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2011 DIGILAW 637 (JK)

Khurshid Ahmad Fazili & Anr. v. State & Ors.

2011-11-17

MUZAFFAR HUSSAIN ATTAR

body2011
JUDGMENT Honble Mr. Justice Muzaffar Hussain Attar, Judge 1. A Civil Original Suit is filed by the plaintiffs (respondents 1&2 herein) against the defendants (appellants herein), which came to be amended with the prayer for issuance of decree of cancellation of sale deeds with further prayer for possession of suit property. It is also prayed that a decree for permanent injunction be also passed against the appellants defendants, directing them to pull down the structures raised on the suit land for effective and smooth handover of suit land to plaintiffs or in the alternative a decree for dissolution of partnership and rendition of accounts be passed in favour of the parties after the Hon'ble Court holds the capital investment raised through transfer of land as an investment in the partnership. 2. Alongside the suit, the plaintiffs also filed an application praying therein that pending disposal of the suit, the appellants defendants 1&2 be restrained from alienating or parting with the subject matter of the suit. 3. After hearing the learned counsel for the parties, the learned trial Judge, vide its order dated 20-12-2004 observed as under : For all the foregoing reasons I am of the opinion that prima facie case for grant of the relief of injunction or any other interim relief is not disclosed. The only relief that can be considered and granted by this Court at this stage of the case is under Section 52 Transfer of Property Act to the effect that the defendants/non applicants shall not alienate the land in question till the lis is pending 4. The appellants ' defendants, being aggrieved of the said direction of the learned trial Judge have filed this appeal. 5. Heard learned counsel for the parties. Considered the matter. 6. Mr. Qureshi, learned counsel for the appellants, submitted that the learned trial Judge recorded the findings that there is no prima facie case in favour of the plaintiffs and that balance of convenience is not in their favour and they will not suffer any irreparable loss in case the reliefs sought for are not granted, but the learned trial Judge, ultimately, directed the appellants not to alienate the land in question till the lis is pending in view of the mandate contained in Section 52 of the Transfer of Property Act 1977. Mr. Mr. Qureshi further submitted that a valid sale transaction has taken place between the appellants and plaintiffs and the consideration amount has been paid to the plaintiffs and possession of the property was also handed over to the appellants. He further submitted that the appellants, in order to utilize the land for commercial purposes, obtained financial assistance from a Scheduled Bank for raising constructions on the suit land with a view to sell those constructions. It is further submitted that the constructions are being raised but in view of the order of the learned trial Judge, the appellants have been restrained from alienating the suit property, thus, the very purpose for which the suit property was purchased, would stand defeated. Mr. Qureshi also submitted that after recording prima facie findings by the learned trial Judge that the plaintiffs have no prima facie case and that balance of convenience is not in their favour and they will not suffer any irreparable loss, the appellants could not have been, in law, restrained from alienating the land in question. Learned counsel, accordingly, prayed for setting aside the operative part of the impugned order. 7. Mr. M.Sultan, learned counsel for the respondents 1&2, submitted that the appeal is not maintainable, in as much as, what is reiterated in the impugned order, is the mandate contained in Section 52 of the Transfer of Property Act 1977. He further submitted that on the material available before the learned trial Judge and in view of its own findings recorded in the impugned order, a case for grant of injunction is made in favour of the plaintiffs - respondents and against the appellants. It is further submitted that since the matter is being heard in appeal, this Court may re-appreciate the issues raised and record findings that the plaintiffs - respondents have prima facie case and that balance of convenience is in their favour and they will suffer irreparable loss in case relief, sought in the temporary injunction application, is not granted. Mr. It is further submitted that since the matter is being heard in appeal, this Court may re-appreciate the issues raised and record findings that the plaintiffs - respondents have prima facie case and that balance of convenience is in their favour and they will suffer irreparable loss in case relief, sought in the temporary injunction application, is not granted. Mr. Sultan referred to one of the observations made by the learned trial Judge in the impugned order wherein the learned trial Judge had said that the issues require to be considered during the trial of the case, which expression, used by the learned trial Judge in the impugned order, in the wisdom of the learned counsel for the respondents, would mean that when the case for trial is made out then it can be safely said that prima facie case exists in favour of the plaintiffs. He further submitted that the appellants