How conduct of plaintiff is relevant while considering application of temporary injunction?

IN THE HIGH COURT OF BOMBAY AT GOA

Appeal From Order No. 83 of 2006

Decided On: 15.09.2009

Appellants: Shri Yeshwant Laxman Pai Raikar, 
Vs.
Respondent: Shri Laxman V. Singbal, 

Hon'ble Judges/Coram:
A.H. Joshi, J.

Citation: 2010(1)MhLj903

Property - Injunction from Selling Property - Appellants-defendants filed present appeal against order of temporary injunction restraining them from selling or creating any third party interest in suit property - Held, facts on record do not support case of respondents-plaintiffs - Respondents have not denied or otherwise raised dispute as to appellants version of market price of property, and appellants allegation for agreed price was certain amount - Purportedly 95% consideration was paid and nothing was brought on record or suggestion to indicate what precluded parties from going for registered sale deed forthwith by paying entire amount and by going through registered agreement of sale and making such huge payment in front of Registrar and by making payment of such huge amount only by Demand Draft or cheques - Alleged market price is almost four times price consideration disclosed in agreement to sell - Though it is alleged that document has been notorised, notarial particulars such as entry in notary register etc. are not seen - Payment of cash does not stand to test of probabilities and to test reasonable probable behaviour in initial transaction - Appellants' plea that agreement was executed and respondents were in search of prospective high cost buyer who used to be highly probable - When appellants gave cheques of amount larger than disclosed consideration, transaction leans towards lending for interest or compensation - In result, appeal succeeds and order impugned is set aside

1. This is an appeal by unsuccessful defendants. They have suffered order of temporary injunction restraining them from selling or creating any third party interest in the suit property.

2. Facts as disclosed from the records are as follows:

(i) The suit property is the land surveyed under No. 224/3 admeasuring 8470 square metres of Village Farmagudi, Mangueshi, Bandora, Ponda Goa.

(ii) On 1.8.2003 defendants executed agreement of sale in favour of the plaintiffs. This agreement is notarised on the same day.

(iii) By the said agreement defendants agreed to sell the suit property to the plaintiffs for consideration of Rs. 45,00,000/- ( Rupees Forty Five Lakhs Only ).

3. Agreement represents that:

(a) Out of agreed consideration part of payment of Rs. 42,50,000/- was made by the plaintiffs in cash, as and by way of part payment.

(b) The balance amount of Rs. 2,50,000/- was to be paid within a period of 12 months.

(c) Final sale deed was to be executed within 60 days after the expiry of 12 months.

4. It is alleged that:

(a) The balance of Rs.2,25,000/- was paid on 8.4.2004 and Rs. 25,000/- on 19.4.2005, totalling to Rs. 2,50,000/-.

(b) These payments have been acknowledged.

(c) The plaintiffs also secured no objection certificate from Panchayat.

(d) The defendants failed to perform their part of promise inspite of plaintiff's passing entire consideration.

(e) The plaintiffs issued to the defendants a notice of legal action on 10.2.2006.

(f) The defendants have failed to comply.

5. Plaintiff has therefore filed Special Civil Suit No. 13/06/A seeking decree for specific performance.

6. In the said suit, the plaintiffs filed an application against the defendants seeking temporary injunction preventing them from alienating, transferring or creating third party interest in the suit property.

7. The suit and the application for temporary injunction were opposed by the respondents by filing written statement and reply. The substance of defence is as follows:

(i) The land subject matter had worth of Rs. 2,000/- square metre at the relevant time and its value is in multiple of the consideration represented in the agreement of sale.

(ii) Execution of document is admitted however actual promise to sell is denied.

(iii) It is alleged that for enabling the plaintiffs to find out a prospective buyer who would pay proper price, the said agreement was executed.

(iv) The defendants denied that the process of securing no objection etc. was done by the plaintiffs on his own.

(v) Defendants have denied payment of money of whatsoever under the contract.

(vi) It is denied that the plaintiffs were put in possession. The apprehension that the defendants would sell the land was denied.

8. As regards the delivery of cheques, signed by appellant No. 1, the defendants have averred in the written statement as follows:

Defendants state that the defendant No. 1 had handed over three cheques one for Rs. 45,00,000/-, another for Rs. 4,30,000/- and the third for Rs. 1,70,000/-, all dated 2.10.2004 to the plaintiff No. 1 on 2.10.2004 with a view to raising monies from the latter in the event of an emergency. However, no such emergency arose and the defendants did not have to borrow any monies from the plaintiff No. 1. The said cheques continue with the plaintiff No. 1 till the defendant No. 1 demanded that the same be returned to him as aforesaid.

9. Learned Trial Judge has heard both the parties and decided the application for temporary injunction by order dated 23.6.2006,and granted the temporary injunction as prayed.

10. The grounds of challenge in this appeal are mainly:

(a) Failure to observe the principles of natural justice, and as learned Advocate for the defendants was not available.

