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2019 Supreme(Bom) 1642
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Riyaz I. Chagla, J.
Edit II Productions – Appellant
Versus
Standard Chartered Bank and Others – Respondents
Notice Of Motion (L) No. 2304 of 2018; Suit No. 461 of 2010
Decided On : 05-09-2019
Rohaan Cama, Adv., Sapana Rachure, Adv., Kranti S. Anand, Adv., Neeta Karnik, Adv.
The transfer of property in breach of an order of injunction or status quo is void ab initio and must be quashed and set aside. A statement or undertaking to the court to maintain status quo does not create a charge on the property for satisfaction of a monetary decree.
Headnote:
Transfer of Property Act, 1882 - Section 100: A charge created on property by an act of party or operation of law for security of payment of money cannot be enforced against a transferee for consideration without notice of the charge. Code of Civil Procedure, 1908 - Section 151: The court has inherent powers to set aside a transfer of property in breach of an order of injunction or status quo and restore the status quo ante.
Fact of the Case:
The Applicant challenges the agreement for sale of a flat and seeks its cancellation. The Plaintiff claims compensation for financial loss and seeks sale of properties purchased with forged cheques. The Plaintiff obtained orders of injunction and status quo from the court. The Respondents transferred the flat in breach of the court orders. The Plaintiff seeks to set aside the transfer as void ab initio.
Finding of the Court:
The court examines the orders of injunction and status quo and holds that the transfer of the flat in violation of these orders is void ab initio. The court exercises its inherent powers under Section 151 of the Code of Civil Procedure to set the wrong at naught and restore the status quo ante. The court also rejects the argument that a charge was created on the property by operation of law. The court concludes that the transfer is illegal and must be quashed and set aside.
Ratio Decidendi: The transfer of property in breach of an order of injunction or status quo is void ab initio and must be quashed and set aside. The court has the power and duty to restore the status quo ante and cancel the transaction. A statement or undertaking to the court to maintain status quo does not create a charge on the property for satisfaction of a monetary decree.
Result: The court declares the agreement for sale of the flat as illegal, null and void, and not binding on the Plaintiff. The court orders the Respondents to cancel the agreement and directs the Court Receiver to take possession of the flat and hand it over to the Plaintiff. The court rejects the request for stay of the judgment.
JUDGMENT :
Riyaz I Chagla, J.
The Applicant who is the Plaintiff in the above Suit has taken out the Notice of Motion challenging the agreement for sale dated 15th September 2015 in respect of Flat No. 704, Evershine Woods, 7th Floor, B3(3) Building, Mira Road (E), District Thane ("the subject flat") and for declaring the said agreement for sale to be illegal, null and void, non-est, bad in law and not binding on the Plaintiff.
2. The Applicant has further sought a direction against Respondents No. 1 to 3 and Respondents No. 5 to 8 to take all necessary steps to cancel the agreement for sale dated 15th September 2015 and failing which the Court Receiver to be directed to do the same as well as forthwith take physical possession of the subject flat and handover the same to the Plaintiff. Prayer (d) of the Notice of Motion has already worked itself out and hence, has become infructuous.
3. The Plaintiff had filed the above Suit claiming compensation on account of financial loss caused to the Plaintiff and compensation on account of the injury caused to the Plaintiff due to the acts of the Defendants. The Plaintiff has also sought sale of the 14 properties purchased and acquired in the names of Defendants No. 2 to 4 out of the amounts from the Plaintiff's bank account by forging cheques in the Plaintiff's name.
4. The Plaintiff upon learning of various amounts being siphoned by the Defendants No. 2 to 4 from the Plaintiff's bank account and which was utilised by these Defendants for purchase of 14 properties filed a First Information Report with the concerned police station. The police authorities made an application before the additional Chief Metropolitan Magistrate for confirmation of attachment which was confirmed by the additional Chief Metropolitan Magistrate on 16th May 2009. Thereafter, the Plaintiff made an application before the additional Chief Metropolitan Magistrate for return of the said properties, however, the same was rejected on 31st August 2009. The Plaintiff at the time of filing the captioned Suit had taken out Notice of Motion No. 543 of 2010 on 20th February 2010 for urgent relief. Around the same time, the Plaintiff addressed a letter to the Respondent No. 8-Society and requested not to grant a no objection certificate for future transfer of the subject flat. In the Notice of Motion No. 543 of 2010, the Respondents No. 2 and 3 in Affidavit dated 6th August 2010, stated that during pendency of the above Suit, the Respondents No. 2 and 3, being Defendants No. 3 and 4 in the above Suit shall not dispose of and/or create third party rights in respect of any of the properties standing in their name. In view of this statement made by the Defendants No. 3 and 4 in the above Suit, this Court by order dated 11th August 2010 (the then R.Y. Ganoo, J.) accepted the statement and disposed of the ad-interim application in view thereof.
5. The Plaintiff had preferred a revision application against the order dated 31st August 2009 passed by the additional Chief Metropolitan Magistrate and which application was allowed on 20th March 2011. Pursuant to the said order, the Plaintiff took possession of the properties mentioned at Sr. Nos. 1, 2 and 3 in the Notice of Motion and these properties are in possession of the Plaintiff. The Respondents No. 2 and 3 filed 14 Criminal Writ Petitions challenging the order dated 28th March 2011 and this Court in the said Writ Petitions quashed the order dated 28th March 2011. However, the learned Judge of this Court (the then B.R. Gavai, J.) in the said order held that the parties were granted liberty to apply to the learned Judge in the above Suit for further orders regarding the said properties. It was also ordered that until appropriate orders are passed by the learned Civil Judge in the above Suit, neither the Petitioners (Respondents No. 2 and 3 herein) nor the Respondent No. 2 (the Applicant herein) shall deal with the said properties in any manner and would maintain status quo in respect