have duped the plaintiffs, in as much as, there was an oral agreement between the parties wherein it was agreed upon that the plaintiffs and appellants would launch a Joint Venture of raising constructions of flats/residential houses, which would, thereafter, be sold and the sale proceeds would be appropriated on 50% basis by the parties. He further submitted that the plaintiffs were to give their landed property as their share in the Joint Venture and the appellants were to raise the constructions by raising finances. He further submitted that it is for this reason that sale deeds were executed in favour of the appellants but when they refused to reduce the terms and conditions of the agreement into writing, the plaintiffs sensed that they have been duped and fraud has been practiced upon them. It is for this reason that the suit is filed in which the learned trial Judge passed the order which is impugned by medium of this appeal. 8. Question raised about the maintainability of appeal requires to be answered in the first instance. An application, under Order 39 rule 1&2 CPC, was filed by the plaintiffs in which they prayed that the defendants 1&2 appellants herein, be restrained from alienating the suit property. The learned trial Court, while deciding the application, considered the three cardinal principles of law, viz. existence of prima facie case, balance of convenience and irreparable loss. An application, under Order 39 rule 1&2 CPC, was filed by the plaintiffs in which they prayed that the defendants 1&2 appellants herein, be restrained from alienating the suit property. The learned trial Court, while deciding the application, considered the three cardinal principles of law, viz. existence of prima facie case, balance of convenience and irreparable loss. The learned trial Court recorded findings for prima facie purposes that these three cardinal principles of law are not in favour of the plaintiffs. However, in view of the mandate contained in section 52 of the Transfer of Property Act 1977, the learned trial Judge directed the appellants not to alienate the land in question till the lis is pending. Section 52 of the Transfer of Property Act 1977, by its own operation, protects the rights of the parties, who are litigating in a civil suit in respect of immoveable property but when a direction is issued in an injunction application, then it becomes an order passed under Order 39 rule 1&2 CPC which, in terms of Order 43 CPC is an appealable order. The appeal is, thus, held to be maintainable and the objection about its maintainability fails. 9. Before considering the arguments raised at the bar by learned counsel for theparties, it would be appropriate to give a few facts of the case. 10. The plaintiffs instituted the Civil Original Suit which was, subsequently, permittedto be amended, wherein the following reliefs are sought : a. That a decree for cancellation of sale deed executed by plaintiff NO.1 in favour of defendants on 1.1.2000 and registered on 17.1.2000 by Sub Registrar Chadoora and sale deed executed by plaintiff No.2 dated 22.3.2001 registered by Sub Registrar Magam be passed in favour of plaintiffs and against the defendants as the same have been obtained under undue influence, fraud and deceit. b. That a decree for possession of land be also passed in favour of the plaintiffs and against the defendants after pulling down the structures. b. That a decree for possession of land be also passed in favour of the plaintiffs and against the defendants after pulling down the structures. c. That a decree for mandatory injunction be also passed directing the defendants to pull down the structures raised on the suit land for effective and smooth handover of suit land to plaintiffs or in the alternative a decree for dissolution of partnership and rendition of accounts be passed in favour of the parties after the Hon'ble Court holds the capital investment raised through transfer of land as an investment in the partnership. 11. The reliefs sought for are based on the averments made in the plaint to the effect that the plaintiffs and appellants had entered into an oral agreement of launching a Joint Venture of constructing flats/residential houses and after their sale, the sale proceeds would be appropriated by the parties on 50% basis. The pleadings in the plaint also reveal that in order to effectuate the oral agreement, the plaintiffs agreed to give landed property and the appellants were to raise the construction on the said property. It is also pleaded that when the efforts, to reduce the terms and conditions of the agreement into writing, failed, a cause accrued to the plaintiffs for filing of the suit. Paragraphs 3 to 7 of the plaint detail out the events which have taken place in the course of the alleged transaction between the parties. 