9911796707
TMI Blog2022 (1) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... d of all right title and interest upon execution of the Sale Deed in 1989. The attachment was allowed only on 16th January, 1991 and it is in those circumstances, apparently unknown to the applicant vide mutation entry dated 15th February, 1992 against the bank s name to be entered in the 7/12 extract under the column of other rights . There is no wanton delay in approaching this court. The objections on the basis of the application being time barred, raised by Mr. Narvekar and Mr. Salunke cannot deprive the applicant of his rights. A suit must not necessarily be filed in view of Section 31 of the Specific Relief Act in the facts and circumstances of the case. The transaction as between late Chudasama and respondent nos.3 to 5 has its foundation in a classic case fraud viz. suppressio veri and suggestio falsi . Late Chudasama suppressed the truth of having sold the plot to the applicant for the respondent nos.3 to 5 and probably the liquidator. He falsely suggested that he was competent to sell the plot and he acted in this false statement by consenting to the sale. The fraud not only misled the Liquidator but also the court. The court was not appraised true set of facts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by all the respondents the main contestants are the purchasers of the property. FACTS : 2. The applicant, an individual, is said to be a resident of Pune and claims to have acquired the plot admeasuring 90 R bearing survey no.95/8, Old No.95/1/2 in village Susgaon, Taluka Mulshi, District Pune. The plot was acquired from the original respondent no.2 (late Chudasama) (sine deceased) and the applicant claims to be in possession as on date. He claims under a registered Sale Deed dated 9th October 1989. Late Chudasama is alleged to have perpetrated a fraud in collusion with some other respondents to secure the order and the sale certificate impugned in this application. It transpires that on 24th December 2014, this court allowed Official Liquidator s Report No.168 of 2013 (OLR) in terms of prayer clause (a), accepting the recommendations of the Official Liquidator. The OLR sought approval by a compromise proposal made by late Chudasama who had guaranteed a loan availed of by one M/s. Drillwell, a proprietary concern of one Vijay Mahajani. Since the principal debtor had not repaid the loan, the bank filed a recovery suit before the Civil Judge, Senior Division, Pune. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent no.2 and one Ankush Dandekar, a contesting party which in no uncertain terms, constitutes conveyance of the agricultural plots. The applicant claims to have purchased the property being an agriculturist himself. It is therefore contended that the Liquidator could not have acquired any title, late Chudasama having been divested of his right in the property in 1989. 5. Mr. Gaonkar, learned counsel appearing on behalf of the applicant submitted that late Chudasama appears to have played a fraud on the court apparently in collusion with respondents 3 to 5 and had led the Liquidator to believe that the plot was owned by him. Mr. Gaonkar submits that the plot was allegedly sold for a sum of ₹ 10 lakhs when the real value of the plot was about ₹ 1.30 crores. He submits that it is unbelievable that property of that value could have been sold at such a low price and that itself indicates fraud. He submits that the court was misled into believing that a compromise was arrived at between late Chudasama on one hand and respondents 3 to 5 on the other hand which would benefit the bank in liquidation inasmuch as the bank had an opportunity of recovering its dues by accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nte in the facts and circumstances of this case. 10. On behalf of respondent no.2, Mr. Narvekar submitted that the original respondent had expired and he now represents the legal heirs of late Chudasama. His submissions were limited to the point of maintainability of the application since according to him his clients have no personal knowledge of the various dealings of the respondent no.2 in relation to the plot. He submitted that for want of knowledge and alleged acts of respondent no.2, his submissions are restricted to whatsoever was stated on oath by late Chudasama in his affidavit in these proceedings. However, in principle, he submitted that the present application is liable to be dismissed. He submitted that there is great amount of delay in approaching this court. The applicant has not come forward with clean hands inasmuch as it is contended by the applicant that the plot was sold to the applicant in October 1989 and he became aware of the acquisition of plot by respondent nos.3 to 5 at least as of March 2015 but has filed the present application only in May 2017 more than two years after knowledge of the order passed by this court. In support of his contentions, he ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence, is not maintainable. 13. Mr. Salunke further submitted that the sale in favour of his clients has occasioned on 11th April, 2014 in fact the applicant had knowledge of this purchase at least as on 3rd May, 2014 because he made an application to the Talathi at Mulshi District, Pune, on 3rd May, 2015 seeking inclusion of his name in the land records. This submission is a proof of the fact that as purchaser he was claiming to be entitled to the plot. Apart from the application being beyond time, generally, speaking date of knowledge as of May 2014 cannot be disputed and in these circumstances, he contended that the only remedy the applicant has filed a suit under Section 31 of the Specific Relief Act. Mr. Salunke submits that the present application ought not to be entertained since the specific relief cannot be granted by virtue of the present application. 14. The next submission of Mr. Salunke is that the applicant should not be allowed to assail the sale in this manner. Article 59 of the Limitation Act would apply and that mandates a period of three years from the date of cause of action as the cut off period for filing the suit. The period of three years is to be com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchasers for value. Mr. Salunke therefore submitted that there is no occasion to entertain the present application for all the aforesaid reasons. 