Bombay High Court
Kamlesh Jaysukhlal Bhuta And Anr vs Vasantben Ramnikhlal Bhuta ( Deleted … on 2 January, 2025
Author: N.J.Jamadar
Bench: N.J. Jamadar
2025:BHC-OS:30
ia-2685-2023.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION NO.2685 OF 2023
IN
SUIT NO.3148 OF 2009
Kamlesh Jaysukhlal Bhuta and Anr. ...Applicants
VISHAL In the matter between
SUBHASH
PAREKAR Kamlesh Jaysukhlal Bhuta and Anr. ...Plaintiffs
Digitally signed by
VISHAL SUBHASH
versus
PAREKAR
Date: 2025.01.02
Vasantben Ramnikhlal Bhuta and Ors. ...Defendants
20:06:26 +0530
Mr. Girish Godbole, Senior Advocate with Mr. Vyom Shah, Mr.
Jimish Shah, Mr. Nitesh Menon, Mr. Virendra P., Ms. Aneesha
Munshi, Mr. Abhishek Bhosale, Ms. Palak Jain i/by Divya Shah
Associates, for the Applicants/Plaintiffs.
Mr. Shailesh Shah, Senior Advocate with Mr. D. Banarji, Mr. Aditya
Udeshi, Mr. Netaji Gawade i/by M/s. Sanjay Udeshi and Co., for
Defendant Nos.2 to 5.
Mr. Jagdish Aradwad (Reddy) for SRA.
Mr. S.K.Dhekale, Court Receiver, High Court, Bombay.
CORAM : N.J. JAMADAR, J.
RESERVED ON : JULY 16, 2024
PRONOUNCED ON : JANUARY 02, 2025
--------------
JUDGMENT :
1. The Applicants/Plaintiffs have preferred this application
seeking sale of part of the suit property described as ‘Larger
Andheri Property’ and the distribution of the sale proceeds between
the Plaintiffs and Defendants, permission to independently develop
the larger Andheri property and also direct the sale of such part of
CTS Nos.397, 397/A and CTS No.397/1 to 284 (part of the suit
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properties) owned by M/s. R.J. Constructions, on such terms as this
Court may deem fit.
2. At the outset, it may be necessary to note the nature and
subject matter of the instant suit and Suit No.389 of 2010, instituted
by the Defendants.
3. Jaysukhlal Bhuta – original Plaintiffs No.1, and Ramnikhlal,
husband of Defendant No.1 and the predecessor in title of Defendant
Nos.2 to 5, jointly, owned around 83 properties described in Exhibit
B to the Plaint. Kamlesh Bhuta – Applicant No.1 is the son of
Jaysukhlal and Bhanumati Bhuta – applicant No.2, is the wife of
Jaysukhlal Bhuta. Defendant Nos.2 to 5 are the descendants of
Ramnikhlal.
4. The Plaintiffs assert, the suit properties described in Exhibits
B and C are the joint properties and/or joint family properties of
Jaysukhlal and Ramnikhlal.
5. The Defendants contend, out of 83 properties described in
Exhibit B to the Plaint, 8 properties described in Exhibit C were
exclusively owned by Ramnikhlal, and, thus, the Defendants are the
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exclusive owners of the said properties. Conversely, Jaysukhlal and
his descendants have no right, title and interest therein.
6. The Plaintiffs have instituted the instant suit for declaration
that the properties mentioned in Exhibits B are joint family
properties, and for partition and separate possession of the said
properties.
7. The Defendants have instituted Suit No.389 of 2010, inter alia,
for a declaration that the properties mentioned in Exhibit C to the
Plaint in the said suit exclusively belonged to Ramnikhlal, and, for
partition of the remaining joint family properties. A prayer is also
made that the joint family properties which cannot be partitioned
by metes and bounds ought to be sold and the sale proceeds be
distributed in accordance with the share of the parties.
