M/S Garudadhri Developers Vs Mr. N.R Nagendra

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 14^TH DAY OF MARCH, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE K. NATARAJAN MISCELLANEOUS FIRST APPEAL NO.3846 OF 2023

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BETWEEN:

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M/S GARUDADHRI DEVELOPERS, A REGISTERED PARTNERSHIP FIRM, UNDER SECTION 58(1) OF PARTNERSHIP ACT 1932, HAVING ITS OFFICE AT VYNATHEYADHAMA, 5TH CROSS, BHARATH GAJARIA LAYOUT ROAD, SUBHASH NAGAR, NELAMANGALA TOWN-562123 REPRESENTED BY ITS MANAGING PARTNER SRI M. G. RANGADHAMAIAH, AGED ABOUT 56 YEARS, S/O LATE C. GANGAIAH

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...APPELLANT

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(BY SRI. SAMPATH A., ADVOCATE)

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AND

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1 . MR. N.R. NAGENDRA, S/O LATE V. M. RANGAIAH, AGED ABOUT 45 YEARS, R/AT MARUTHI NAGAR, WEAVERS COLONY, SUBHASH NAGAR, NELAMANGALA TOWN-562123

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2 . SMT. LAKSHMAMMA, AGED ABOUT 86 YEARS, W/O HONNAGANGAIAH, R/AT C/O PUTTAGANGAIAH, NO.341, PAWAR NIVAS, 1^ST FLOOR, 13^TH CROSS, 1^ST PHASE, GOKULAR MATHIKERE, BENGALURU-560054.

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3 . SMT. KEMPAMMA, AGED ABOUT 75 YEARS, W/O LATE GANGAPPA, R/AT KUDUR VILLAGE, SOLURU HOBLI, MAGADI TALUK-562120

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4 . SMT. SHARADAMMA, AGED ABOUT 71 YEARS W/O LATE CHIKKAMAGADAIAH, R/AT DODDACHANNOHALLI VILLAGE, THYAMAGONDLU HOBLI, NELAMANGALA TALUK-562123.

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5 . SMT. SAROJAMMA, AGED ABOUT 63 YEARS W/O PUTTAGANGAIAH, R/AT AKSHYANAGARA 4^TH MAIN, HORAMAVU, BANNERGHATTA ROAD, BENGALURU EAST TALUK-560083

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6 . SMT. SAVITHRAMMA, AGED ABOUT 65 YEARS W/O LATE GOVINDARAJU, R/AT SADASHIVANAGAR BEHIND PAVITHRA PARADISE BENGALURU-560080.

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…..RESPONDENTS

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(BY SRI. KALYAN R., ADVOCATE FOR R1; NOTICE TO R2 TO R6 IS DISPENSED WITH V/O DATED 10.07.2023)

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THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER ORDER 43 RULE 1(R) OF CPC, PRAYING TO CALL FOR RECORDS IN OS NO. 1024/2022 ON THE FILE OF 1^ST ADDITIONAL SENIOR CIVIL JUDGE AND JMFC AT NELAMANGALA. [ADDL. SENIOR CIVIL JUDGE NELAMANGALA], AND TO SET ASIDE THE ORDER DATED 06.04.2023 ON IA. NO.1 IN OS NO.1024/2022 PASSED BY THE LEARNED 1^ST ADDITIONAL SENIOR CIVIL JUDGE AND JMFC AT NELAMANGALA [ADDL. SENIOR CIVIL JUDGE AT NELAMANGALA] AND CONSEQUENTLY, ALLOW THE IA NO.1 RESTRAINING THE RESPONDENT NO.1 FROM ALIENATING THE SUBJECT PROPERTY, PENDING DISPOSAL OF THE SUIT, AS PRAYED FOR, SO AS TO MEET THE ENDS OF JUSTICE AND EQUITY.

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THIS MFA HAVING BEEN RESERVED FOR JUDGMENT ON 25.02.2025, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

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RESERVED FOR ORDERS ON: 25.02.2025

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PRONOUNCED ON : 14.03.2025

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CORAM: HON'BLE MR. JUSTICE K.NATARAJAN

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CAV JUDGMENT

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This appeal is filed by the appellant/plaintiff under Order 43 Rule 1 (r) of CPC for setting aside the order dated 06.04.2023 passed by the I-Additional Senior Civil Judge and JMFC, Nelamangala in O.S.No.1024/2022 for having rejected the application filed under Order 39 Rule 1 and 2 of CPC.

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Heard the arguments of the learned counsel for the appellant and the learned counsel for the respondents.

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The appellant was the plaintiff and respondents were the defendants in the Trial Court. The parties are referred as per their rank before the Trial Court for the sake of convenience.

