Oral Judgment:
Heard Mr. Diniz, learned Counsel appearing on behalf of the appellants and Mr. Mahambrey, learned Counsel appearing on behalf of the respondent.
2. Admit. By consent, heard forthwith.
3. This appeal is directed against the order dated 16/04/2013 passed by the learned Additional Adhoc Senior Civil Judge, Margao on exhibit D-4 in Special Civil Suit No. 9/2012/III.
4. The appellants are the plaintiffs in the said suit whereas the respondent is the defendant. The parties shall hereinafter be referred to in the manner in which they are designated in the cause title of the said suit.
5. The plaintiffs have filed the said suit for specific performance of contracts, declarations and permanent injunction. Suit Row House is the Row House bearing No. RH-19 admeasuring 139.00 square metres situated in the complex known as Danika Residency, Phase No.II situated at Grande Vanelim, Salcete Taluka, whereas suit Apartment is the Apartment bearing No. AF/2 admeasuring 90.00 square metres + 10.00 square metres (terrace) on the first floor of the building âAâ situated in the complex known as âMicon Arcadeâ situated at Cavelossim of Salcete Taluka. The case of the plaintiff is that they are the owners in peaceful possession and enjoyment of the suit Row House and the suit Apartment, they having paid the entire consideration amount as per the contract contained in agreements of construction cum lease dated 26/04/2005 and 20/03/2006 respectively in respect of the suit Row House and suit Row Apartment, and the consequential oral agreements and, therefore, they are entitled to execution of Deeds of Sale/Conveyance in their favour. Since according to the plaintiffs, there was an apprehension on account of the conduct of the defendant that he was not desirous of discharging his reciprocal promise arising out of the said agreements, the plaintiffs filed the suit. Along with the suit the plaintiffs had filed an application (Exhibit D-4) praying therein to restrain the defendants, their representatives, etc., from alienating, selling, etc. or creating third party rights in the suit Row House and Suit Row Apartment, until the final disposal of the suit.
6. The defendant filed Written Statement/Affidavit-in-Reply disputing the case of the plaintiffs. He alleged that plaintiff no.1 is a British national and Law does not permit a foreign national to purchase immovable property in India without complying with certain statutory requirements. He further stated that the present suit is filed for specific performance of lease agreements, which have already expired. The defendant filed Counter claim for declaration that the agreement of construction cum lease dated 20/3/2006 and the deed of lease for 56 months got expired on 21/08/2011 by efflux of time and for recovery of possession of the suit Row Apartment.
7. The plaintiffs filed Written Statement to the Counter Claim and Affidavit-in Rejoinder, thereby denying the case of the defendant and reiterating their case as pleaded.
8. Upon hearing the learned Counsel for the parties, the learned trial Court held that there is no sale deed in favour of the plaintiffs and, therefore, they cannot claim to be the owners. He further held that the plaintiffs do not qualify to be the âpersons resident of Indiaâ and, therefore, no sale deed can be executed in respect of the immovable property in their favour. He also found that there was no resolution passed by the Board of Directors of plaintiff no. 2 and that verification of the plaint and the affidavit in support thereof were both defective. Ultimately, the application came to be rejected.
9. Mr. Diniz, learned Counsel appearing on behalf of the plaintiffs invited my attention to clause no. 4(a) of the Agreements of Construction-cum-Lease wherein, plaintiff no.1 is required to pay certain amounts which were payable by the lessee to the developer lessor in accordance with the mode of payment set out in schedule III which payments are to be treated as advance towards the liability of the lessee and which amount had to be kept by the developer/lessor as security deposit. He submitted that this clause in both the agreements itself contains agreement for sale. He then invited my attention to various receipts which reveal that huge payments have been made by plaintiff no. 2 to the defendant in respect of suit Row House No. RH-19 and Suit Row Apartment i.e. Flat No. AF/2. He submitted that the plaintiffs are in possession of the suit Row House and suit Apartment and in such circumstances, if the defendant alienates, transfers, sells or creates any third party rights in the suit Row House and suit Apartment, then that will frustrate the very purpose of the suit filed by the plaintiffs. He submitted that the balance of convenience fully tilts in favour of the plaintiffs and they would suffer irreparable loss in case the limited relief as sought for, is not granted.
10. On the other hand, Mr. Mahambrey, learned Counsel appearing on behalf of the defendant submitted that there is no agreement at all in respect of the suit Row House and suit Apartment in favour of the plaintiffs. He submitted that two agreements for construction and sale dated 26/04/2005 and 20/03/2006 have expired by efflux of time. He further submitted that the plaintiffs are British nationals and statutory requirements under FEMA as well as RBI Rules and Regulations have not been complied. He submitted that the plaintiffs had agreed to surrender the possession of the suit premises which has not been done. According to learned Counsel, no case has been made out for grant of relief as prayed for and, therefore, the application for temporary injunction was rightly rejected.
