G H SHREE CHAITANYA CONSTRUCTIONS versus SUDHIR POONAMCHAND PARAKH & ORS. on 17 July 2019

SUPREME COURT REPORTS

[2019] 9 S.C.R.

ASHREE CHAITANYA CONSTRUCTIONS

v.

SUDHIR POONAMCHAND PARAKH & ORS.

(Civil Appeal No.5620 Of 2019)

B JULY 17, 2019

[R.F. NARIMAN, SANJIV KHANNA AND SURYA KANT, JJ.]

Natural Justice – Right to be heard – Suit for specificperformance against several members of one family/defendants –Rejected by the Trial Court – However, High Court by judgmentCdated 14.2.2018 decreed in favour of the plaintiff – RespondentNo.1/defendant No. 5 filed review petition and stated that in theappeal before the High Court he never appeared and he wasrepresented by a counsel who was not appointed by him – HighCourt allowed the review petition and recalled its judgment – OnDappeal, held: Advocate, who appeared for respondent no.1, didnot make any argument ‘collusive’ in nature or against the respondentno.1 – Even in equity, the respondent No.1 has no case – Variousaffidavits were filed by the relatives of respondent No.1 stating thatthe said advocate was agreed to be engaged by all the familymembers/close relatives – Also, despite service of appeal, respondentENo.1 chose not to appear before High Court, now he cannot saythat he was not heard – Impugned Judgment of the High Courtrecalling its judgment dated 14.2.2018 set aside.

Allowing the appeal, the Court

FHELD: 1. It is clear that notices of the appeal wererepeatedly served on respondent No.1. The first time whenservice was effected, the bailiff remarked that since RespondentNo.1 was not found at the address at which he resides, servicewas effected by “affixation on the door” of his residence. TheHigh Court still felt that it was necessary under the rules to effectGproper service, as a result of which, by its order, it directed thatservice be made by Registered Post A.D. This was ultimatelydone and notices were returned unserved with postal remarks“unclaimed, hence returned to sender”. After this happened, steps were then taken for service through paper publication,which was duly done by a notice issued in the Newspaper“Prabhat” which has a wide circulation in Pune. Pursuant to allthese steps, by a formal order in First Appeal No. 295 of 2013, itwas stated that service to the respondents was complete. Ascorrectly contended by the appellant that after service is effected,had respondent No.1 not appeared at all, he could not havecomplained of the same since, after service has been effected,he has chosen not to appear, and this being the position, he cannotthen turn around and say that as he was not heard and that theappellate judgment should be set aside and the appeal restored.This Court has also perused the impugned judgment dated14.02.2018. A large portion thereof is the recording of thesubmissions of ‘D’ Senior Advocate, on behalf of RespondentNo.1, which are all submissions ranging from maintainability ofthe specific performance suit; the MoU being unstamped andtherefore not admissible in evidence; and otherwise that on factsit would be inequitable to enforce specific performance in favourof the plaintiff. On the facts of the case, not a single argumenthas been pointed out which could be said to be “collusive” innature; that is while appearing to defend the Respondent No.1,an argument was made in the nature of a “hit wicket” which wouldreally favour the plaintiff. [Paras 10, 11] [1057-B-H]

2. It may also be pointed out that even in equity, theRespondent No.1 has no case. This Court has perused the affidavitof ‘V’ dated 26.07.2018 in which he states that being a son-in-law/close relative of one of the brothers of Respondent No.1, hewas in charge of and handling this litigation. According to him,he was given an express oral assurance by all the brothers,including Respondent No.1, to engage the services of ‘MS’,Advocate who would then brief a Senior Advocate and appear onbehalf of Respondent No.1. ‘MS’ in an affidavit of the same date,has affirmed these facts. Even otherwise, the father ofRespondent No.1 has also, by an affidavit dated 02.08.2018 statedthe same thing which has been agreed to by all the familymembers/close relatives, save and except Respondent No.1.There is no reason to disbelieve these affidavits. [Para 12][1058-A-C]

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A3. It is clear that had the Respondent No.1 not chosen toappear at all, the judgment dated 14.02.2018 could not possiblyhave been recalled. Therefore, even if the submissions made by‘D’ in the appeal are discounted and the case of Respondent No.1is accepted that he never, in fact, appointed either ‘MS’ or ‘D’ torepresent him, since the result of the appeal would have beenBthe same. Thus, the impugned judgment is set aside.[Para 14] [1058-G-H; 1059-A]

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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5620of 2019

CFrom the Judgment and Order dated 27.09.2018 of the High Courtof Judicature at Bombay in Review Petition No. 3 of 2018 in First AppealNo. 295 of 2013

R. Basant, Sr. Adv., Makarand D. Adkar, Braj K. Mishra, VijayKumar, Ms. Bharti Tyagi, Advs. for the Appellant.

DMrs. Anjani Aiyagari, Ajay Choudhary, Advs. for the Respondents.The Judgment of the Court was delivered by

R. F. NARIMAN, J. 1. Leave granted.

2. The present dispute arises out of a specific performance suitEthat had been filed on 15.10.2010 by the plaintiff against several membersof one family. There were 8 defendants in all. However, only DefendantNo.5, who is the Respondent No.1 in this appeal, filed a written statementon 04.02.2011. Defendant No.5 neither led any evidence nor did heavail of any opportunity to cross-examine the plaintiff before the trialCourt. The Trial Court, by its judgment dated 07.11.2012, rejected theFprayer for specific performance and instead directed that a sum ofRs.2,26,40,370/- be paid as refund of part consideration already given.The First Appeal against the aforesaid judgment was filed by the plaintiffon 03.04.2013.