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The case of the plaintiff before the Trial Court is that the plaintiff has filed the suit for recovery of Rs.4,25,00,000/-

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from the defendants with 12% interest contending that the defendant No.1 who is an Advocate by profession entered into an agreement of sale in respect of land in Sy.No.40/1 new Sy.No.40/3 measuring 2 acre 39 guntas situated at Mallarabanavadi village, Kasaba Hobli, Nelamangala taluk with defendant No.2. It is alleged that defendant No.2 filed suit against the defendant No.1 as there was an agreement of sale between them. Therefore, the plaintiff paid Rs.4,00,00,000/- to the members of the family of defendant No.2, in turn defendant No.2 paid money to defendant No.1 and got compromised in O.S.No.345/2010 and after the compromise defendant No.1 undertook to execute the sale deed but he has not executed the sale deed in his favour since a suit in O.S.No.1084/2009 filed by Jayamma was pending before the court. The plaintiff paid huge amount to defendant No.1 and plaintiff paid amount to the defendant No.2 and family members on various dates which was referred in the plaint. Inspite of same, they are avoiding for execution of sale deed. The said O.S.No.1084/2009 also came to be compromised and Rs.80,00,000/- was paid by the plaintiff to

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the defendant No.1 to be payable to the defendant No.2 and an execution also filed by the defendant No.1 in Ex.No.13/2013 to obtain the sale deed in terms of compromise. The plaintiff also filed an application which came to be dismissed. Hence, the plaintiff filed the suit for recovery of money paid by him against both defendant Nos.1 and 2 and others.

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Plaintiff also filed an I.A.No.1 under Order 39 Rule 1 and 2 CPC seeking attachment of the property belongs to the defendants and that property should be protected from alienation otherwise it is difficult for the plaintiff to recover the money. Hence, he has filed application for restraining the defendants from alienating the property in Sy.No.40/3.

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The defendants appeared and filed objection apart from written statement and application came to be rejected. Hence, the plaintiff is before this court.

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The learned counsel for the plaintiff argued by contending that the Trial Court rejected the application mainly on the ground that the said property is not subject matter of the suit, it is only money recovery suit, therefore, no injunction can be

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granted against the said property, which is not correct, as per Order 39 Rule 1(b) CPC the property of the defendant can be attached by the Court pending consideration of money recovery suit. Such being the case, the order of the Trial Court is erroneous and liable to be set aside. The learned counsel also contended that there was an agreement of sale between defendant Nos.1 and 2 where defendant No.2 agreed to sell the property to defendant No.1 and a suit was filed by defendant No.1 based upon agreement of sale. In the meanwhile, defendant No.1 introduced the plaintiff as assignee. The plaintiff paid the money to defendant No.2 and got compromised the case and one more suit was filed by Jayamma and others in O.S.No.1084/2009. In the said suit, the plaintiff paid huge money and the said case was also compromised. The compromise application also reveals the amount paid by the plaintiff to defendant No.2 on behalf of defendant No.1. Such being the case, plaintiff made out a prima facie case for attaching the property and not to alienate the suit property though it is not the subject matter of the suit. The plaintiff is a company involved in real estate business and paid huge money more than Rs.4 crores and the same is not able to

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be recovered if the property is not attached. Hence, prayed to allow the appeal.

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Per contra , the respondents/defendants’ counsel objected the appeal contending that the application under Order 39 Rule 1 and 2 CPC is not maintainable. The plaintiff is a real estate businessman and the amount said to be paid long back, whereas the suit came to be filed very recently in 2022. The suit is barred by limitation. Even otherwise, if at all the plaintiff makes out a prima facie case, he could have filed application under Order 38 Rule 5 of CPC for attachment before judgment but that is not done. Therefore, the Trial Court, considering the same, rightly rejected the application which does not call for any interference. Hence, prayed for dismissal of the appeal.

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Having heard the arguments of the learned counsel for

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the parties and perused the records, the points that arise for my consideration are:

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(i) Whether the plaintiff has made out prima-facie case in his favour.?

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(ii) Whether balance of convenience lies in his favour.?

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(iii) The plaintiff will put irreparable loss, if injunction is not granted.?

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(iv) Whether the order of the Trial Court call for interference.?