(b) The plaintiffs' story was unbelievable.

(c) The purported agreement of sale did not inspire confidence.

(d) There did not exist a contract/agreement of sale at all.

11. It is not explained by the appellant save and except the explanation emerging from the quotation contained in para No. 7 supra.

12. In reply learned Advocate for the respondents has placed reliance on facts as represented in the plaint and has placed reliance on following judgments:

(i) MANU/MH/0770/2004 : 2005(1) ALL MR 666 in Jagdish Chander Sachdeva v. Royal Bombay Yatch Club and Ors.

(ii) 2003(1) Goa Law Times 352 in Smt. Hirabai P. Kamat Mhamai and Anr. v. Shri Yeshwant B. Sakhalkar and Anr.

(iii) MANU/SC/0595/1990 : 1990 (Supp) Supreme Court Cases 727 in Wander Ltd. and Anr. v. Antox India Pvt. Ltd.

13. This Court is alive to the situation that this is an appeal arising out of interlocutory order. What this Court has to test as to whether on the basis of material available before the Trial Court such as the evidence in the form of affidavit and other documentary evidence, if the Trial Court could find that prima facie, plaintiffs have made out a case that there was a triable issue and the facts would warrant of maintaining status quo. In the event, the facts on record do not support the case of the plaintiffs, in that eventuality alone this Court would grant indulgence and interference in an appeal against order. It is therefore not necessary to discuss the case law cited and it is necessary to scrutinize the facts.

14. Perusal of pleadings and record placed on record of this appeal reveals as follows:

(i) Suit property is the land surveyed under No. 224/3 admeasuring 8470 square metres of Village Farmagudi, Mangueshi, Bandora, Ponda Goa.

(ii) According to the plaintiffs, the agreed price of the suit property is Rs. 45,00,000/-.

(iii) Defendants' version is that the ruling price of the property on the date of agreement of sale was Rs. 2,000/- per square metre.

15. The plaintiffs have not denied or otherwise raised a dispute as to defendants' version of the market price of the property, and defendants allegation for agreed price was Rs. 45,00,000/-.

16. The facts on record amaize and shocks the conscience of this Court are:

(a) While total consideration is of Rs. 45,00,000/-, an amount of Rs. 42,50,000/-was paid in cash.

(b) Purportedly 95% consideration was paid and nothing was brought on record or suggestion to indicate what precluded the parties from :

(i) Going for registered sale deed forthwith by paying entire amount.

(ii) By going through registered agreement of sale and making such huge payment in front of Registrar.

(iii) By making payment of such huge amount only by Demand Draft or cheques.

(c) Alleged market price is almost four times the price consideration disclosed in the agreement to sell.

(d) Though it is alleged that the document has been notorised, the notarial particulars such as entry in the notary register etc. are not seen.

(e) Enter into a transaction by paying only 95% price and agreed defer small 5% payment for 12 months and the sale deed was to be executed within 60 days after payment of residual consideration.

17. This payment of cash does not stand to the test of probabilities and to the test reasonable probable behaviour in initial transaction.

18. The defendants' plea that the agreement was executed and the plaintiffs were in search of the prospective high cost buyer who used to be highly probable.

Stipulation of the type quoted in point (e) of para 15 on the face to it create grave suspicion as to virtualness thereof.

19. All that can be seen in favour of plaintiff is that there must be some transaction between the parties. It may be money lending without or without interest or of brokerage or even of sale for higher price, and a fractionable is represented in the documents. When the defendant No. 1 gave cheques of amount larger than disclosed consideration, the transaction leans towards lending for interest or compensation. One thing is very clear that both parties are denying the Court, the truth of the matter.

20. One who has come before the Court seeking equitable relief, should have come with clean hands. He pleads a story which does not stop at failing to inspire confidence, but walks ahead and creates grave suspicion about his approaching Court with suppression.

21. In the result, the satisfaction of prima facie strong case recorded by the Trial Court is an opinion based on what appeared before Trial Court however, appears to be a product of a very simplistic and naive approach, and without applying barely minimum application of mind to human aspects and normal behavioral patterns and the preponderance of probabilities.

22. Present case is therefore not one where one amongst two probable views are taken by trial Court, rather a view, which is highly improbable has been taken by learned Trial Court.

23. In these premises, this Court is satisfied that the appeal has a strong case warranting indulgence in the appeal.

24. The case laws relied upon by the respondents does not help the respondents in any manner. Present case is such, where appellate Court must interfere.

25. In the result, appeal succeeds. The order impugned is set aside.

26. Learned Advocate for the respondents prays for stay of this order for a period of six weeks.

27. In the background, the interim injunction granted by Trial Court was already operating. No prejudice would be suffered by the defendants if the interim order is continued for a period of six weeks.

Order accordingly.

28. In the circumstances, parties are directed to bear own costs.

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