11. I have perused the entire material produced by the appellants on record. I have also considered the submissions made by the learned Counsel for the parties.
12. It is seen that the learned trial Court has observed that the plaint and application for temporary injunction have not been verified properly and that the affidavit in support of the same is also defective. The trial Court observed that in the absence of a statement that the facts deposed are true to the own knowledge, it will be open to the deponent to escape criminal liability. In the verification of the plaint, the plaintiff no.1 has specifically stated that the contents of the plaint are true to the best of her knowledge except the legal submissions, which are based on legal advice. There is an affidavit of the plaintiff no.1 whereby it is affirmed that the contents of the plaint and the verification are true to her own knowledge. Thus, there is verification and affidavit in support. A perusal of the Written Statement and reply filed by the defendant reveals that no objection regarding defect in the verification and affidavit has been raised. In any case, the plaintiffs case is based on the documents, which have been duly produced on record.
13. It is not known as to why the learned trial Court has discussed about the power of attorney in paragraphs no. 20, 21 and 22 of the impugned order. In the present case, there is no power of attorney at all in respect of any of the plaintiffs. This reveals total non-application of mind.
14. Insofar as the resolution passed by the Board of Directors of the Company is concerned, the plaintiffs have now annexed to the present appeal a copy of the resolution. A perusal of the written statement as well as reply filed by the defendant reveals that there was no objection taken by the defendant alleging that there is no resolution passed by Board of Directors of the Company and that therefore, the suit filed on behalf of the Company is not maintainable. At the stage of temporary injunction, the trial Court ought not to have looked into the said objection, which was not taken by the defendant in the affidavit-in-reply, as the same can be produced at any time in the main suit.
15. Section 2(v) of the Foreign Exchange Management Act, 1999 defines âperson resident in Indiaâ as follows:
â2(v). âperson resident in Indiaâ means -
(i) a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include-
(A) a person who has gone out of India or who stays outside India, in either case -
(a) for or on taking up employment outside India, or
(b) for carrying on outside India a business or vocation outside India, or
(c) for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;
(B) a person who has come to or stays in India, in either case, otherwise than -
(a) for or on taking up employment in India, or
(b) for carrying on in India a business or vocation in India, or
(c) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;
(ii) any person or body corporate registered or incorporated in India,
(iii) an office, branch or agency in India owned or controlled by a person resident outside India, (iv) an office, branch or agency outside India owned or controlled by a person resident in India;â
16. As per the above definition, it is evident that a âperson resident in Indiaâ includes any person or body corporate registered or incorporated in India. There is no dispute that the plaintiff no. 2 is a Company duly registered in India.
17. Indisputably, the plaintiffs are in possession of the suit Row House and the suit Apartment. They have paid hug amounts to the defendant as is evident from the receipts, on record. The balance of convenience, therefore, is in favour of the plaintiffs since during the pendency of the suit if the said suit Row House and suit Apartment are transferred to someone else or if any third party right is created therein by the defendant, the suit itself would become infructuous. Considering the said aspect, the trial Court ought to have granted the limited relief of restraining the defendant from transferring, alienating, selling, mortgaging and/or creating any third party right in the suit Row House and suit Apartment as prayed for. The plaintiffs have filed the suit for specific performance of contract and it cannot prima facie be said that they will be adequately compensated in terms of money, since proprietary rights in respect of immovable property are concerned. Merely because there are no sale deeds as yet in favour of the plaintiffs, it cannot be said that they are not entitled to the limited relief as prayed for, at this stage.
18. In my view, the impugned order shows total non-application of mind towards the settled principles for grant of or refusal of temporary injunction. I am of the view that the plaintiffs have made out prima facie case for grant of relief as prayed for and in the circumstances, the balance of convenience tilts in favour of the plaintiffs, who will suffer irreparable loss in case the relief as prayed for is not granted.
19. In the result, the appeal is allowed.
(a) The impugned order dated 16/04/2013 passed by the trial Court on Exhibit D-4 in Special Civil Suit No. 9/2012/III is quashed and set aside.
(b) The said application for temporary injunction is allowed.
(c) During the pendency of Special Civil Suit No. 9/2012/III, the defendant, his heirs, legal representatives, family members, attorneys or any other person or persons claiming through the defendant, are restrained from alienating, selling, transferring, mortgaging or creating third party rights in the suit Row House and suit Apartment.
20. Appeal stands disposed of accordingly, with no order as to costs in the facts and circumstances of the case.