MFA No. 4595 of 2021

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The Trial Court initially had granted injunction restraining defendant No.2 from alienating the suit schedule property. I.A.No.8 is filed to vacate the said order. That application came to be dismissed and the injunction that is granted by way of I.A.No.1 is made absolute. While dismissing I.A.No.8, the Trial Court observed that in the registered sale agreement dated 02.04.2014 the consideration has been reflected to have been passed through cheques bearing Nos.021411, 021412 and 021413 drawn on Bank of India. The dishonoured cheques produced by the plaintiffs, the cheques numbers are same as mentioned in the agreement of sale dated 02.04.2014. The Trial Court had further observed that the GPA executed by the plaintiffs in favour of defendant No.1 is coupled with interest under the agreement of sale. Once defendant No.2 had knowledge of the agreement of sale, it is necessary for defendant No.2 to confirm with realization of the cheques mentioned therein. It is prima facie clear that the entire consideration under the agreement of sale or sale deed has not been passed on to the plaintiffs. Hence, it is necessary to restrain defendant No.2 from alienating the suit schedule property to avoid multiplicity of proceedings. The Trial Court

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observed that the rival contentions have to be decided in a full fledged trial, at this stage the plaintiffs have made out prima facie case and balance of convenience. The grant of temporary injunction is an equitable relief and the same can be granted in favour of the plaintiffs and accordingly, I.A.No.8 is dismissed and injunction is made absolute till the disposal of the suit.

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Learned counsel appearing for the appellant/defendant No.2, who is the purchaser of the property submits that when the agreement of sale and registered GPA are dated 02.04.2014, according to them, when the cheques were dishonoured, they have not taken any steps till 26.08.2016. It is submitted that as per the registered GPA, defendant No.1 has the right to sell the property. Looking at the said GPA, the property was purchased by defendant No.2. It is submitted that while looking at the prima facie case, as the cheques are dishonoured, it cannot be considered as a prima facie case. Learned counsel submits that the Trial Court had failed to consider that right from the year 2014 till the year 2016, for a period of two years nothing has been done by the plaintiffs and this aspect was never considered by the Trial Court. He submits that in fact, when the relief of injunction is sought, the burden

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lies on the plaintiff. It is submitted that without considering all these aspects, the Trial Court had granted injunction and the same has to be set aside.

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Learned counsel appearing for the respondents/ plaintiffs submits that the dishonoured cheques clearly shows that the consideration was not passed on to the plaintiffs and they have filed the suit. Unless and until an injunction is granted, if the property is alienated pending suit, the relief that is sought by the plaintiff will be frustrated and the Trial Court had rightly granted the injunction restraining the defendant from alienating the property. It is submitted that he is the owner of the property and defendant No.1 without even paying the amount had transferred the land in favour of defendant No.2 by executing a sale deed and they have committed fraud on the plaintiffs. It is submitted that even the conversion of the land was not brought to the notice of the plaintiff and he submits that the Trial Court considering all these facts had passed a reasonable order and no interference is called for.

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Having heard the learned counsels on either side, perused the material placed on record. The contention of the

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plaintiff is that there is an agreement of sale and a registered GPA which gives power to the defendant No.1 to alienate the property dated 02.04.2014. According to him, while executing the said agreement three cheques were given. The consideration was Rs.22,75,000/-. Only one cheque is honoured that is an amount of Rs.7,00,000/- and odd and the remaining two cheques were dishonoured and they have been requesting defendant No.1 to pay the said amount and without information to them the conversion was done and sale deed is executed. Then they have come up with the suit and also an injunction restraining defendant No.2 from alienating the property. This Court had perused the order. When the cheques are dishonoured in the year 2014, 3 months is the life of the cheque. Why the defendant had not done anything from the year 2014 till 2016 nothing is forthcoming, that too when they are aware that by virtue of the said GPA, the defendant has a right to alienate the property. They have not even issued any notice nor any complaint is filed under Section 138 of the NI Act. The plaintiff is not vigilant and came to the Court after a long time that too after the third party rights have occurred. Just because he is the owner of the property and defendant

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No.1 had not paid the amount that itself would not be a ground for the Court to come to a finding that there is a prima facie case and balance of convenience lies in favour of the plaintiffs. In the facts and circumstances of this case, the balance of convenience in fact lies in favour of defendant No.2 and the Courts cannot come to the rescue of the litigant, who do not come to the Court at appropriate point of time and who is not vigilant. In that view of the matter, this Court is passing the following:

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ORDER

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i. Accordingly, the appeal is allowed by setting

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aside the order passed in I.A.No.1 in O.S. No.615/2016 dated 02.11.2020 by the Senior Civil Judge and JMFC., Devanahalli and consequently, I.A.No.8 filed by defendant No.2 is allowed.

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ii. All I.As., in the appeal, shall stand closed.

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SD/(LALITHA KANNEGANTI) JUDGE

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BN List No.: 1 Sl No.: 6

M/S Esteem Xen Shelters Private Limited v. Annayappa T

Case brief

What is this about?

What did the court decide?

M/S Esteem Xen Shelters Private Limited v. Annayappa T

Case brief

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