Since the TDR is a benefit arising out of an immovable property and is to be used and utilized into an immovable property it would certainly be an immovable property itself as held in the case of Chheda Housing (supra). 25. In the case of Sikandar Vs. Bahadur (1905(27) ILR 462) considered in the case of Chheda Housing (supra) it has been held a lease of more than 1 year of a right to collect market dues upon a piece of land being a benefit which arises out of the land would fall within the purview of Section 3 of the Registration Act 1877 and must therefore be made by a registered instrument.
IN THE HIGH COURT OF JUDICATURE
AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CHAMBER SUMMONS NO. 321 OF 200 7
IN
SUIT NO.56 7 OF 200 7
Jitendr a Bhims hi Shah
Vs.
Mulji Narpar Dedhia HUF
And
M/s. Pranay Investme nt & Ors.
CORAM: SMT.ROSHAN DALVI, J.
DATED: 18 TH MARCH , 200 9
Citation; 2009 (3) ALL MR 573, 2009 (4) MAH.L.J 533,2009 (5) BCR 832
1. The Plaintiff has sought amendment of the plaint in the Chamber Summons. The Plaintiff has also sought appointment of Court Receiver and an order of injunction restraining the Defendant as well as the Respondents from creating 3rd party rights in respect of the Transfer of Development Rights (TDR) on the suit property utilizing and loading the TDR on any property and acting pursuant to the agreements entered into by and between the Defendants and the Respondent s in respect of TDR and for an order against the Defendant to deposit monies received under the transaction relating to the TDR by him. 2. The Plaintiff is the partner of Defendant No.1 under registered Deed of Partnership dated 15th November 1993. During the pendency of the partner ship a suit came to be filed by the Partnership Firm against Respondent No.2 being Suit No.6736 / 1 99 9. On 18th August 2000 the minutes of the decree on admission came to be passed in the suit upon consent of the parties and signed by the parties. Under those Consent Terms the total claim of Rs.52.52 lakhs came to be admitted by Respondent No.2. A decree on admission came to be passed in terms of prayer (a) of that suit. That decretal amount was to be paid partly in cash and party under an agreement to sell the TDR which was to be obtained in the name of Respondent No.2 by Respondent No.2 to the Plaintiff in that suit being the Partnership Firm of the Plaintiff and the Defendant herein. Under the minutes of the order Respondent No.2 declared that it had applied to the MMC for issuance of their Development Rights Certificate (DRC) which was agreed to be transferred to the Plaintiffs in that suit. The Respondent No.2 undertook not to sell or transfer or utilize the DRC/TDR until the decree on admission dated 14th September 2000 was fully satisfied. The Defendant signed the Consent Terms as partner of the Firm of the Plaintiff and the Defendant. The Plaintiff had no knowledge of the said decree. 3. Part amount of the Consent Decree was paid and part satisfaction of the decree to the extent of Rs.25 91 750/- came to be recorded by the Prothonotory and Senior Master of this Court on 31 st December 2001. 4. On about 6th August 2003 the Respondent No.2 and the Partnership Firm of the Plaintiff and the Defendant herein entered into an MOU. The MOU is not happily worded. However a reading of the MOU shows that Respondent No.2 as the party of the first part had got processed the file with regard to the TDR which was to be transferred to the Partnership Firm cleared from the legal department of the MMC. It was agreed that the Partnership Firm would process the file at its own cost and be entitled to use the TDR in the manner it liked on the plot of land for which it was issued or to sell or dispose it off on consideration. The parties agreed to get satisfaction of the decree recorded. 5. On 26th August 2003 the Prothonotory and Senior Master of this Court recorded that the decree was fully satisfied out of Court without execution. 6. The Defendant No.2 signed the MOU as a partner of the Firm. The Plaintiff had no knowledge of the execution of the said MOU at that time. 7. It is the Plaintiffs case that on 16th May 2005 he learnt about the TDR issued in the name of Respondent No.2 by the MMC from a public notice issued in the Free Press Journal by the MMC. On 24th August 2005 the Plaintiff issued a notice upon the Defendant stating that he had come to know about the passing of the Consent Decree on 14th September 2000 and the agreement of Respondent No.2 and the Defendant with regard to the TDR through the public notice issued by the MMC. The Plaintiff stated that the Partnership Firm was entitled to the TDR and requested the Defendant not to deal with dispose off or create any 3rd party rights in the said TDR. The Plaintiff however did not take any legal action thereafter. The Plaintiff did not obtain an order of injunction against the Defendant in respect of the transfer or sale of the TDR. The matter remained at that for about 2 years. 