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2014 DIGILAW 1341 (BOM)

Mohamed Salman Noorani v. Radhika Bhargava

2014-06-25

M.S.SONAK, MOHIT S.SHAH

body2014
ORAL ORDER Both these appeals are directed against order dated 13 March 2014 of the learned Trial Judge in the notice of motion taken out by the plaintiffs in a suit for setting aside the Deed of Apartment dated 29 October 2010 executed by the appellants in Appeal (L) No.275 of 2014 (defendants Nos. 1 & 2) in favour of the appellant in Appeal No.239 of 2014 (defendant No.10), transferring their right, title and interest as executors of the Will of the deceased and putting defendant No.10 in possession of the suit flat on the Napean Sea Road, Mumbai (“the suit flat”). 2. The executors (defendants Nos. 1 & 2) have propounded the Will of the deceased in probate petition filed on 10 February 2006. The suit flat was one of the properties left by the deceased. 3. According to plaintiffs, who have filed the petition for letters of administration on 19 June 2009, they have 20% share in the estate of the deceased and therefore also 20% share in the suit flat. In the petition for letters of administration, the plaintiffs have valued the total estate of the deceased including the suit flat at Rs.9.74 crores. 4. The learned Trial Judge has taken the view that since the executors have transferred the suit flat to defendant No.10 before obtaining probate, the transaction is contrary to law and therefore the purchaser i.e. defendant No.10 can remain upon the suit flat only as an agent of the Court Receiver. By the impugned order, the learned Trial Judge has given the following directions:- (a) The Court Receiver is appointed Receiver in respect of the suit flat. (b) The Court Receiver shall allow defendant No.10 to continue to occupy the suit flat but only upon execution of the usual undertakings and upon payment of royalty in respect of the suit flat upon determination of the true market value of the suit flat. (c) Defendant No.10 cannot be allowed to remain upon the suit flat free of charge. His possession would be required to be taken by the Court Receiver unless the necessary charges are paid by him. (d) If defendant No.10 deposits in Court the 20% of the valuation shown by the plaintiffs or as would be procured by the Court Receiver to determine the royalty payable by defendant No.10 in Court, the Court Receiver would then stand discharged. (d) If defendant No.10 deposits in Court the 20% of the valuation shown by the plaintiffs or as would be procured by the Court Receiver to determine the royalty payable by defendant No.10 in Court, the Court Receiver would then stand discharged. (e) Defendant No.10 shall not alienate, encumber, transfer, part with possession, create any third party rights in the suit flat pending the suit. 5. The learned counsel for the appellants (defendant Nos.1 and 2 and defendant No.10) have raised the following contentions. (i) Learned trial Judge has completely erred in taking the view that the executors (defendant Nos.1 and 2) had acted 'totally without authority of law' in transferring the suit flat to defendant No.10. It was submitted that in terms of Section 211 read with Section 307 of the Indian Succession Act, 1925 (said Act), there is no bar to an executor dealing with the property which is subject matter of the will, until a probate is issued by the Testamentary Court. It is contended that this position clearly emerges from the statutory provisions as well as on the authority of several decisions of the Supreme Court in this regard; (ii) In any event, it is submitted that no case is made out for directing defendant No.10 to deposit the amount to secure 20% of the value of the suit flat or in the alternative suffer appointment of the Court Receiver. The plaintiffs have themselves valued the entire estate of the deceased at Rs.9.74 crores, which includes the suit flat and, therefore, there is no question of relying upon the valuation report subsequently produced by the plaintiffs to show that the value of the suit flat is Rs.16.2 crores. Without prejudice, it is contended that there is already a restraint upon defendant No.10 against transfer or alienation of the suit flat. As such, the suit flat itself, let alone the remainder of the estate, would afford more than adequate security for the plaintiffs' claim, which is admittedly restricted to 20% share in the estate. 6. On the other hand, learned counsel for the original plaintiffs has supported the impugned order under appeal by submitting that the learned trial Judge has taken into consideration all relevant facts and circumstances in passing an order which is discretionary in nature. In particular, the learned counsel emphasizes that defendant Nos. 6. On the other hand, learned counsel for the original plaintiffs has supported the impugned order under appeal by submitting that the learned trial Judge has taken into consideration all relevant facts and circumstances in passing an order which is discretionary in nature. In particular, the learned counsel emphasizes that defendant Nos. 1 and 2, as executors have transferred the suit flat without obtaining probate, and the plaintiffs are likely to succeed in their suit. The transfer is without authority of law and therefore, applying the principle set out by the Supreme Court in Parmanand Patel v. Sudha A. Chowgule, AIR 2009 SC 1593 , the learned Single Judge of this Court is right in putting the defendant Nos.1 and 2 and defendant No.10 to terms, so that, when the plaintiffs succeed in their claim, the success shall not be in vain. 7. As regards the first contention raised on behalf of the appellants, it would be useful to make reference to the provisions contained in sections 211, 213 and 307 of the Indian Succession Act, 1925 (the Act) which read thus- “211. Character and property of executor or administrator as such- (1) The executor or administrator, as the case may be, of a deceased person is his legal representative for allpurposes, and all the property of the deceased person vests in him as such. (2) When the deceased was a Hindu, Muhammadan, Buddhist, Sikh, Jain or Parsi or an exempted person, nothing herein contained shall vest in an executor or administrator any property of the deceased person which would otherwise have passed by survivorship to some other person. 