Janki Vashdeo Bhojwani vs Indusind Bank LTD.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2004 Supreme(SC) 1528

SUPREME COURT OF INDIA
D.M.Dharmadhikari : H.K.Sema
Janki Vashdeo Bhojwani And Another
Versus
Indusind Bank Limitedand Another
Case No. : 6790 of 2003
Date of Decision : 12/6/04
Advocates Appeared: Mukul Rohtagi : E.R.Kumar : Sandeep Parekh : Sumit Goel : P.G.Parekh : P.H.Parekh : A.M.Singhvi : Simran Mehta : Pranab Kumar Mullick : K.Radhakrishnan : Amit Mishra : S.K.Agnihotri

Headnote:
A. Civil Procedure Code, Order 3 Rule 1 - Power of attorney cannot be allowed to appear and depose as a witness on behalf of the principal He can appear only as a witness in his personal capacity regarding the acts done by him on behalf of the principal [Para 8]
B. Foreign Exchange (Immunity) Scheme, 1991 -The Scheme only protects from prosecution under FERA and income tax. It does not prohibit from disclosing the sources. Furthermore, the remittance, so received by the appellants, could not be described as income, much less an independent income.( Para 21 )

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points:

A power of attorney cannot appear and depose as a witness on behalf of the principal in a civil dispute. The power of attorney holder can only appear as a witness in their personal capacity regarding acts done by them on behalf of the principal [Para 8].
The Foreign Exchange (Immunity) Scheme, 1991, only provides protection against prosecution under certain laws (such as FERA and income tax) and does not prohibit the disclosure of the sources of remittance. The remittances received by the appellants cannot be classified as income, much less an independent income [Para 21].
The appeal was against a judgment that required the tribunal to determine whether the appellants had a share in the property, whether they were co-owners at the relevant time, and whether the property was their residence when possession was taken. The tribunal was instructed to allow evidence and to establish whether the appellants had contributed from their independent income [Para 4].
The appellants' claim to have contributed to the purchase price and to be co-owners was not sufficiently proven. The evidence, including income tax returns and foreign remittance documents, did not establish that the source of funds was from their independent income or that they had a share in the property at the relevant time [Paras 22-26].
The appellants failed to discharge the burden of proof that they had contributed to the purchase from their own independent income and that they were co-owners of the property. The evidence relied upon was either interpolated, insufficient, or did not demonstrate independent source of income [Paras 22-26].
The use of a power of attorney holder to depose on behalf of the appellants was deemed improper, as deposing in a witness capacity is a personal act that cannot be delegated. The appellants were required to personally enter the witness box to prove their case, which they failed to do [Paras 9-13].
The conduct of the parties indicated a lack of candor, and the appellants' claims were viewed with suspicion, suggesting an attempt to avoid liability or sale of the property [Para 15].
The evidence regarding foreign remittances and gifts was scrutinized, and it was concluded that such funds did not constitute independent income of the appellants. The appellants did not adequately disclose or prove the source of these funds [Paras 27-29].
The overall conclusion was that the appellants did not establish their claim of co-ownership or contribution from independent income at the time the decrees were passed. Therefore, the appeal was dismissed with costs [Para 29].
The tribunal's errors included framing issues inconsistent with judicial directions and allowing a power of attorney holder to testify on

JUDGMENT

H.K. SEEMA, J.

This appeal is directed against the judgment of the Bombay High Court dated 23-4-2003. The appeal has been heard at length by a Bench in which one of us was a Member, Sema, J. and by an order dated 10-2-2004 reported as Janki Vashdeo Bhojwani and Another v. Indusind Bank Ltd. and others, (2004) 3 SCC 584) it was remitted to the Tribunal with the following directions in paragraphs 24 at Page SCC 587:

"In our view, it is essential, before any further orders can be passed to first decide whether or not the appellants have a share in this property. We therefore remit the matter back to the Debt Recovery Tribunal to record a finding whether or not on the date the decrees were passed, the appellants were co-owners of the property at 38, Koregaon Park, Pune and if so, to what extent. In so deciding the Debt Recovery Tribunal will undoubtedly ascertain whether the appellants had any independent source of income and whether they had contributed for purchase of this property from their own independent income. The Debt Recovery Tribunal will also decide whether this property was the residence of the appellants at the time possession was taken. The Debt Recovery Tribunal shall permit the parties to lead evidence, both oral and documentary. It must be clarified that the burden of proving that the appellants have a share in the property will be on the appellants. The Debt Recovery Tribunal shall then forward its decision to this Court within a period of six months from today."

(Emphasis supplied)

2. Avoiding prolixity, but at the risk of repetition the directions were founded on the following facts:

The 1st appellant is the wife of the 5th respondent and the 2nd appellant is the wife of the 2nd respondent.

3. The respondent-bank extended loan facilities to the 6th and 7th respondents, M/s Bhojwani Hotels Pvt. Ltd. and Hotel Amir Pvt. Ltd., which are run by respondent Nos. 2 to 5 namely Dr. Laxmikant Rewachand Bhojwani, Mr. Sanjay Laxmikant Bhojwani, Mr. Romy Laxmikant Bhojwani and Mr. Vashdeo Rewchand Bhojwani. The loan facilities were to the extent of Rs. 22 crores in one case and Rs.3.75 crores in the other. Respondents 2 to 5 were also guarantors and some of the properties belonging to the parties have been mortgaged to the bank. Initially, Plot No. 38, Koregaon Park, Pune was also stated to have been mortgaged to the bank. It is now admitted by the respondent-bank that the said plot was not mortgaged to the bank.

4. As the loan had not been repaid, the respondent-bank filed a suit against 2nd and 7th respondents on 3.10.2000, OA No. 159-P of 2001 before the Debt Recovery Tribunal (hereinafter referred to as the DRT) for recovery of a sum of Rs.3.86 crores. The first respondent-bank also filed another suit against respondent nos. 2 to 6 and one M/s Progressive Land Development Corporation, OA No. 160-P of 2001 for recovery of a sum of Rs.27.5 crores. M/s Progressive Land Development Corporation is a partnership firm of which the appellants are partners, along with others. The DRT by an order dated 11-12-2000 passed an injunction order in an application made in OA No. 160-P of 2001. The plot No. 38, Koregaon Park, Pune was one of the properties which the respondents were restrained from alienating. The DRT also passed a decree on 13-9-2001 in OA No. 159-P of 2001 in favour of the respondent-bank in which the property at 38, Koregaon Park, Pune was shown as one of the mortgaged properties. A recovery certificate was also issued by the DRT and pursuant thereto the properties were attached on 8.11.2001 in which the property at 38, Koregaon Park, Pune was also attached. Thereafter, pursuant to attachment, a public notice was published in the Times of India of 25.1.2002 publication, notifying that the properties of the second respondent have been attached.

5. It is only at this stage, the appellants have filed objections before the DRT against the attachment of the residential property at 38, Koregaon Park, Pune on 16.4.2002,

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