8. On 11th January 2007 the Plaintiff dissolved the Firm under notice of dissolution of that date. On that date itself the MMC issued DRC in the name of Respondent No.2. On 17th January 2007 the Plaintiff issued a public notice in Free Press Journal and Mumbai Samachar of the fact of the dissolution of the Firm of the Plaintiff and the Defendant. The public gazette dated 18th January 2007 showed a public notice dated 11th January 2007 published under serial No.966 showing the fact of dissolution of the Partnership Firm of the Plaintiff and the Defendant dissolved from 11th January 2007 the notice having been given by the Plaintiff as the partner of the Firm.9. The Defendant appears to have sprung in action immediately upon receipt of the notice of the dissolution. He executed an agreement for sale of the TDR in favour of the Respondent No.1 on 19th January 2007 within 2 days of the dissolution of the Firm. This fact was brought to the notice of the Plaintiff on 21st February 2007 in the interim application moved by the Plaintiff in this suit which came to be filed on 17th February 2007 for dissolution and accounts. 10. On the same day i.e. 19th January 2007 Respondent No.2 executed an agreement for transfer / utilization of the FSI /TDR in favour of Respondent No.3. Respondent No.1 also entered into an agreement with the sister concern of Respondent No.3 for transfer of the TDR on 19th January 2007. That Concern has paid the entire consideration. The consideration that passed under both these agreements is Rs.65 24 198/- .11. These document s show that the Defendant sought to transfer the TDR which was to be used by the Partnership Firm to Respondent No.1 and Respondent No.2 who was to allow the Partnership Firm to use the TDR under the Consent Decree transferred it to Respondent No.3 on the same day. The Respondent No.3 claims to have purchased the TDR from Respondent No.1 through its sister Concern. 12. The Defendant has filed an affidavit in reply to the interim application taken out by the Plaintiff upon filing the suit being Notice of Motion No.777 /2 007. In that affidavit he has mentioned about various creditors of the Firm to the extent of Rs.50 lakhs who were not paid off constraining him to dispose off the TDR. The reason for the constraint mentioned in the affidavit is the non ?cooperative attitude of the Plaintiff sought to be shown by two omissions - in not operating the Bank account of the Firm in Cosmos Cooperative Bank Ltd since December 2006 by refusing to sign any cheque and in not even filing income tax returns since 2002. It is seen that the Defendant has sold and disposed off the TDR which admittedly belonged to the Firm singly as the partner of the Firm without notice to the Plaintiff without his consent and immediately upon the receipt of the notice of the dissolution. Hence despite the Plaintiffs non-cooperative attitude the Defendant did nothing from 2002 to December 2006 but sold the only asset of the Firm immediately upon receipt of the notice of dissolution. 13. The Defendant has expressly admitted the transfer and the consideration received thereunder. The total consideration received is stated to be Rs.65 24 198/- the consideration shown in all the aforesaid 3 agreements being the agreement s between the Defendant and Respondent No.1 and between Respondent No.2 and Respondent No.3 and Respondent No.1 and Respondent No.3 (through its sister concern). The Defendant has further admitted receipt of 2 payment s of Rs.15 24 198 / - on 25th January 2007 and Rs.25 lakhs on 15th February 2007. The specifications about further payment of Rs.25 lakhs is not mentioned. Hence out of an admitted amount of Rs.65 lakhs received the Defendant has shown 2 installment s aggregating to Rs.40 lakhs. The Defendant has undertaken to Court to use the amount for payment to the Creditors upon taking over all the liabilities of the Firm and paying the Plaintiff if anything remains payable upon account s being taken. 14. The Defendant and Respondent s 1 and 2 have not filed any affidavit in reply to this application. The Respondent No.3 has filed an initial affidavit on 20th March 2007. He claims to have purchased the TDR for consideration from Respondent No.1. 15. The Plaintiff has sought a direction against the Defendant for depositing the consideration received under his agreement with Respondent No.1 expressly admitted by him in his affidavit in reply to the Plaintiffs Notice of Motion No.777 / 2007 dated 27th February 2007 under prayer (d) of this Chamber Summons. 16. There is certainly an express admission of the receipt of the amount. The affidavit of the Defendant further shows the admission of the partnership between the parties as well as the dissolution of the Firm. The Defendant has stated that he himself is equally keen in dissolving the Partnership Firm on account of total loss of faith between the partners. The receipt of the consideration is undertaken to be used for paying off the creditors of the Firm. It is not known who are the creditors. Only the extent of the Creditors of more than Rs.50 lakhs is mentioned in the affidavit. Of course the creditors would have to be paid off before the partners are paid off any amount upon dissolution of the Firm. However it is seen that during the pendency of the Firm the Plaintiff admittedly has not taken part in the business of the Firm. Even accepting the non -cooperative attitude of the Plaintiff in signing the cheques or non- production of income tax returns there is no case of the Plaintiff having known or partaken in any affairs of the Firm. The notice given by the Plaintiff on 24th August 2005 to the Defendant shows that he was also not aware of the Consent Decree passed in favour of the Firm and against Respondent No.2. The Consent Decree which came to be passed in the year 