SAKETA VAKSANA LLP & ANR. versus KAUKUTLA SARALA & ORS. on 17 December 2019

1. The present Civil Appeals have been filed by the Appellantsto challenge the Interim Orders dated 14.08.2019 passed in I.A. No.E1/2019 and I.A. No. 2/2019 filed in CMA No. 646/2019 by the HighCourt of Telangana.

2. The factual background is that the Appellant – Developer andthe Respondent – Landowners entered into an Agreement of Sale datedF17.11.2017, whereby the Respondents agreed to sell agricultural landcomprising of 54 acres 13 guntas situated in Turkapalli Village,Shamirpet Mandal, Medchal-Malkajgiri District to the Appellant –Developer. The sale consideration was fixed at Rs. 46,00,000/- per acre.

The land was divided into 5 schedules, and each schedule of landGwas to be sold to the Appellant – Developer upon payment of theproportionate sale consideration.

Clause 7 of the Agreement dated 17.11.2017 stated that physicalpossession of the entire land was handed over to the Appellant –HDeveloper on the day of execution of the Agreement.

The Agreement of Sale dated 17.11.2017 was an unregistereddocument executed on a Stamp Paper of Rs. 100. The Stamp Duty onthis Agreement was paid by the Appellant – Developer on 27.08.2018.

3. Out of the total extent of land, the Respondents executed fourregistered Agreements of Sale cum General Power of Attorney withrespect to 36 acres 21½ guntas of land in favour of the Appellant –Developer. The first two Agreements of Sale were executed on03.01.2018; the third on 24.03.2018; and the fourth on 31.03.2018.

The Appellant – Developer submitted that it has paid Rs.17,25,00,000/- for the aforesaid four Agreements of Sale.

The Respondents have seriously disputed this submission, andstated that an amount of only Rs. 14,25,00,000/- was paid by theAppellant – Developer.

This gave rise to disputes between the parties for payment ofthe balance consideration for land admeasuring 17 acres 31½ guntas(“suit property”).

4. The Appellant – Developer filed a Suit for SpecificPerformance bearing O.S. No. 213/2018 seeking Specific Performanceof the Agreement of Sale dated 17.11.2017 before the XVI AdditionalDistrict and Sessions Judge, Ranga Reddy District (“Trial Court”).

The Appellant/Plaintiff prayed that the Respondents be directedto execute the Sale Deed for the suit property admeasuring 17 acres31½ guntas; and provide ingress and egress to the land admeasuring36 acres 21½ guntas for which the registered Agreements of Sale cumGPA had been executed.

5. The Respondents filed the Written Statement cum CounterClaim seeking payment of Rs. 2,55,72,500/- towards the balanceconsideration for the 36 acres 21½ guntas of land already transferredin favour of the Appellant – Developer. The Respondents furtherclaimed an amount of Rs. 1,00,00,000/- towards the damage causedby the Appellant – Developer to the suit property.

The said Suit is pending final determination before the Trial Court.

6. The Appellant – Developer filed two I.A.s in the Suit prayingfor Temporary Injunction under Order XXXIX Rule 1 and 2 of the CPCbefore the Trial Court.

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I.A. No. 766/2018 was filed for a temporary injunction restrainingthe Respondents from interfering with the peaceful possession andenjoyment of the Appellant – Developer over the entire landadmeasuring 54 acres 13 guntas.

I.A. No. 767/2018 was filed for a temporary injunction restrainingBthe Respondents from alienating or creating any third-party interest inthe suit property admeasuring 17 acres 31½ guntas.

7. In I.A. No. 766/2018, the Respondent/Defendants disputed thepossession of the Appellant – Developer over the suit propertyCadmeasuring 17 acres 31½ guntas. They produced a Rent Agreementto show that a parcel of land admeasuring 12,000 sq. feet was in thepossession of a third party.

However, in the Agreements of Sale executed by theRespondents in favour of the Appellant – Developer, it was mentionedDthat possession of the entire land admeasuring 54 acres 13 guntas washanded over to the Appellant – Developer at the time of the executionof the Agreement dated 17.11.2017.

The Trial Court passed an Interim Order dated 01.05.2019 in I.A.No. 766/2018 with respect to the prayer for injunction restraining theERespondents from interfering with the peaceful possession of theAppellant – Developer over the suit property, and held that the issuewith respect to possession of the suit property admeasuring 17 acres31½ could only be decided in trial.

FIn view of the aforesaid facts, the Trial Court held that theAppellant – Developer made out a prima facie case, and the balanceof convenience was in their favour. The Trial Court granted a temporaryinjunction restraining the Respondents from interfering with thepossession of the Appellant – Developer over the suit property excludingthe extent of 12,000 sq. feet.G

8. In I.A. No. 767/2018, the Trial Court vide Interim Order dated01.05.2019 granted a Temporary Injunction restraining the Respondentsfrom alienating or creating third party interest in the suit property tillthe disposal of the suit, subject to the Appellant – Developer depositingHthe balance sale consideration @Rs. 46,00,000/- per acre.

9. The Appellant – Developer filed two Miscellaneous Appealsbearing C.M.A. No. 535/2019 and C.M.A. No. 536/2019 before aSingle Judge of the High Court to challenge the Interim Orders passedby the Trial Court.

10. The Respondents filed a cross Miscellaneous Appeal bearingC.M.A. No. 646/2019 before the division bench of the High Courtpraying for setting aside the Temporary Injunction restraining them frominterfering with the peaceful possession of the Appellant – Developerover the suit property.

