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2023 Supreme(Kar) 1122

IN THE HIGH COURT OF KARNATAKA
H.P. Sandesh, J.
Suvalal Jain – Appellant
Versus
K.N. Puneeth – Respondent
M.F.A. No. 2082/2023 (CPC)
Decided On : 21-07-2023

Advocates appeared:
Rajeswara P.N., Advocate, M.Shivaprakash, Advocate

The court established that the determination of property rights and the validity of a sale deed obtained through alleged fraud requires a full trial, and that temporary injunctions can be granted to prevent potential harm during litigation.

Headnote:

INJUNCTION - TEMPORARY INJUNCTION IN PROPERTY DISPUTE - Order 39, Rule 1 and 2 of C.P.C., Article 109 of Limitation Act, Hindu Succession Act, 1956 - The court discussed the applicability of Order 39, Rule 1 and 2 of the C.P.C. regarding temporary injunctions, emphasizing the need for a prima facie case and balance of convenience. It interpreted Article 109 of the Limitation Act, noting that the limitation period begins from the date of possession, which was disputed in this case. The court also examined the implications of the Hindu Succession Act, particularly Sections 6 and 8, in determining the nature of property rights. The court concluded that the plaintiffs had made a prima facie case for the injunction, preventing the defendants from creating third-party interests in the property during the trial.

Fact of the Case:

The plaintiffs claimed a 50% share in a property originally owned by their ancestor, Rangappa, which was acquired by the Karnataka Housing Board. They alleged that the defendants fraudulently obtained a sale deed and power of attorney regarding the property, and sought a temporary injunction to prevent the defendants from creating third-party interests in the property.

Finding of the Court:

The Trial Court found that the plaintiffs had made a prima facie case for the injunction, as they were not parties to the disputed sale deed and had raised valid claims of fraud and misrepresentation. The court noted that the sale deed was executed after the property was acquired, raising questions about its validity.

Issues: 1. Whether the Trial Court erred in granting a temporary injunction under Order 39, Rule 1 and 2 of C.P.C. 2. Whether the suit was barred by limitation under Article 109 of the Limitation Act.

Ratio Decidendi: The court held that the question of whether the sale deed was binding on the plaintiffs and whether it was obtained through fraud required a full trial. The court emphasized that the limitation period under Article 109 did not apply as the plaintiffs claimed they only became aware of the fraud in June 2022, which was within the limitation period for filing the suit.

Final Decision: The appeal was dismissed, affirming the Trial Court's decision to grant a temporary injunction preventing the defendants from creating third-party rights in the property during the pendency of the suit.

JUDGMENT

1. Heard the learned counsel for the appellants-defendant Nos.1 and 2 and learned counsel for the caveator-respondent No.1 and 2 to 6.

2. The appellants, who are the defendant Nos.1 and 2 have filed this appeal challenging the order dtd. 24/2/2023 passed on I.A.No.1 in O.S.No.4731/2022 on the file of the LXVI Additional City Civil and Sessions Judge, Bengaluru City, (CCH- 67), allowing I.A.No.1 filed under Order 39, Rule 1 and 2 of C.P.C. and restraining them from encumbering or creating third party interest or charge in respect of 50% of developed sites of the schedule property.

3. The factual matrix of the case of the plaintiffs before the Trial Court while seeking the relief of declaration is that Sy.No.206 of Kengeri was owned by late Rangappa. The said entire land was acquired under notification by Karnataka Housing Board during 1998 and concluded on 22/4/2022. The father and grand-father of plaintiffs' family have challenged the acquisition notification before the High Court of Karnataka in W.P.Nos.14063/1993, 17407/2000 and W.A.No.5533/1998 and the matter was also taken before the Hon'ble Supreme Court of India, at that time, defendant Nos.1 and 2 the pawn brokers and local money lenders approached elder persons of the plaintiffs' family with an assurance that they have contacts with advocates and having knowledge about the Court proceedings and assured to prosecute before the Hon'ble Supreme Court. The defendants have collected amounts, litigation expenses and engaged advocate in Hon'ble Supreme Court. Taking advantage of the same, defendant Nos.1 and 2, in the interest of family members of plaintiffs', played fraud and mischief and obtained General Power of Attorney. Before the Hon'ble Supreme Court, an application for withdrawal was filed by defendant Nos.1 and 2 and withdrawn the same by submitting Board Resolution dtd. 31/12/2021 on 50:50 rights. The defendant Nos.1 and 2 have not brought the same to the notice of the family of plaintiffs and the Government has taken decision as per the schedules offered by BDA and KIDB, it is intensive document of scheme to the owners, the plaintiffs' family is entitled to 50% of developed land. In June 2022, the defendant No.24 started to disturb the possession of undivided interest over the suit property. Thereafter, the plaintiffs approached the Karnataka Housing Board and on enquiry, they came to know the alleged transaction that defendant Nos.1 and 2 by act of fraud against the family members have created the transaction. The defendant Nos.1 and 2 are making claim for allotment of developed 50% share. The family of the plaintiffs is entitled to 50% of share and it is necessary to restrain the defendant Nos.1 and 2 from creating third party interest over the 50% developed sites.

4. This application was resisted by the defendant Nos.1 and 2 by filing objections contending that the suit itself is not maintainable. It is contended that the plaintiffs cannot question the sale deed executed by defendant Nos.3 to 23 in favour of defendant Nos.1 and 2 on 2/3/2005 on the ground of fraud and the executants of the sale deed have not questioned the same. It is also contended that the suit of the plaintiffs is barred by Limitation Act under Article 109. The plaintiffs have no right over the suit schedule property, the frame of the suit is not correct. Defendant Nos.1 and 2 based on sale deed dtd. 2/3/2005 as owners, who are in possession of the property approached Karnataka Housing Board for securing benefit of 50:50 scheme and executed Memorandum of Agreement, the defendant Nos.3 to 23 and plaintiffs have no right over the schedule property and they did not claim any right under the Board Resolution. The sale deed dtd. 2/3/2005 is binding on defendant Nos.3 to 23 as well as plaintiffs. The reason for execution of sale deed for 3 acres and power of attorney for 2 acres, 10 guntas have been explained. The plaintiffs have no locus standi, the defendant Nos.1 and 2, who are entitled

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