2000 appears to have been brought to the knowledge of the Plaintiff only in August 2005. Who are the creditors of the Firm is not stated. A large amount from the only property of the Firm which was an assigned debt has been realized by the Defendant. That amount must be secured for the Plaintiff subject of course to the claim of genuine creditors of the Firm. The amount of Rs.65 24 198 / - would therefore require to be deposited in this Court to the credit of the account in this suit with the Prothonotory and Senior Master of this Court under the provisions of Order XXXIX Rule 10 of the C.P.C relied upon by Mr. Setalvad. It is seen from the affidavit of the defendant that he admits and that he holds the said amount. His undertaking to the Court in the aforesaid affidavit that it would be used only for payment to the creditors of the Firm and his admission that it is an amount belonging to the Firm shows that he holds it as a Trustee for the Firm as also for the Plaintiff who is his partner. That amount of course upon deposit would be disbursed as and when required in favour of bonafide creditors of the Firm upon they showing their bonafide claim. This would be a matter of taking accounts of the dissolved Firm admittedly dissolved and of which both parties claim dissolution ? the Plaintiff under his notice of dissolution dated 11th January 2007 and the Defendant as claimed in paragraph 21 of his affidavit in reply aforesaid dated 27th February 2007. So much for the direction required by the Plaintiff in the suit against his partner the Defendant. 17. Upon the transfer of the TDR in the manner aforesaid the Plaintiff claims reliefs also against Respondent No.3 as the ultimate transferor. It has utilized the TDR. It has developed the suit property. The entire property is constructed. The application for relief against the Respondent No.3 is far too delayed. Mr.Majumdar on behalf of the Respondent No.3 has drawn my attention to the judgment in the case of William Brunton Vs. John E.C. Brunton (A.I.R 1925 Madras 360) which was also a partner ship action but in which equitable reliefs were sought to avoid a contract on the ground of fraud. The principles regarding the application which was long delayed as held in that judgment are the consideration of the length of the delay of the nature of the acts done during the intervals affecting rights of parties and the balance of justice or injustice. 18. Respondent No.3 was specifically directed to file further affidavits to show the acts done by the Respondent No.3 under the TDR. In the first such further affidavit the Respondent only stated that the entire TDR which was sought to be utilized by the Firm under the Consent Decree between the Firm and Respondent No.2 was utilized in the construction of the building on the suit plot which construction has been completed. The Respondent relied upon certain photographs as well as the Commencement Certificate issued by the MMC. The Occupation Certificate has not been issued. 19. The Respondent filed the yet further affidavit for the directions to show the 3rd party rights if any created. That affidavit shows a registered Development Agreement between Panchavati Co-op. Hng. Society Ltd and the Respondent No.3 dated 31st October 2005 registered on 23rd January 2006 in which the Respondent was to give alternate accommodation to 4 occupants on the suit plot before development of the plot. The Respondent No.3 was to grant permanent accommodation of the carpet area of the premises specifically recited in clauses 6 and 7 of the said Development Agreement. The Respondent No.3 itself was to retain the balance area of the ground and mezzanine floor in the said construction. Out of an area of 4145.42 sq. ft. of the ground floor 2767 sq. ft. were to be given as and by way of permanent alternate accommodation to the 4 occupants of that plot. Out of an area of 2084.55 sq. ft of the mezzanine floor 1376 sq. ft. was to be given to those 4 occupants by way of permanent alternate accommodation. Therefore the balance area that the Respondent was to retain was 1378sq. ft. on the ground floor and 708 sq. ft on the mezzanine floor. 20. The Respondent No.3 has entered into a registered Deed of Mortgage with Dena Bank mortgaging the entire construction other than the 9 shops on the ground floor of the building. Only the 4 shops on the ground floor and 4 shops on the mezzanine floor as also the retained area of the Respondent No.3 itself as the occupant has not been mortgaged. 21. It is argued on behalf of the Respondent No.3 that he has loaded more than 2000 sq. mtrs of TDR in the said construction and that the Firms TDR was only 808.4 sq. mtrs. Mr. Majumdar argued that the alternate accommodation provided in the 9 shops on the ground floor is the construction from the FSI of the plot itself. The TDR loaded on the plot is utilized for construction of the higher floors. That part is mortgaged to the Bank. The ground floor construction cannot fall under any order of injunction of the Court as it has not been the product of any TDR utilization. Considering the nature of the acts done? as held in the case of William (supra) the entire constructed premises is required to be protected against the injunction sought by the Plaintiff since no part of the construction which utilised the TDR of the Firm of the Plaintiff and the Defendant is free for an order of injunction.