8. The Plaintiffs assert, area of the joint family properties
described in Exhibit B aggregates approximately 4,63,680 sq.
meters. The instant Interim Application is preferred in respect of
the properties bearing CTS Nos.397, 397A, 397/1 to 284, 401, 402,
402/1, 404/A/1, 404/A/2, 404/1 to 39, 422, 422/1 to 15
admeasuring about 90,836.72 sq. meters situated at Village Mogra,
Vishal Parekar, PS 3/49
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Taluka Andheri, referred to as ‘the Larger Andheri Property’,
asserting that:
(a) The Larger Andheri Property has been encroached by the slum
dwellers. In or around 2010, notifications were issued under the
Maharashtra Slum Areas (Improvement, Clearance And
Redevelopment) Act, 1971 (the Slum Act, 1971), declaring various
properties forming part of the larger Andheri property as slum
rehabilitation area. Despite the initiative by the Plaintiffs to submit
a joint proposal as co-owners of the said property as the portions of
the larger Andheri property are affected by the slums, the
Defendants refused to co-operate with the Plaintiffs.
(b) Few housing co-operative societies (proposed) have sprang up.
Those housing co-operative societies have filed proceedings under
the Slum Act, 1971 for acquisition of the portions of the larger
Andheri property and rehabilitation of the slum dwellers residing
thereat. Faced with the acquisition proceedings, the Plaintiffs were
constrained to take out Notice of Motion Nos.365 and 366 of 2014
seeking permission of the Court to develop those portions of the
joint family properties. The Defendants resisted. By an order dated
2 February 2017, this Court permitted each of the co-owners to
make independent representations for developing the properties
before the Competent Authority. The Defendants have not made any
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representations.
(c) The endeavour of the Plaintiffs to develop portions of the
larger Andheri property was also thwarted by the Defendants by
filing objections to the effect that the proposal cannot proceed
without the consent of the co-owners – Defendants. Eventually, by
an order dated 5 October 2021, the Slum Rehabilitation Authority
has held that the proposal of the Plaintiffs for development of the
plots forming part of the larger Andheri property stood ‘filed’ for
want of consent of the co-owners. The said decision is challenged in
WP No.64 of 2022 filed by the Plaintiffs.
9. The Plaintiffs seek interim orders on the premise that, out of
the larger Andheri Property, an area admeasuring 61,513.40 sq.
meters is jointly owned by the Plaintiffs and Defendants, and, they
are entitled to 30,756.70 sq. meters each. What is in dispute is, the
share of the Plaintiffs in part of CTS Nos.397, 397A, 397/1 to 284
admeasuring 14,661.66 sq. meters only (disputed property).
10. According to the Plaintiffs, the disputed property is owned by
the Plaintiffs and Defendants in equal shares as it was owned by
family partnership firm M/s. R.J.Constructions, in which
Jaysukhlal – original Plaintiffs No.1, and Ramnikhlal, the
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predecessor in title of the Defendants, were partners having equal
shares. There are documents which either evidence or contain an
admission on the part of the predecessor in title of the Defendants
and/or Defendants, that the larger Andheri property, including the
disputed property, is co-owned by the Plaintiffs and Defendants,
whether individually or by virtue of Jaysukhlal (original Plaintiffs)
and Ramnikhlal, being the partners, having equal shares in M/s.
R.J. Constructions. The Plaintiffs are, thus, entitled to partition of
the larger Andheri property.
11. The Applicants/Plaintiffs aver, larger Andheri Property is,
however, not capable of being partitioned by metes and bounds on
account of the topography of the land, two big nallas, which flow
across the land; reservation of about 16,000 sq. meters as a
recreation ground under the Development Plan 2034, existence of
around 11 Tabelas sprawled across portions of the larger Andheri
Property, reservation of an area admeasuring 5500 sq. meters for
DP roads, set back area, etc., aviation height restrictions and more
importantly, encroachment by more than 20,000 slum dwellers,
with more than 3700 tenements across the portions of the larger
Andheri property, and various acquisition proceedings in respect of
some portions of larger Andheri property.
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12. In view of the aforesaid hindrances which make the partition
of the Larger Andheri Property by metes and bounds virtually
impossible, there is no alternative but to dispose of the larger
Andheri Property by allotment of the properties therein to one
party, subject to payment of just compensation and/or market value
to the other party.