17. Mr. Gaonkar, in rejoinder submitted that the case of respondentnos.3 to 5 must be rejected since they have perpetrated a fraud ably assisted by late Chudasama. My attention was invited to Exhibit U to the application which is a Taba Sathekhat dated 4th July, 2013. This document he submitted was evidence of agreement to pay a sum of ₹ 3 lakhs over and above the sum of ₹ 10 lakhs paid to the Liquidator. This agreement clearly evidences the fact that respondent nos.3 to 5 had taken search of all prior documents and the respondent nos.3 to 5 would obviously have discovered the sale deed under which the applicant claims. The fact that respondent nos.3 to 5 proceeded with the alleged transaction without considering this document speaks volumes of the said respondents conduct. Assuming the said respondents were unaware of the prior sale, if respondent nos.3 to 5 had taken proper search of the land records, they would have noticed sale deed being registered in favour of the applicant. Apparently, the respondents proceeded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad not made any enquiries and hence did not cause to enter the name of the applicant. He admits that he was a guarantor in respect of the loan taken by Vijay Mahajani but he contends that he has never mortgaged the plot or any plot thereof to the bank or execute any document in relation to the property in favour of the bank. 20. According to late Chudasama he came to know that the present applicant had given his consent in writing for handing over possession of the property to the Bank of Karad. The deponent also states that applicant did not raise objections to the attachment of the property by the bank. He contends that the applicant had knowledge of the developments. Meanwhile, the bank s name had been entered in the 7/12 extracts as a holder of other rights . In 2014, officers of the bank informed him that the plot had been attached and the bank s name has been entered as owner sometime in 1992. He was told that the property was required to be sold and that his signature would be required for the same. The deponent has further stated that the bank allegedly informed him that if he does not cooperate, it would amount to contempt of court. He was allegedly assured by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sale deed is also admitted. Thus, the document is also in compliance of the requirement of the Registration Act. What one really has to consider is whether given the applicants status as owner of the property, late Chudasama could have, under any circumstances, offered the same for sale to respondent nos.3 to 5 and in my view the answer must be in the negative. There is of course the contention of late Chudasama contained in his affidavit in reply that the applicant had consented to the sale of the plot in order to enable the respondent no.2 to be discharged from his liability as guarantor. The so-called consent appears to be a figment of the deponent s imagination. Nothing on record indicates any intention of the applicant to consent the sale and indeed which cannot, for the simple reason that the applicant is constituted absolute owner of the property upon the execution and registration of the sale deed. Late Chudasama had no legal authority to support the sale document in favour of the respondent nos.3 to 5. 23. As we have seen from the Taba Sathekhat late Chudasama entered into an agreement with respondent nos.3 to 5 probably suppressing the sale deed in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idator was null and void. In fact, the recovery suit by the bank was filed only on 23rd January, 1990 and the attachment was clearly questionable. What is surprising is that the Liquidator has executed a sale certificate without holding the character of the owner of the property. As a consequence of attachment, late Chudasama was incapable of effecting the sale since he lacked any right in the property. In that view of the matter, there is no doubt that having perpetrated a fraud on the Liquidator and the court, late Chudasama has also misled the respondent nos.3 to 5 into behaving that they would acquire proper right, title and interest to the plot. The conduct of respondent nos.3 to 5 in ably assisting the respondent no.2 to suppress the real transaction between the parties is also remarkable. However, what we are now concerned with is whether the relief sought by Mr. Gaonkar ought to be granted. On one hand, there is the issue of delay. Mr. Salunke s firm opposition to condonation of delay and there is the submission of Mr. Khandeparkar that the amount received by the Liquidator cannot be subject matter of any restitution since this has already been appropriated. That is an aspe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation before the Talathi to record his name. Later, pursuant to applications under the RTI Act, he learnt from the records collected that the records had been transferred to this court pursuant to the order of winding up. This led to him to learn of further developments. He then sought certified copies of the entire suit proceedings as stated in paragraph 4(p), 4(q) and 4(r). 29. No doubt, there is no separate prayer for condonation of delay. However, I am satisfied that there is no wanton delay in approaching this court. The objections on the basis of the application being time barred, raised by Mr. Narvekar and Mr. Salunke cannot deprive the applicant of his rights. The legal position that fraud vitiates all is no longer res integra. In S.P. Chengalvaraya Naidu v/s. Jagannath (1994) 1 SCC 1 and A.V. Papayaa Sastry and Ors. v/s. Government of A.P. Ors. (2007) 4 SCC 221 the court had held that fraud vitiates all judicial acts whether in rem or in personam and that the order or decree obtained by fraud is treated as nullity whether by court of first instance or by the final court. The order and the Liquidator s Report in this case is clearly obtained by fraud and is vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chment levied. He followed the proceedings to the office of the Liquidator and this court and has in my view taken the right steps. 32. I am not persuaded to hold that a suit must necessarily be filed in view of Section 31 of the Specific Relief Act in the facts and circumstances of the case. The transaction as between late Chudasama and respondent nos.3 to 5 has its foundation in a classic case fraud viz. suppressio veri and suggestio falsi . Late Chudasama suppressed the truth of having sold the plot to the applicant for the respondent nos.3 to 5 and probably the liquidator. He falsely suggested that he was competent to sell the plot and he acted in this false statement by consenting to the sale. The fraud not only misled the Liquidator but also the court. The court was not appraised true set of facts. The Liquidator sought to rely upon the orders passed in other Liquidator s Reports whereby in order to arrive at a settlement of the claims against the company, a comprise proposed was accepted by the court. 33. The Liquidator s approach was one of achieving closure to the suit and recovery proceedings. In these circumstances, it is evident from the deposition of late Chud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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