22. Upon the aforesaid chronology of events it would have to be seen whether the Plaintiffs action followed upon dissolution of the Firm the notice of which came to be given upon the DRC being issued by the MMC on 11th January 2007 but later not pressed for 2 years could be so tainted with delay as to disentitle the Plaintiff to any equitable relief. The relief sought for by the Plaintiff is two fold:- i). Against the Defendantii). Against Respondent No.3The Plaintiff has applied for deposit by the Defendant of the admitted amount received as consideration under the TDR which the Firm came to be entitled to under the Consent Decree dated 14th September 2000. Soon after filing of the suit on 17th February 2007 the Plaintiff came to learn on 21st February 2007 that the Firms only asset being the TDR was sold by the Defendant as the partner of the Firm to Respondent No.1. Until then there was no delay on the part of the plaintiff. The Plaintiff took out this Notice of Motion on 5th March 2007. Even until then not much appears to have been done by any of the Respondent s under the TDR. The Commencement Certificate of MMC itself is issued on 18th May 2007. The delay on the part of the Plaintiff is in not insisting upon the interim reliefs in this Chamber Summons after it came to be filed. The first affidavit to the Chamber Summons by Respondent No.3 has been filed on 20th March 2007. Thereafter until this Chamber Summons appeared on the board of this Court in March 2009 the reliefs prayed for have not been pressed. The construction has been completed by the Respondent No.3. The entire property has been mortgaged to Dena Bank save and except 9 shops on the ground floor. 8 of these shops are to be given by way of permanent accommodation to the occupants. The Respondent No.3 as one of the occupants itself was to retain the balance area of the shops i.e. the area aforesaid. That area is not mortgaged to the Bank. That area is not shown to have been sold by Respondent No.3 to any 3rd party. However that area has been constructed from the FSI available on the plot itself and not under the TDR. It may be mentioned that the Plaintiff has not sought to avoid the TDR. The Plaintiff has accepted the TDR as an asset of the Firm which could have been transferred by the Firm. The Plaintiff only claims his share in the proceeds of the TDR as an asset of the dissolved Firm. The Plaintiff would be entitled to the extent of the value of the TDR which could be distributed between the partners upon taking accounts i.e. after payment to the bonafide Creditors of the dissolved Firm. If therefore the consideration for which the TDR was transferred is deposited in the Court by the Defendant as per his own express admission in his affidavit dated 27th February 2007 the Plaintiff would obtain all the necessary reliefs which could be granted in a suit for Dissolution and Accounts.
23. It is contended on behalf of the Plaintiff that the TDR is an immovable property. It has been so held by the Division Bench of this Court in the case of Chheda Housing Development Corporation Vs. Bibijan Shaikh Farid & Ors. (2007(2) B.C.R.587). In paragraph 15 of that judgment the definition of immovable property in Section 3(26) of the General Clauses Act 1897 has been considered. The definition is inclusive and shows land benefits arising out of land things attached to the earth and permanently fastened to anything attached to the earth as immovable property. Considering the earlier decisions it was observed that the right to collect market dues and bazar dues were benefits and were held to be immovable properties accordingly. The further observation is that a lease of the market dues had to be under a registered instrument and that the lease of bazaar dues would be lease of immovable property. Consequently it is held that an agreement for use of TDR could be specifically enforced. Since TDR is held to be immovable property all the incidents of immovable properties would be attached to such an agreement. Two of the incidents of it being an immovable property would be registration of the agreement for transfer of the TDR under Section 17(1)(b) of the Registration Act and the lack of implied authority of a partner in dealing with or in transferring the TDR as an agent of the Firm during the course of the business of the Firm to bind the Firm under Section 19(2)(g) of the Partnership Act. 24. It is contended by Mr. Setalvad that the Defendant could not have transferred the TDR to Respondent No.1 pursuant to the bar created by Section 19(2)(g) of the Partnership Act. Since the TDR is a benefit arising out of an immovable property and is to be used and utilized into an immovable property it would certainly be an immovable property itself as held in the case of Chheda Housing (supra). 25. In the case of Sikandar Vs. Bahadur (1905(27) ILR 462) considered in the case of Chheda Housing (supra) it has been held a lease of more than 1 year of a right to collect market dues upon a piece of land being a benefit which arises out of the land would fall within the purview of Section 3 of the Registration Act 1877 and must therefore be made by a registered instrument.