13. In the application, the Plaintiffs have ascribed reasons which,
according to the Plaintiffs, make the Plaintiffs more suitable for the
sale of the larger Andheri Property to them. It is, inter alia,
contended that the Defendants do not have the financial means or
inclination to purchase the property. Alternatively, if the
Defendants have financial ability, they can pay the share of the
Plaintiffs subject to payment of just market rate to be discovered by
holding inter se auction or bidding.
14. The Plaintiffs have suggested the mode, terms and procedure
of inter se bidding, as set out in Exhibit TT. For the said purpose,
the Plaintiffs have estimated the base price of the larger Andheri
property at Rs.165 Crores approximately.
15. Lastly, it is averred, on account of the disinclination and
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reluctance of the Defendants to cooperate with the Plaintiffs in the
development of the larger Andheri property, there is an imminent
risk of acquisition of portions of the larger Andheri Property under
the provisions of Section 14 of the Slum Act, 1971. In that event,
both the Plaintiffs and Defendants would suffer an irreparable loss
as valuable property would be acquired at a throw away price in
accordance with the provisions of the Slum Act, 1971. It is,
therefore, imperative in the interest of equity, justice and fairness to
pass interim orders as prayed for by the Plaintiffs.
16. An affidavit in reply came to be filed on behalf of the
Defendants resisting the prayers in the Interim Application. At the
threshold, the Defendants contend that the prayers in the instant
application cannot be granted as it would amount to granting final
reliefs at an interim stage without trial, and, thereby, the rights of
the Defendants would be irretrievably prejudiced. The Defendants
have categorically asserted that the properties bearing CTS
Nos.397, 397A, 397/1 to 284 exclusively belong to the Defendants
as Ramnikhlal had acquired the said properties under Deeds of
Indenture, during the period 1939 to 1948, out of his own funds.
Reliance on the Deed of Partnership dated 30 March 1972 to show
that those properties (disputed property) were brought in the stock
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of the firm M/s. R.J.Constructions, is wholly misplaced. The said
Partnership Deed nowhere indicates that Ramnikhlal had brought
in disputed properties as an asset of the partnership firm.
Therefore, the claim of the Plaintiffs over the disputed properties is
completely unsustainable.
17. The Defendants have denied that the Defendants have not
taken measures to assert and/or protect their rights over the
portions of the larger Andheri property. The Defendants filed an
appeal along with M.A.No.23 of 2017 to assail the order dated 30
June 2017, declaring lands bearing CTS Nos.397 (part), 397/29 to
44 and 422 (part) admeasuring 10032.434 sq. meters as slum
rehabilitation area under Section 3(C)(1) of the Slum Act, 1971. The
Defendants have also filed an appeal along with M.A.No.8 of 2011
challenging the Notification dated 23 December 2008 issued under
Section 4(1) of the Slum Act, 1971 in respect of CTS Nos.397
(part), 397/275 to 284 admeasuring 7,326 sq. meters.
18. The Defendants categorically denied that they have adopted
obstructionist approach. The Defendants are entitled to protect
their rights in the disputed properties. The Plaintiffs have no right,
title and interest to develop the properties which exclusively
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belonged to Ramnikhlal. Therefore, the instant application seeking
permission to develop the larger Andheri property or sale of the
larger Andheri property, comprising properties over which the
Plaintiffs can lay no proprietary title, cannot be entertained.
19. The Defendants further contend that the Plaintiffs have
unilaterally determined the base price of Rs.165 Crores to suit their
case. Measures to have inter se bidding is suggested with an oblique
motive to trample upon the rights of the Defendants, and, also
prevent discovery of true market value of the larger Andheri
property. Such proposal cannot be countenanced.
20. In the alternative, and without prejudice to the aforesaid
contentions, in the event the Court comes to the conclusion that the
larger Andheri property is required to be sold, the Defendants
contend, bids may be invited from the public at large, so that the
best price can be fetched.
21. Moreover, properties bearing CTS Nos.401, 402, 402/1,
404/A/1, 404/A/2, 404/1 to 39, 422 and 422/1 to 15 were
purchased in the name of Nagardas Bhuta and Kashiben N. Bhuta,
and, are thus joint family properties. These properties can be
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divided by metes and bounds, and, there is no need to sale those
properties.
