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ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 88 OF 2020
IN
NOTICE OF MOTION (L) NO. 2304 OF 2018
IN
SUIT NO. 461 OF 2010
IN
IN
1. Mohammed Riyaz Shaikh
2. Noor Mohammed Shaikh
3. Shaikh Hasiboon Noor …Appellants
All residing at 704, 7th floor, Evershine
Pine Building no. 1, 2, 3 & 4 Co- operative Housing Society Ltd, Opposite Gaurav City, Beverly Park, Mira Road (East), District-Thane
~
Binaifer Sanjay Kohli, residing at 1101, Ocean View, 11th floor, Decccan Society, Union Park
Khar west, Mumbai 400 052
2. Shoeib Mohammmed Taj
Mohhammed Shaikh, residing at Gaurav Residency, Phase II, Row House no. 4A, Ground floor, situated near Mayor’s Bungalow, Beverly Park, Kankiya, Mira road
(East), Distrct -Thane.
3. Mumtas Shoeib Shaikh, residing at Gaurav Residency, Phase II, Row House no. 4A, Ground floor, situated near Mayor’s Bungalow, Beverly Park, Kankiya, Mira road
(East), Distrct -Thane.
…Respondents
4. Asif Rafique Shaikh, residing at Adarsh Building, Flat NO. 003, first floor, Chheda Encllave, Mira
Road, District – Thane.
5. Evershine Builders Pvt
Ltd, A company incorporated under provisions of Companies Act, 1956 having its registered office at Veena
Beena Shopping centre, Gurunank
Road Bandra West, Mumbai – 400 050
6. Evershine Pine Building NO. 1, 2, 3 & 4, Co-operative Housing Society Ltd, Opposite Gaurav City, Beverly Park, Mira road – East, District - Thane
Rachure .
Mr SK Dhekale, Court Receiver, with Gazala Khan-SO present.
DATED : 8th September 2022
ORAL JUDGMENT
1. The Appeal is directed against an order of 5th September 2019 made by the learned single Judge, RI Chagla J on a motion filed by the Original Plaintiff. The Appellants before us were Respondents Nos. 5, 6 and 7 to the motion. They are not parties to the suit. The suit said that Defendant No. 2 had embezzled vast amounts from the Plaintiff. Then, in collusion and connivance, the 3rd Defendant and the 2nd Defendant’s brother-in-law, the 4th Defendant, sought to use those embezzled funds to acquire various properties.
2. The suit makes no claim for the properties. It is a suit for a money decree to recoup the loss, and for compensation.
3. The elaborate and careful judgment of Chagla J sets out in meticulous detail the relevant facts. Not all of these are necessary for our purposes. Before we turn to those facts, we must accept without qualification a threshold submission by Mr Cama that this being an order on an interlocutory application by the trial court, settled law does not permit the appeal court to interfere unless the impugned order is shown to be not reasonably possible or to be capricious, perverse or arbitrary. In this context he cites a judgment dated 23rd June 2022 by a bench of which one of us (GS Patel J) was a member in World Crest Advisors LLP v Catalyst Trusteeship Ltd.[1] In paragraph 1 to 7 we held this: “1. The original Plaintiff is in appeal against an order of 17th June 2022 of a learned Single Judge of this Court, AK Menon J, declining, in his discretion, to grant ad-interim relief in the Plaintiff’s Interim Application (L) No. 17730 of
2022. The impugned order is a speaking order (notwithstanding that the Plaintiff assails it for insufficiency of reasons). Menon J’s exercise of discretion in refusing relief is important in view of the decision of the Supreme Court in Wander Limited And Another v Antox India Private Limited.[2] In paragraph 14, the Supreme Court said:
3. Wander v Antox was reaffirmed by the Supreme Court in Mohd Mehtab Khan v Khushnuma Ibrahim Khan.[3] That was a case where a Division Bench of this Court granted interim relief in an appeal against an order of the learned Single Judge. In paragraph 20, the Supreme Court said:
20. In a situation where the learned trial court on a consideration of the respective cases of the parties and the documents laid before it was of the view that the entitlement of the plaintiffs to an order of interim mandatory injunction was in serious doubt, the appellate court could not have interfered with the exercise of discretion by the learned trial Judge unless such exercise was found to be palpably incorrect or untenable. The reasons that weighed with the learned trial Judge, as already noticed, according to us, do not indicate that the view taken is not a possible view. The appellate court, therefore, should not have substituted its views in the matter merely on the ground that in its opinion the facts of the case call for a different conclusion. Such an exercise is not the correct parameter for exercise of jurisdiction while hearing an appeal against a discretionary order. While we must not be understood to have said that the appellate court was wrong in its conclusions what is sought to be emphasised is that as long as the view of the trial court was a possible view the appellate court should not have interfered with the same following the virtually settled principles of law in this regard as laid down by this Court in Wander Ltd. v. Antox India (P) Ltd. [1990 Supp SCC 727]
4. It is also well settled that when considering an application for interim relief, a Single Judge is not expected and is in fact not permitted to conduct mini-trial. It is the prima facie case that is to be assessed.[4]
5. Further, as the Supreme Court said in Monsanto Technology LLC v Nuziveedu Seeds Ltd,[5] the appeals court must not ‘usurp the jurisdiction of the Single Judge’; it must confine itself to an adjudication of whether the impugned order was or was not justified in the facts and circumstances of the case.