26. Hence the consequence of the TDR being an immovable property would be the requirement of registration upon its transfer. The TDR was issued in the name of the Respondent No.2 by the MMC. Even prior to its issue the Respondent No.2 had claimed the TDR. The Decree on Admission obtained by the Firm of the Plaintiff and the Defendant against Respondent No.2 in Suit No.6736 / 1 999 was to be satisfied partly by payment of money and partly by the agreement to sell the TDR to the Partnership Firm. The TDR is transferred to the Defendant as a partner of the Partnership Firm or to the Firm itself by Respondent No.2 under the Consent Decree for consideration. The Consent Decree is not registered. The agreement is between the Defendant and Respondent No.1 as well as between Respondent No.2 and Respondent No.3 as also between Respondent No.1 and Respondent No.3 all dated 19th January 2007 have all not been registered. None of these parties including the Plaintiff therefore can base its claim in an action in law upon the unregistered agreement to transfer TDR which is a benefit arising from an immovable property and consequently immovable property itself.
27. Hence the reliefs sought under prayers (a) (b) and (c) of this Chamber Summons need not be granted. The Respondent s are neither necessary or proper parties to the suit which is a suit for dissolution of the suit Partnership Firm and its account s. No reliefs can be passed against the Respondent s for want of registration of the Consent Decree itself. Consequently reliefs under prayers (a) (b) and (c) are refused.
28. The Plaintiff has claimed the relief under prayer (d) as aforesaid against the Defendant. The Defendant is admittedly the Plaintiffs partner under the suit Partnership Deed. The Partnership is admittedly dissolved. The Defendant himself has accepted and wants dissolution of the Firm. Consequently accounts of the Firm are required to be made. The Defendant has been in management. He has not produced any account s. He has stated that the Creditors of the Firm are to the tune of more than Rs.50 lakhs. He has admitted receipt of Rs.65 24 198 / - on account of the TDR which the Firm acquired and thereafter sold.
29. The express admission of the Defendant about the Partnership Firm its dissolution and the account relating to the main and only one asset of the Partner ship requires Judgment on Admission itself to be passed under the provisions of Order XII Rule 6 of the C.P.C. Consequently at least the preliminary decree for dissolution of the suit Partnership Firm under the provisions of Order XX Rule 15 of the C.P.C is forthwith required to be passed. The shares of the Plaintiff as well as the Defendant s are required to be declared. They admittedly share 50% in the profits and losses of the Firm. 30. It is declared that the Partnership Firm stood dissolved on and from 11th January 2007 the date of the notice of dissolution and the date from which the notice in the official gazette came to be made affective. Accounts of the suit Firm shall therefore be taken.
31. The suit is referred to the Commissioner for taking account s under Order XXVI Rule 2 of the C.P.C with directions under Order XXVI Rules 11 and 12 of the C.P.C. The Defendant who has alone been in management of the suit Partnership Firm shall produce the bank accounts as well as any other accounts kept in the normal course of the conduct of the Partnership business by him before the Commissioner for taking accounts.
32. The Defendant shall show all the document s relating to the Creditors of the Firm.
33. The Defendant shall give inspection and xerox copies of these document s to the Plaintiff.
34. The Commissioner for taking account s shall ascertain the genuine and bonafide Creditors if any of the Firm. 35. The Commissioner shall allow the parties to lead oral and documentary evidence as required and desired by each of them. 36. The Commissioner shall make his report of the accounts of the Firm to the Court upon the evidence.
37. The Defendant shall deposit the amount of Rs.65 24 198 / - admittedly received by him in Court within 4 weeks from today. The Prothonotory and Senior Master of this Court to invest the said amount in any Nationalized Bank initially for a period of 37 months. 38. Chamber Summons is disposed of accordingly. 39. Preliminary Decree is passed in the suit accordingly.
40. Suit to be placed on board for final decree upon the Commissioner making his report.
No comments:
Post a Comment