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The learned counsel for the appellant has vehemently contended that there was dispute between the defendants No.1 and 2 in respect of agreement of sale. The defendant No.2 was the owner of the suit property and the defendant No.1 was an agreement holder. Hence, the defendant No.1 filed a suit for specific performance of contract. The same was settled between the defendants No.1 and 2. The defendant No.1 has paid amount to defendant No.2 towards the sale consideration, but the entire amount was paid by the plaintiff on behalf of the defendant No.1 to defendant No.2. The plaintiff also contended that the family members of the defendant No.2 also filed a suit for partition. Once again there was settlement between the defendant No.2 with the plaintiff in the said suit. The defendant No.2 paid the amount to them, for which the plaintiff made payment to them on behalf of defendant No.2. He also contended that the amount paid by the plaintiff has been shown as payment made to defendant No.2 and the family members of the defendant No.2. There was an

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agreement of sale between the plaintiff and the defendant No.1. There was some dispute in respect of the said property. Therefore, he has filed a suit for recovery of Rs.4,25,00,000/from the defendants. The defendants trying to alienate the property, in which the plaintiff able to recover the amount. Though, the property was schedule property in the suit, but to protect his interest, the plaintiff can seek injunction against the property owned by the defendants under Order 39 Rule 1 (b) of CPC.

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In support of his arguments, the learned counsel for the appellant has produced a copy of the plaint in O.S.No.1084/2009, where the respondent No.2 – Smt. Lakshmamma was the defendant No.11. The suit filed by one Smt. Jayamma for declaration, partition and separate possession and the sale deed dated 14.03.2007 executed by the respondent No.2 – Smt. Lakshmamma was null and void and not binding on her. The said suit property was Sy.No.40/1 measuring 06 acres. The said suit was ended in compromise, where an amount of Rs.80,00,000/- said to be given to the plaintiff – Smt. Jayamma vide D.D.No.443571 and the said D.D. obtained by the plaintiff in

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the name of Garudadhri Developers, which goes to show that on behalf of the defendant No.2 and plaintiff has paid Rs.80,00,000/to the plaintiff in O.S.No.1084/2009 to one Smt. Jayamma on behalf of defendant No.11 and the suit was got compromise in respect of the said property Sy.No.40/1 along with Sy.No.34.

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The another document, agreement of sale between the plaintiff and defendant No.1 i.e., 13.12.2021 for the purpose of purchase of same property Sy.No.40/1 where an amount of Rs.50,00,000/- said to be paid by the plaintiff and there is reference available in the agreement of sale a D.D. for Rs.2,50,000/- paid by the plaintiff. The copy of the pay order also produced herein. The said amount has been received by defendant No.1 – Mr. N. R. Nagendra as per the bank account extract. Another document produced by the plaintiff in a suit between the Smt. Jayamma and defendant No.11 and others an amount has been paid by the plaintiff to the Garudadhri Developers for Rs.80,00,000/- for settlement. This document prima-facie goes to show that the plaintiff has paid Rs.80,00,000/- on behalf of defendant No.2 to Smt. Jayamma in

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O.S.No.1084/2009 for retaining the suit schedule property. The amount of Rs.2,50,000/- each has been given to one Kempamma, Savitramma, Sorajamma and Sharadamma, for about Rs.2,50,000/- by D.D. to various family members of the defendant No.2. An agreement of sale dated 09.11.2022 produced, where the defendant No.1 settled some amount. Subsequently, it was settled by paying a huge amount on behalf of the defendant No.2 by the plaintiff.

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These documents prima-facie goes to show that the defendant No.1 entered with agreement of sale with plaintiff. Another settlement between defendant No.1 and defendant No.5 with Rs.45,00,000/- has been paid by the defendant No.2 to defendant No.1 in respect of Sy.No.40/3. The settlement of the said suit in O.S.No.345/2010, the plaintiff has paid huge amount to defendant No.2 on behalf of defendant No.1. The said amount was received by the defendant No.2 and she has settled the case

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between the defendant No.2 and one Smt. Jayamma in O.S.No.1084/2009. These documents clearly reveals that the

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plaintiff has made huge amount to defendant No.1 under the agreement of sale about Rs.45,00,000/-.

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All the documents produced by the plaintiff reveals that the plaintiff has paid huge amount to the defendants No.1 and 2 and also the relatives of the defendant No.2 and the defendants for settling her dispute between one Smt. Jayamma and the defendants. The defendants admitted in their written statement regarding receipt of money from the plaintiff. These documents prima-facie reveals that the amount paid by the plaintiff to the defendants. Whether the suit filed by the plaintiff for recovery of money is time barred or not that has to be considered by the Trial Court, after framing the appropriate issues.

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All the documents prima-facie shows that the copy of the D.D., compromise application, compromise decree and etc., reveals that crores of rupees paid by the plaintiff to the defendants. Therefore, he has filed a suit for recovery of money.

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The learned counsel for the defendants has contended

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that the plaintiff could have filed an application for attachment before the judgment (ABJ) in respect of the properties belongs to the defendants, but Sy.No.40/3 was a property where the plaintiff claimed not to alienate and most of the amount were paid by the plaintiff to the defendants in respect of land Sy.No.40/3.

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The Order 39 Rule 1 (b) of CPC reads as under :-

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a) xxxx

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b) That the defendant threatens, or intends, to remove or dispose of his property with a view to [defrauding] his creditors.