6. In a very recent decision of 14th March 2022 in Shyam Sel & Power Ltd & Anr v Shyam Steel Industries Ltd,[6] the Supreme Court had before it a challenge to an appellate order from an interim or interlocutory order of a learned single Judge of the Calcutta High Court. Shyam Sel reaffirmed the law in Wander Ltd and Monsanto.[7] In Shyam 4 SM Dyechem Ltd v Cadbury India Ltd, (2000) 5 SCC 573; Anand Prasad Agarwalla v Tarkeshwar Prasad & Ors, (2001) 5 SCC 568; Zenit Mataplast Pvt Ltd v State of Maharashtra & Ors, (2009) 10 SCC 388.
7 Paragraphs 11, 29, 31, 34, 35, 36. Sel, the Supreme Court inter alia said that to intervene, the appellate court must discuss how the view taken by the trial judge was either perverse or impossible. The appellate court is not duty-bound to pass a suitable interim order pending the trial of the suit. As to Wander v Antox, the Supreme Court said:
35. … This judgment has been guiding the appellate courts in the country for decades while exercising their appellate jurisdiction considering the correctness of the discretion and jurisdiction exercised by the trial courts for grant or refusal of interlocutory injunctions.
36. Though the learned Judges of the Division Bench of the High Court have on more than one occasion referred to the judgment of this Court in Wander Ltd. (supra), they have not even, for namesake, observed as to how the discretion exercised by the learned Single Judge was exercised arbitrarily, capriciously or perversely.
7. We have noted this at the forefront for two reasons. First, we believe the principle enunciated in these two cases constrains to a considerable extent, although perhaps not entirely, the extent of our ability to interfere with an impugned order such as this one. Should we find that the impugned order is a plausible view, one that is not arbitrary, capricious or, in the legal understanding of the term, ‘perverse’, then in appeal we should not — indeed cannot — interfere. In those circumstances, we cannot substitute an alternative view or order for that of the learned Single Judge. The second aspect affects the Plaintiff in appeal before us, represented by Mr Seervai. Before the learned Single Judge, he would undoubtedly have had to show that all three wellestablished ingredients or components for ad-interim relief were met: a strong prima facie case, that the balance of convenience favours the Plaintiff, and demonstrating irretrievable prejudice if relief was denied. Once that discretion was exercised at the adinterim stage by the learned single Judge, in appeal, the burden on Mr Seervai is much heavier following the Wander v Antox principle. For Mr Seervai must now show that, despite that long-understanding principle of law, we must exercise our discretion and must grant the ad-interim relief refused by the learned Single Judge. This requires Mr Seervai to now make out an overwhelming prima facie case. It is not enough for him to merely demonstrate that a view and conclusion different from that of the learned Single Judge is possible, but to show that the relief he seeks is the only possible view, that the impugned order is not even remotely plausible, and therefore the learned single Judge fell into error. As we shall presently see, and for the reasons that follow, despite a day-long hearing, we are not persuaded at the end of all this that the Plaintiff has succeeded in discharging this obligation.” (Emphasis both in the original and now supplied)
4. No doubt this principle of law will apply to the present case. It therefore casts now a duty on the Appellant before us to demonstrate that the view that Chagla J took was not even reasonably possible. On two limited grounds we find to the contrary; we will address those presently. But, in sum, our finding is that not only was Chagla J’s view eminently reasonable and possible, but it was the only view that could have been taken in the facts and circumstances of the case.
5. Just two or three facts and documents will suffice. On 6th August 2010, Defendant No. 3, Mumtaz, made an affidavit in this very suit. She said that she was placing on record that during the pendency of the suit she and Defendant No. 4 would “not dispose of and/or create third party rights in respect of any of the properties standing in their name.”