213. Right as executor or legatee when established- (1) No right as executor or legatee can be established in any Court of Justice, unless a Court of competent jurisdiction in India has granted probate of the Will under which the right is claimed, or has granted letters of administration with the Will or with a copy of an authenticated copy of the Will annexed. (2) This section shall not apply in the case of Wills made by Muhammadans or Indian Christians, and shall only apply- (i) in the case of Wills made by any Hindu, Buddhist, Sikh or Jaina where such Wills are of the classes specified in clauses (a) and (b) of section 57; and (ii) in the case of Wills made by any Parsi 307. Power of executor or administrator to dispose of property – (1) subject to the provisions of sub-section (2), an executor or administrator has power to dispose of the property of the deceased, vested in him under section 211, either wholly or in part, in such manner as he may think fit. (2) If the deceased was Hindu, Muhammadan, Buddhist, Sikh or Jaina or an exempted person, the general power conferred by subsection (1) shall be subject to the following restrictions and conditions, namely:-- (i) The power of an executor to dispose of immoveable property so vested in him is subject to any restriction which may be imposed in this behalf by the will appointing him, unless probate has been granted to him and the Court which granted the probate permits him by an order in writing, notwithstanding the restriction, to dispose of any immoveable property specified in the order in a manner permitted by the order. (ii) An administrator may not, without the previous permission of the Court by which the letters of administration were granted,-- (a) mortgage, charge or transfer by sale,, exchange or otherwise any immoveable property for the time being vested in him under section 211, or (b) lease any such property for a term exceeding five years. (iii) A disposal of property by an executor or administrator in contravention of clause (i) or clause (ii), as the case may be, is voidable at the instance of any other person interested in the property. 332. Assent necessary to complete legatee's title – The assent of the executor or administrator is necessary to complete a legatee's title to his legacy. 8. On a plain reading of Section 211, it is clear that the executor of the deceased person is his legal representative for all purposes, and the property of the deceased person vests in him as such on the date of death of the testator. Section 213 of the said Act, does not dent the aforesaid position, but merely provides that no right as an executor can be established in any Court of Justice, unless a Court of competent jurisdiction in India has granted a probate of the Will under which it is claimed. This does not mean that the vesting of the property in the executor stands postponed until the executor obtains a probate of the Will from a Court of competent jurisdiction. This does not mean that the vesting of the property in the executor stands postponed until the executor obtains a probate of the Will from a Court of competent jurisdiction. Further, section 307 of the said Act makes the position further clear by providing in specific terms that (subject to the exceptions in sub-section (2) which are not applicable in this case) the executor of a Will has the power to dispose of the property of the deceased vested in him under section 211 of the said Act, either wholly or in part, in such manner as he may think fit. In our opinion, therefore, upon a plain reading of the aforesaid statutory provisions, it is clear that transfer of the suit flat by the executors i.e. defendant Nos.1 and 2 before obtaining probate, cannot be regarded as being 'without authority of law'. 9. In the case of Crystal Developers v. Asha Late Ghosh, (2005) 9 SCC 375 , the Supreme Court, upon consideration of the provisions contained in Sections 211, 212, 213 and 307 of the Act has ruled that an executor is the creature of the Will. In contrast, an administrator derives his rights from the grant of Letters of Administration by the Court. By reference to Section 221 of the Act, it has been held that certain intermediate acts of the Administrator are not protected as the authority of the Administrator flows from the grant by the competent Court, unlike the vesting of the property in the executor under a Will in terms of Section 211 of the Act. Further, by reference to Section 307 of the Act, the Supreme Court has observed that an executor has the power to dispose of the property of the deceased, vested in him under Section 211, either wholly or in part, in such a manner he may think fit. Further, section 332 of the Act indicates that the property vests in the executor under the Will from the date of the demise of the testator and the executor can dispose of the property and that on the assent of the executor, the title of the legatee under the Will is completed. Further, section 332 of the Act indicates that the property vests in the executor under the Will from the date of the demise of the testator and the executor can dispose of the property and that on the assent of the executor, the title of the legatee under the Will is completed. In the said judgment, the Supreme Court has quoted with approval the decision of the Madras High Court in S. Parthasarathy Aiyar v. M. Subbaraya Gramany, AIR 1924 Madras 67, which reads thus- “It is not right, as has been suggested in some cases, to treat a will of which probate has not been granted as non-existent and the property passing by intestacy. On the contrary the will is a perfectly valid document. The executor under it can deal with the property and give a perfectly good title though it may be that to complete that title it requires probate to be taken out at a later date.” (emphasis supplied) 10. In the aforesaid decision of Crystal Developers (supra) the Supreme Court has also quoted with approval the decisions of several High Courts which take the view that the prohibition, if any, in Section 213 of the Act is regarding establishing any right under the Will without probate before the competent Court of Law, however, that section cannot be understood as one by which, the vesting of right as per the provisions of the Will is postponed until the obtaining of the probate. The Will takes effect on the death of the testator and what section 213 of the Act says is that the right as executor or legatee can be established in any Court only if the probate is obtained. Therefore, Section 213 does not prohibit the use of Will which is unprobated as evidence for the purposes other than to establish right as an executor or a legatee. The Will gives the property to the executor. The grant of probate is only the method by which the Will can be proved. When the probate is granted, it only operates on the whole estate and establishes the Will from the date of the death of the testator. 