3. Meanwhile, in an inter se litigation between the members ofGthe defendants family, a partition suit had been filed by the presentRespondent No.1 being O.S. No. 1298 of 1999 against the originalDefendant Nos. 1-4 and certain others for partition of as many as 22properties. The property with which the specific performance suit isconcerned is stated to be Item No.7 in the Schedule that is appended to H

this suit. In this suit, an interim injunction had been passed restrainingthe defendants from creating third party rights. This was done on22.03.2007. Since Suit No. 1298 of 1999 stood dismissed for non-prosecution on 18.11.2014, the said interim injunction would standautomatically vacated.

4. Meanwhile, a Memorandum of Understanding (MoU) wasentered into between the plaintiff and Defendant Nos. 1-8. What isimportant to note is that the present Respondent No.1, when he filed hiswritten statement in the specific performance suit, admitted the factumof this MoU.

5. An appeal that had been filed against the trial Court judgmentin the specific performance suit was heard and finally decided by theHigh Court, in which the trial Court judgment was set aside and specificperformance decreed in favour of the plaintiff. It may be mentionedthat in this appeal, one Mr. Mandar Soman and Mr. P.S. Dani, learnedSenior Advocate, appeared for the respondent No.1 and submitted anumber of arguments and cited a number of judgments in favour ofRespondent No.1. These have all been noted in the judgment dated14.02.2018, and after turning down Mr. Dani’s arguments, the High Courtallowed the appeal.

6. The Respondent No.1 then filed a review petition against theaforesaid judgment, in which it was stated that he received a copy of theHigh Court judgment dated 14.02.2018 two days later, i.e. on 16.02.2018,and was shocked to find that he was represented by counsel who he hadnever appointed. It is his case before us, and this is not disputed by Mr.Basant, learned Senior Advocate for the appellant, that there was, infact, no written Vakalatnama executed by Respondent No.1 in favour ofMandar Soman, who appeared to represent the Respondent No.1 in theappeal before the High Court.

7. This being the case, the review petition was disposed of by theimpugned judgment dated 27.09.2018, in which the High Court recalledits judgment of 14.02.2018 on the ground that since it is clear that theadvocate who appeared on behalf of Respondent No.1, appeared withoutany written Vakalatnama (and appeared merely on alleged oralassurances, said to be given by Respondent No.1) the order must berecalled and Respondent No.1 must be heard. The High Court, therefore,allowed the review petition and restored the appeal.

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A8. Mr. R. Basant, learned Senior Advocate, appearing for theappellant, has meticulously taken us through the relevant judgments anddocuments, and has argued that there can be no dispute as to the factthat the Respondent No.1 was duly served in the appeal. If despiteservice he had chosen not to appear at all, then obviously no ground forreview would have been made out. Also, he was at pains to point outBthat nowhere in the review petition had Respondent No.1 stated thatupon reading the judgment the arguments made by Mr. Dani were againstthe interest of his client. He pointed out that as many as five points hadbeen made by Mr. Dani, beginning from maintainability of the suit toreasons for non-grant of specific performance, all of which had first toCbe dealt with by the High Court judgment dated 14.02.2018 before itcould upset the trial Court judgment. According to him, therefore, thenon-filing of Vakalatnama by Respondent No.1 in favour of Mr. MandarSoman should not be given any heed as no question of collusion could bemade out on the facts of this case. He also argued that, in any event, thenon-filing of a Vakalatnama is at best an irregularity which can be curedDlater on. Quite obviously, if the judgment had been given in favour ofRespondent No.1 and this was pointed out, the Respondent No.1 wouldforthwith have cured such irregularity by doing the needful. Therefore,on facts, according to him, the High Court was incorrect in allowing thereview petition.E

9. Ms. Anjani Aiyagari, learned counsel, appearing for theRespondent No.1, has strenuously contended that her client, on the onehand, and his father and brother on the other, were at loggerheads throughout as a result of which, as a matter of fact, in contempt proceedingsbetween them, Mr. Dani appeared for the family members/close relativesFof Respondent No.1 against Respondent No.1, who was the contemptpetitioner in those proceedings; she referred to and relied upon an orderdated 18.04.2006 in this behalf. According to her, the only argumentthat should have been made and that was never made on behalf ofRespondent No.1 in the appeal, is the fact that the property, which is thesubject-matter of the specific performance suit, could not possibly haveGbeen alienated inasmuch as there was an interim injunction interdictingthe same. This argument has never been made, and had it been made,according to her, the result in the appeal would have been againstdecreeing specific performance. She also stated that earlier orders thatwere passed would show that the parties were exploring a settlement,Hand that, for this reason, the Respondent No.1 could not appear is another important factor to be taken into account before the judgment dated14.02.2018 was passed. Also, according to her, in point of fact, theRespondent No.1 did not have any knowledge of the appeal proceedingand, therefore, this Court ought to be not to interfere with the impugnedjudgment, which has only ultimately done justice in favour of her client.