6. This affidavit was presented to Justice R Y Ganoo J who made an order on it on 11th August 2010, a copy of which is at pages 78 to 79 and is reproduced below. “1. Counsel for the defendant nos. 3 and 4 states that affidavit dated 6.8.2010 has been filed for the purpose of making certain statements by way of ad-interim arrangement. Original is not on record as of today. Copy of the same tendered by the Counsel for the plaintiffs is taken on record. Statements made in the said affidavit are accepted and that is how the ad-interim application stands disposed of.
2. Motion stands adjourned to 4.10.2010.
3. Parties to complete pleadings in the meantime.
4. If plaintiffs want to apply for ad-interim reliefs in terms of the motion against defendant no. 2 they are free to serve defendant no. 2 give 48 hours notice and then apply for adinterim.”
7. What is the nature of the order that Ganoo J passed? Ms Karnik would have it that by her affidavit Mumtaz sought to ‘create a charge’ on one of the properties within the meaning of Section 100 of the Transfer of Property Act. Consequently, she submits, Ganoo J’s order only accepts the creation of that charge. The submission needs only to be stated to be rejected. Section 100 of the Transfer of Property Act says this: “100. Charges.—Where immoveable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to such charge. Nothing in this section applies to the charge of a trustee on the trust property for expenses properly incurred in the execution of his trust, and, save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge.”
8. The Section relates to transactions inter partes or statutory operation, not acts of the Courts. The injunction is against two individual, Defendants Nos 3 and 4, from transacting with any properties that stood in their name. It makes no difference that this was offered as an undertaking. It could as well have been an injunction in invitum. It can hardly be suggested that an injunction of the court creates a charge within the meaning of Section 100. The reason this argument is adopted is because the Appellants transacted with Mumtaz to acquire one of the properties in question after Ganoo J’s order by an Agreement of Sale of 15th September 2015. This document is from page 181 of the Appeal paper book. The short point is that given the injunction by Ganoo J in this very suit could Mumtaz have entered into any such transaction with anyone? There is also an order of Gavai J in criminal proceedings, but which says that none of the parties would deal with the property in any manner and would maintain status quo. We leave aside the order of Gavai J. Even without that order, the order of Ganoo J accepting Mumtaz’s undertaking was enough. We believe that Ms Karnik is entirely in error when she submits that the injunction did not attach to a property, or at any rate not only to a property. It attached to two persons and restrained them (at their own volunteered instance) from dealing with any of those properties.
9. For these reasons, it is also not possible therefore to accept the argument or submission that the Appellants are transferees for consideration without notice.
10. Ms Karnik’s submission that one should look to the nature of the plaint does not impress us at all. We are concerned here with something that is far more fundamental. namely the sanctity of orders of the court. These are not to be treated as suggestions. Parties are not at liberty to offer undertakings and then act in breach of them thereby turning orders that accepted the undertakings into so much dust.
11. Ms Karnik relies on the decisions of Bapurao Dajiba v Govind Kale,[8] ML Abdul Jabbar Sahib v MV Venkata Sastri & Sons & Ors,[9] 8 AIR 1950 Nagpur 117.
and Abdul Ghaffar Khan & Anr v Ishtiaq Ali & Ors.10 There is no quarrel with the propositions in these judgments, but they do not address the issue that is before us. None of them dealt with an injunction of a court being treated as a charge under Section 100.
12. On the other hand, we have from Mr Cama reliance on the decision of a division bench of this Court in Prakash Govind Ram Ahuja vs Ganesh Pandharinath Dhonde & Ors.11 In paragraph 97, the division bench said that a transfer made in violation of an injunction is no transfer in law. Such an alienation is illegal and is not binding. It confers no right, title, or interest. Later, that court said that a transaction effected during a lis pendens does not get tainted with illegality. It remains valid but subject to the outcome of the litigation. Finally, the division bench said a transfer made during a lis pendens is materially different from a transfer made in violation of an order of the court. This position is reiterated and the division bench later said that even subsequent transferees could not get a better or improved title.
13. We believe Ms Karnik’s submission might suffer from the law of unintended consequences. If the principle that she canvasses is to be accepted, then even receivership is immaterial, and a party is always at liberty to transact a property that is in custodia legis. An order of an injunction cannot logically stand on any other footing. An order of a court is an order of a court, and it cannot be allowed to be undermined. Nothing strikes at the authority of a court as much as a refusal or a failure to abide by its orders. We are being asked 10 AIR (30) 1943 Oudh 354. 11 2016 SCC OnLine Bom 8884: (2016) 6 Bom CR 262. today to hold that precisely such a violation by Mumtaz is perfectly all right and indeed is not illegal. This is in the teeth of settled law.