11. Thus, it is clear that vesting of the property of the deceased in the executor under Section 211 is independent of the grant of probate. When the probate is granted, it only operates on the whole estate and establishes the Will from the date of the death of the testator. 11. Thus, it is clear that vesting of the property of the deceased in the executor under Section 211 is independent of the grant of probate. Section 211 of the said Act does not say or indicate, with reference to an executor, that the executor becomes the legal representative only upon obtaining the probate. On the other hand, Section 307, in terms makes it clear that an executor can exercise the power of disposition without obtaining probate. Any restriction, at the highest, may relate in the circumstance that an executor must administer the estate in accordance with the Will and any acts or omissions on the part of the executor must not be incompatible with the administration of the estate. In the case of M.V.Shankar Bhat v. Claud Pinto (since deceased) by L.Rs and others- (2003)4 SCC 86 , the Supreme Court has observed that it is beyond any cavil that in terms of Sections 211(1) and 307(1) of the Act, the executor of the Will has an absolute right to transfer the property. Thus, in principle, and also on authority, the finding given by the learned Single Judge that the transfer of the suit flat by the executors viz. Defendant Nos.1 and 2 is 'totally without the authority of law' cannot at all be sustained. 12. Assuming that the plaintiffs may succeed, it needs to be noted that the plaintiffs themselves had valued the entire estate of the deceased at Rs.9.74 crores. Thereafter, the plaintiffs have attempted to produce some material and urge that the value of the suit flat itself is in the range of Rs.15 to 16 crores. Admittedly, the plaintiffs' claim only 20% share in the estate of the deceased. Therefore, even if the entire case set out by the plaintiffs is to be accepted at its face value, the suit flat, by itself affords more than ample security to protect the interests of the plaintiff, should they succeed in the proceedings instituted by them. Thus, prima facie, the suit flat by itself will afford more than ample security to secure the interests of the plaintiffs, not only for their claim for 20% share in the estate but also for the share of mesne profits in the suit flat. Thus, prima facie, the suit flat by itself will afford more than ample security to secure the interests of the plaintiffs, not only for their claim for 20% share in the estate but also for the share of mesne profits in the suit flat. As noted earlier, there is already a restraint order upon the defendant No.10 in the matter of sale, transfer or alienation of the suit flat pending the testamentary proceedings. 13. The principles laid down by the Supreme Court in the case of Parmanand Patel (supra) in the matter of appointment of Receiver by resort to the provisions of Order 40, Rule 1 of the CPC, are clearly not attracted to the facts and circumstances of the present case. The order for appointment of Receiver came to be passed by the learned Single Judge, on the basis that the transfer of the suit flat by the executors prior to obtaining the probate, was without authority of law. As noted above, we have disagreed with the learned Single Judge in so far as this position is concerned. Further, in view of the restraint order operating against defendant No.10 in the matter of transfer, alienation or creation of third party rights qua the suit flat, there is no present or imminent danger of waste, which is relevant consideration when it comes to appointment of Court Receiver. Besides the value of the suit flat, as noted earlier, is more than enough to secure plaintiffs' claim in the testamentary proceedings, even for mesne profits. Accordingly, we are of the view that the plaintiffs have not made out any case for appointment of Court Receiver or for a direction to defendant No.10 to deposit any amount. 14. In our view, the injunction granted by the Court against defendant No.10 restraining him from alienating, encumbering, transferring, parting with possession, creating any third party rights in the suit flat pending the suit is sufficient safeguard for the interest of the plaintiffs and no other or further interim relief is required to be granted. The parties would, however, be at liberty to move the learned trial Judge to take up Probate Petition No.9 of 2007 and petition for Letters of Administration being L.A. No.106 of 2010 for early trial and disposal. 15. The parties would, however, be at liberty to move the learned trial Judge to take up Probate Petition No.9 of 2007 and petition for Letters of Administration being L.A. No.106 of 2010 for early trial and disposal. 15. Accordingly, the appeal is allowed and the impugned judgment and order dated 13 March 2014 passed by the learned Single Judge is hereby set aside. Notice of Motion No. 2825 of 2011 shall stand disposed of in terms of the following direction only:- “Defendant No.10 shall not alienate, encumber, transfer, part with possession, create any third party rights in the suit flat pending the suit.” In the facts and circumstances of the case, there shall be no order as to costs.