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As per the provision of Order 39 Rule 1 (b) of CPC, the plaintiff can ask the relief when the defendants are intention to remove or dispose his property with a view of defrauding his creditors. Therefore, though the said property is not a suit schedule property, the Court is having power to staying the defendants from alienating the property belong to the defendants. In this regard, the Division Bench of this Court in the case of Bank of Baroda vs. Dr. Bavaguthu Raghuram Shetty and

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another with connected matters reported in 2021 SCC OnLine KAR 12121 , at Paras No.10, 19 and 23 held as under:-

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“10. Thus, the relief of temporary injunction for preventing alienation of the other assets such as shares, mutual funds, monies deposited in bank accounts held by the first defendant as prayed in IA No. 1 was not granted. However, injunction as prayed for against second defendant in IA No. 2 was granted as prayer was only in respect of immoveable property described in suit schedule.

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19. Another Division Bench of Calcutta High Court in the case of Santosh Promoters Private Limited v. Intrasoft Technologies Limited dealt with the same issue. Paragraphs No. 21 to 23 of the said decision read thus;

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"21. Let us now consider the substance of such contention of the learned Counsel appearing for the parties. Even assuming that the principle relating to grant of Mareva injunction which was originated from the English Court is not applicable here but still then we cannot be oblivious of the provision contained in Order 39 Rule 1(b) of the Civil Procedure Code which authorizes the civil court to pass an order

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of temporary injunction for restraining the defendant from transferring any property which the defendant intends to transfer to defraud his creditors during the pendency of the suit for realization of money, even though the property in respect of which an order in the form of injunction is sought for, is not directly and/or indirectly Involved in the suit.

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“22. To understand the true implication of Order 39 Rule 1(b) of the Civil Procedure Code, it will be profitable for us to set out the said prevision hereunder which runs as follows:-“

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"Where in any suit it is proved by affidavit or otherwise that the defendant threatens, or intends to remove or dispose of his property with a view to defraud his creditor, the Court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property or dispossessing of the plaintiff or otherwise causing injury to the plaintiff in relation to

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any property in dispute in the suit as the Court thinks fit, until the disposal of the suit or until further orders".

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23. If we consider the provision contained in Order 39 Rule 1 of Civil Procedure Code as a whole which is the source of grant of temporary injunction then it appears to us that though passing of an order of temporary injunction is respect of non-suit property is not permissible under order 39 Rule 1(a) and 1(c) of the Civil Procedure Code but the Court's power to pass temporary injunction in respect of any property which is not the subject matter in dispute, is recognized under order 39 Rule 1(b) of the Civil Procedure Code and such power can be exercised only when the Court finds in a suit for realization of money, the defendant intends to transfer his properties to defraud his creditors.

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23. Now, we come back to the facts of the case in hand. In the plaint, specific performance of the Letter of Negative Lien has been sought. A permanent injunction was sought restraining the defendants from in any manner committing breach of the undertakings in the Negative Lien Letter. We have already quoted

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the prayers of interim relief made in I.A. Nos. I and II.”

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In the above said judgment, the Division Bench has categorically held that even the plaintiff can seek injunction against the defendants in respect of property owned by the defendants which is not required to be a suit scheduled property. A non-scheduled property also can be attached for seeking injunction by the plaintiff.

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In view of the same, I am of the view that the balance convenience lies in favour of the plaintiff. If the injunction is not granted against the said property, the defendants definitely alienate the property. Therefore, it is necessary for the plaintiff to protect the interest in recovery of money and he can maintain an application for not alienating the defendants’ property in Sy.No.40/3 as the plaintiff has invested the huge money. Therefore, irreparable loss would be caused to the plaintiff, if the injunction is not granted.

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21. The Trial Court had rejected the application mainly on

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the ground that it is not a suit property which cannot be sought

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relief, is not correct in view of Order 39 Rule 1 (b) and the judgment of the Division Bench of this Court in the case of Bank of Baroda . Therefore, the order of the Trial Court calls for interference. Hence, the following;

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O R D E R

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I. The appeal is allowed.

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II. The order dated 06.04.2023 passed on I.A.No.I in O.S.No.1024/2022 by the I Additional Senior Civil Judge and JMFC at Nelamangala, is set aside.

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III. Consequently, I.A.No.I is allowed. The defendants are restrained from creating any 3^rd party interest or alienate the land Sy.No.40/3 measuring 02 acres 39 guntas situated at Mallarabanavadi village, Kasaba Hobli, Nelamangala Taluka, until disposal of the suit.

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Sd/(K.NATARAJAN) JUDGE

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SWK/KJJ_CT:SI

M/S Garudadhri Developers v. Mr. N.R Nagendra

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M/S Garudadhri Developers v. Mr. N.R Nagendra

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