10. Having heard the learned counsel for both parties one thingstands out. What is clear is that notices of the appeal were repeatedlyserved on respondent No.1. The first time when service was effected,the bailiff remarked that since Respondent No.1 was not found at theaddress at which he resides, service was effected by “affixation on thedoor” of his residence. The High Court still felt that it was necessaryunder the rules to effect proper service, as a result of which, by its orderdated 27.10.2015, it directed that service be made by Registered PostA.D. This was ultimately done on 03.11.2015, and notices were returnedunserved with postal remarks “unclaimed, hence returned to sender”.Not only this, after this happened, steps were then taken for servicethrough paper publication, which was duly done by a notice issued in theNewspaper “Prabhat” which has a wide circulation in Pune, on18.01.2016. Pursuant to all these steps, by a formal order dated22.02.2016 in First Appeal No. 295 of 2013, it was stated that service tothe respondents was complete.

11. It is in this backdrop that the present appeal needs to beconsidered. As correctly contended by Mr. Basant, after service iseffected, had respondent No.1 not appeared at all, he could not havecomplained of the same since, after service has been effected, he haschosen not to appear, and this being the position, he cannot then turnaround and say that as he was not heard and that the appellate judgmentshould be set aside and the appeal restored. We have also perused theimpugned judgment dated 14.02.2018. A large portion thereof is therecording of the submissions of Mr. Dani, learned Senior Advocate, onbehalf of Respondent No.1, which are all submissions ranging frommaintainability of the specific performance suit; the MoU being unstampedand therefore not admissible in evidence; and otherwise that on facts itwould be inequitable to enforce specific performance in favour of theplaintiff. On the facts of the case, not a single argument has been pointedout which could be said to be “collusive” in nature; that is while appearingto defend the Respondent No.1, an argument was made in the nature ofa “hit wicket” which would really favour the plaintiff.

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A12. It may also be pointed out that even in equity, the RespondentNo.1 has no case. We have perused the affidavit of Mr. Vinit Jain dated26.07.2018 in which Mr. Jain states that being a son-in-law/close relativeof one of the brothers of Respondent No.1, he was in charge of andhandling this litigation. According to him, he was given an express oralassurance by all the brothers, including Respondent No.1, to engage theBservices of Mandar Soman, Advocate who would then brief a SeniorAdvocate and appear on behalf of Respondent No.1. Mr. Soman, in anaffidavit of the same date, has affirmed these facts. Even otherwise,the father of Respondent No.1 has also, by an affidavit dated 02.08.2018stated the same thing which has been agreed to by all the family members/Cclose relatives, save and except Respondent No.1. We have no reasonto disbelieve these affidavits. The only point in favour of the RespondentNo.1 is the fact that there is no written Vakalatnama in favour of thecounsel who represented him in the above appeal. The fact that Mr.Dani appeared against him in a contempt petition filed by RespondentNo.1, which was disposed of in 2006, does not lead us very far. At thatDpoint of time, when the parties were at loggerheads, Mr. Dani did appearedfor family members against the Respondent No.1. However, when theparties i.e. the Respondent No.1’s father and his brothers were all co-defendants in a specific performance suit in which their interest wascommon (that is, to oppose specific performance) it is difficult toEappreciate that Mr. Dani’s appearance of 2006 should be put against hisappearing in 2018 when Mr. Dani contested the specific performancesuit tooth and nail.

13. We also fail to appreciate Ms. Anjani Aiyagari’s other argumentthat had an argument based on the injunction granted in the partition suitFbeen made, the appeal would have been decided differently. As correctlypointed out by Mr. Basant even this is incorrect. Para 33 of the judgmentdated 14.02.2018 makes it clear that this aspect was argued andconsidered. The point about the parties exploring settlement earlier tothe impugned judgment is again neither here nor there inasmuch asobviously when such settlement talks failed, the appeal had to be setGdown for hearing.

14. It is clear that had the Respondent No.1 not chosen to appearat all, the judgment dated 14.02.2018 could not possibly have beenrecalled. Therefore, even if we were to discount the submissions made H

SHREE CHAITANYA CONSTRUCTIONS v.SUDHIR POONAMCHAND PARAKH [R.F. NARIMAN, J.]

by Mr. Dani in the appeal and accept the case of Respondent No.1 thathe never, in fact, appointed either Mr. Soman or Mr. Dani to representhim, since the result of the appeal would have been the same, we setaside the impugned judgment and allow the appeal.

Appeal allowed.

Ankit Gyan

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