12. In order to seek an injunction from the Court of law, the plaintiffs have to satisfy the Court that prima facie case as also balance of convenience lies in their favour and they will suffer irreparable injury in the event the injunction sought for is not granted. Whether prima facie case exists in favour of the plaintiffs or not has to be carved out from the pleadings as also from the material placed on the record of the learned trial Court along with the suit and written statement/objections filed by the parties. The case on hand is based on contention of fraud, allegedly, practiced by the appellants defendants on the respondents - plaintiffs. The case on hand is based on contention of fraud, allegedly, practiced by the appellants defendants on the respondents - plaintiffs. In order to show that fraud has been practiced, the plaintiffs are required to give necessary details in the plaint as to how and under what circumstances the fraud has been practiced which would include the mention of date and place, where fraud has been practiced. The events, which led to practice the fraud, have to be, specifically, mentioned in the plaint. A vague pleading that fraud has been practiced without giving material details, even for prima facie purposes, cannot substantiate the claim that fraud has been practiced. The plaintiffs, in the facts and circumstances of this case and in view of the pleadings, do not have a prima facie case. The balance of convenience would also not tilt in their favour, in as much as, the sale deeds which have been executed in favour of the appellants, do, prima facie, show that the land has been transferred in favour of the appellants against proper sale consideration. The plaintiffs would also not suffer irreparable injury simply because of the fact that in the event they succeed in the suit, their claim can be quantified in terms of money for the reasons that they themselves have prayed, in the suit, for issuance of alternate decree for dissolution of partnership and rendition of account. If the plaintiffs succeed in proving that there has been an agreement of partnership between the plaintiffs and appellants, then a decree sought for can be passed in their favour. 13. After having recorded these findings, the provision of Section 52 of Transfer of Property Act 1977 would require to be noticed : 52. Transfer of property pending suit relating thereto During the pendency in any Court having authority in the State, of any suit or proceeding which is not collusive and in which any right to immoveable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court and on such terms as it may impose. 14. 14. The sheet anchor of the case of the plaintiffs in the suit is that there was an oral agreement between them and the appellants to launch a Joint Venture of raising constructions of flats/residential houses, which would, thereafter, be sold and the sale proceeds would be appropriated on 50% basis by the parties. It is for this reason that an alternative relief for dissolution of partnership and rendition of account has been prayed for. Section 52 of Transfer of Property Act 1977, by its operation, protects the rights of the plaintiffs. This substantive provision takes care of the transactions that may take place in respect of the immoveable property during the pendency of the suit. The said section 52 would come into operation at the time a decree is passed by the Court. In order to seek a decree from the Court, the plaintiffs have to prove their case during the trial. Culmination of the proceedings in the Civil Court do take some time. However, what is saved and protected by the Section aforementioned is the rights of the parties at the culmination of the trial. The said section also provides that the property cannot be transferred or otherwise dealt with by any party in the suit or proceedings so as to affect the rights of any party thereto in any decree or order which may be made therein, except under the authority of the Court and on such terms as it may impose. The Court is, thus, authorized to pass appropriate orders on such terms which it may impose. 15. The Court is, thus, authorized to pass appropriate orders on such terms which it may impose. 15. Since the decree for dissolution of partnership and rendition of accounts is also prayed for and it is the case set up in the plaint by the plaintiffs themselves that the parties had entered into an oral agreement, purpose whereof was to earn benefits by raising constructions for sale, it would be appropriate to modify the order passed by the learned trial Court in the following manner : The learned trial Judge will appoint a Commissioner, who may be an advocate, who would oversee the sale of the constructions which have been or which are being raised on the suit property and in his presence, the transaction shall be negotiated and sale deeds executed with further direction that the said Commissioner will report to the Court about every transaction that takes place and the consideration amount that has passed the hands. The appellants are directed to file an undertaking before the learned trial Court that they will inform the Commissioner appointed by the learned trial Court about the sales which may be negotiated and ultimately culminate in execution of sale deeds and will further undertake that in the event the plaintiffs succeed in the case, they (appellants) will abide by the decree so passed and if the plaintiffs are found entitled to receive any amount at the end of the trial, same will be paid to them. The appellants shall also undertake to, periodically, submit the accounts to thelearned trial Court. 16. The observations made in this order hereinabove shall not affect the trial of thecase before the learned trial Court and the suit shall be decided on its merits. 17. C.I.M.A is disposed of. The record of the suit to be transmitted to the learnedtrial Court forthwith