It is relevant to note that the Order dated 01.05.2019 passed bythe Trial Court in I.A. No. 767/2018 has not been challenged by theRespondent – Landowners.

11. A Single Judge of the High Court vide Interim Order dated22.05.2019 directed that the Temporary Injunction restraining theRespondents from interfering with the peaceful possession of theAppellant – Developer would extend to the entire suit property, includingthe parcel of 12,000 sq. feet of land.

The Single Judge vide a further Interim Order dated 22.05.2019directed that the injunction restraining the Respondents from creatingthird party rights in the suit property would operate, without the conditionof depositing the balance sale consideration.

12. In C.M.A. No. 646/2019, the division bench of the High Courtvide the impugned Interim Orders dated 14.08.2019 has set aside theOrder of Temporary Injunction dated 01.05.2019 passed by the TrialCourt in I.A. No. 766/2018.

The division bench held that there is no documentary evidenceto prima facie show that the Appellant – Developer is in physicalpossession of the suit property. Furthermore, the issue whether theAppellant – Developer has paid part consideration for the entire suitproperty was required to be determined in the trial. The division benchtook the view that the Appellant – Developer had not made out a primafacie case for grant of Temporary Injunction. The Respondents beingthe lawful owners of the suit property, granting such an injunction wouldcause irreparable loss and hardship to them.

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AConsequently, the Temporary Injunction restraining theRespondents from interfering with the peaceful possession of theAppellant – Developer in the suit property was vacated.

13. The Appellant – Developer has challenged the Interim Ordersdated 14.08.2019 by way of the present Civil Appeals.B

We have heard Mr. Neeraj Kishan Kaul, Sr. Adv. on behalf ofthe Appellant – Developer and Mr. Ranjit Kumar, Sr. Adv. on behalfof the Respondents, and perused the material on record.

14. The Appellant – Developer submitted that they haveCdeveloped and sold plots on the tract of land admeasuring 36 acres 21½guntas to third parties. It was prayed that unless an Agreement of Salewith respect to the suit property admeasuring 17 acres 31½ guntas isregistered in their favour, they cannot provide ingress and egress to theplots already sold by them. As a consequence, the purchasers of thoseDplots have been threatening to initiate criminal proceedings against theAppellant – Developer.

15. The Respondent – Landowners submitted that the Appellant– Developer has ingress and egress to the land admeasuring 36 acres21½ guntas, which has already been transferred. The Respondents hadEfiled a Counter Claim in the Suit before the Trial Court for payment ofthe balance sale consideration for 36 acres 21½ guntas of land whichhad already been transferred to the Appellant – Developer.

It was further submitted that the Appellant – Developer has notFpaid any consideration whatsoever with respect to the suit propertyadmeasuring 17 acres 31½ guntas. Consequently, the Agreement of Saledated 17.11.2017 stands cancelled qua the suit property.

16. We find that there are seriously disputed questions of factinvolved in this matter. The first issue is whether possession of the suitGproperty was at all handed over to the Appellant – Developer or not.

On the one hand, the Appellant – developer relied on Clause 7of the Agreement dated 17.10.2017 to show that possession of the suitproperty was handed over to them at the time of execution of theHAgreement.

On the other hand, the Respondents submitted that it was onlysymbolic possession which was given to the Appellant – Developer,while physical possession remained with the Respondent – Landowners.The Respondents averred that they are growing vegetables, and havea guest house, servant quarters and a shed on the suit property.

17. The second issue is whether part consideration for the suitproperty was paid by the Appellant – Developer to the Respondent –Landowners or not.

The Appellant – Developer submitted that it had paid a total ofRs. 17,25,00,000/- to the Respondents, and only Rs. 3,72,03,750/- wasthe balance payable for the suit property.

The Respondents however, submitted that the Appellant –Developer had paid only Rs. 14,25,00,000/-, and was still liable to payRs. 10,73,95,000/- towards the balance sale consideration for the entiresuit property, as well as some part of the land already transferred infavour of the Appellant – Developer.

18. During the course of hearing, the Senior Counsel for theAppellant – Developer made an offer to deposit Rs. 10,00,00,000/- inthis Court on a “without prejudice” basis. The Respondents however,rejected the said offer.

19. Since both the issues raised are seriously disputed which willbe decided during the course of trial, we are of the view that the Ordersdated 14.08.2019 passed by the division bench of the High Court donot warrant any interference.

The High Court has already granted a Temporary Injunctionrestraining the Respondents from alienating or creating third party rightsin the suit property till the disposal of the Suit. The interest of theAppellant – Developer has been sufficiently protected with respect toownership of the suit property.

20. In view of the aforesaid discussion, we affirm the Ordersdated 14.08.2019 passed by the division bench of High Court, wherebythe Temporary Injunction restraining the Respondents from interferingwith the possession of the Appellant – Developer over the suit propertyhas been vacated.

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A21. We have expressed no opinion on the merits of the matter,since the observations have been made at an interim stage of theproceedings.

22. We however direct that the hearing of O.S. No. 213/2018pending before the XVI Additional District and Sessions Judge, RangaBReddy District be expedited, and disposed of preferably within a periodof one year from today.

The Civil Appeals are therefore, dismissed.

Pending Applications if any, are accordingly disposed of.

COrdered accordingly.

Devika Gujral

Appeals dismissed.

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