14. The decision of the division bench in Prakash Govindraj Ahuja is by no means a solitary instance. It follows a long line of decisions: Keshrimal Jivji Shah & Anr v Bank of Maharashtra & Ors,12 Municipal Council, Shirdi v Sau Soniya Devidais Patil & Ors,13 Satyabrata Biswas & Ors v Kalyan Kumar Kisku & Ors,14 Surjit Singh & Ors v Harbans Singh & Ors,15 Delhi Development Authority v Skipper and All Bengal Excise Licensees Association v Raghavendra Singh & Ors.17
15. In the last of these, All Bengal Excise Licensees Association, the Supreme Court said that once a party is found to have disobeyed a specific order, it is the status quo ante that would have to be restored. No litigant could be allowed to take an unfair advantage by committing breach of an interim order. There is no escape from the consequences of such a breach.
16. This is not simply a matter of whether the plaintiff could or should have moved in contempt. No question arises at the instance of these Appellants from assessing the nature of the claim in the plaint. The only point to consider is whether these Appellants could 12 2004 SCC OnLIne Bom 368: (2004) 3 Mah LJ 893: 2004 Comp. Cases (122) 831. 13 2008 SCC OnLine Bom 1879: 2009 (2) All MR 847. validly have transacted with Mumtaz after her undertaking to the court was accepted by Ganoo J. That is really all there is to it.
17. Having considered the rival submissions and carefully considered Chagla J’s judgment, we are not persuaded that it calls for the slightest interference or that it suffers from any infirmity at all. As we said earlier, in the facts and circumstances of the case, it is the only order that could possibly have been passed on such an application.
18. If there be any doubt as to a particular provision under which Chagla J could have fashioned this order, we believe this is completely set to rest by the Supreme Court decision in by paragraph 27 of the Supreme Court decision in All Excise Bengal Licensees Association. We read that paragraph to mean that it is the duty of a court as a matter of policy — and we understand this to mean public policy — to set right a demonstrated wrong and to not allow the perpetuation of a wrongdoing. This is the inherent power available to every court under Section 151 of the Code of Civil Procedure, 1908, but it is also one that is to be exercised in the interest of justice and the public interest.
19. In this view of the matter, the Appeal is dismissed.
20. There will be no order as to costs.
21. In view of dismissal of Appeal, Notice of Motion and Leave Petition do not survive and they are disposed of as infructuous.
22. Ms Karnik states that there was interim protection granted by a previous division bench of this court at the ad-interim stage on 8th November 2019. She seeks a continuance. Given the facts of this case, we are not inclined to continue the ad-interim protection. There is no case made out in law at all. Equity lies against the Appellants. More than anything else, the application is an attempt to continue a subversion of the authority of the Court. Ms Karnik says that the Appellants have taken a loan and are paying EMIs. That is totally irrelevant. But if there was loan from a bank, it is inconceivable that full and proper title search was not done and that there was no public notice or none of the usual precautions were taken. Mr Karnik then says the Appellants could not possibly have known of Ganoo J’s order. Even that is wrong. Every person in this commercial capital who transacts with property knows or is must be presumed to know precisely what he or she is doing. It was the obligation of these Appellants to check that Mumtaz did in fact have marketable title, i.e., title that was unclogged. The document in question is not of the kind as would be made by a person who is illiterate. It is a formal agreement for sale with witnesses and the three Appellants have all signed in addition to the mandatory thumb print procedure. The amounts paid were by cheque as can be seen. Ms Karnik then says that even the share certificates were transferred to the name of Mumtaz and therefore the Appellants had no way of knowing. We would have expected the shares to stand in the name of Mumtaz. It is unreasonable to say otherwise. But as Mr Cama points out even a cursory check with the society would have revealed that orders of this court were notified to the society itself. As to Ms Karnik’s question about how the Appellants could have found out about orders of the court, perhaps the less said the better. This is not the only property in litigation and routine checks are conducted in a manner known to advocates about properties that are the subject matter of litigation. More particularly, as Mr Cama points out and perhaps in a very telling circumstance, the Appellants have made no application of any kind whatsoever nor brought any proceeding as at least as far as this record discloses against Mumtaz. The Appellants have got away with this for too long. A continued subversion and undermining of the sanctity of orders of this court cannot be tolerated. The Application for continuation of the ad-interim relief is rejected. (Gauri Godse, J) (G. S. Patel, J)