22. An additional affidavit was filed on behalf of the
Applicants/Plaintiffs to substantiate their claim that the larger
Andheri property cannot be partitioned by metes and bounds. A
report of Nadkarni & Co., Architects, Interior Designers and Valuers
dated 1 March 2024 was sought to be pressed into service in
support of the said claim. A reference is made to a Notification
dated 29 June 2017 issued by the Government of Maharashtra
under Section 14(1) of the Slum Act, 1971 to acquire 6,962.4 sq.
meters land out of Survey Nos.397, 397/275 to 284, to bolster up a
case that there is an imminent danger of acquisition of substantial
portion of the larger Andheri property by the State Government.
23. In the further affidavit in reply filed on behalf of Defendant
No.3, it is reiterated that the question as to whether the properties
cannot be partitioned by metes and bounds and, therefore, the
portion of the said properties be sold, is contentious and complex,
and cannot be decided in the Interim Application, without providing
an opportunity to the Defendants to lead evidence. By this
application, the Plaintiffs desire to preempt the entire trial
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procedure. The Defendants contend that the claim of the Plaintiffs
that the larger Andheri property cannot be partitioned by metes
and bounds, cannot be accepted as a gospel truth.
24. The Defendants have, in turn, placed reliance on a report
submitted by Shreeya Services Pvt. Ltd., Architects, to the effect
that the larger Andheri property can be partitioned equitably. With
reference to the Notification issued under Section 4(1) of the Act,
1971, the Defendants contend some properties were also notified
under the Notification dated 23 December 2008, which was
challenged by the Defendants by filing an appeal. Therefore, the
Plaintiffs cannot take any advantage of the fact that the
Notifications have been issued for acquisition of the property which
are exclusively owned by the Defendants.
25. In the wake of the aforesaid pleadings, I have heard Mr. Girish
Godbole, learned Senior Advocate for the Applicants/Plaintiffs and
Mr. Shailesh Shah, learned Senior Advocate for the Defendants, at
some length. The learned Counsel took the Court through the
pleadings and documents in the instant suit and Suit No.389 of
2010, the documents annexed with this application, reply thereto
and especially the rival reports of Architects, relied upon by the
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respective parties.
26. By this application, the Plaintiffs essentially seek permission
to exclusively develop larger Andheri property or the sale of the
larger Andheri property to either of the parties in inter se bidding
with the other party being paid the value of their share as
discovered in the inter se bidding.
27. Mr. Godbole, learned Senior Advocate for the Applicants/
Plaintiffs submitted that the prayers in the instant application
deserve consideration from a perspective which is, in essence,
beneficial to both the parties. Laying emphasis on the fact that the
valuable suit properties, especially the larger Andheri property,
face an imminent risk of acquisition at a nominal price under the
provisions of the Slum Act, 1971, Mr. Godbole urged that continuing
the status quo would cause irretrievable prejudice to both the
parties. The factors of large scale encroachments and the
proceedings for acquisition of the portions of the larger Andheri
property under the provisions of the Slum Act, 1971 were pressed
into service to draw home the point that this is a fit case where the
Court would be justified in permitting the change in the nature of
the suit properties during the pendency of the suit. To this end, Mr.
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Godbole placed reliance on the decision of the Supreme Court in the
case of Maharwal Khewaji Trust (Regd.) Faridkot V/s. Baldev Dass1.
28. Mr. Godbole further submitted that a practical and pragmatic
view of the matter is required to be taken. Encroachments over the
larger Andheri property is indisputable. In addition, on account of
the topography of the suit properties, reservations in the
Development Plan, existence of a number of large cattle sheds
(tabelas), reservation for DP roads and the aviation height
restrictions, partition of the larger Andheri property by metes and
bounds is impracticable.
29. Baking upon the report of M/s. Nadkarni and Company,
Architects, especially the conclusion (pages 734-735), Mr. Godbole
urged that the reasons ascribed by the Architects for arriving at the
conclusion that the equitable division of the Larager Andheri
Property is not practicable, cannot be brushed aside lightly. Each of
the circumstances noted by the Architect bear upon the partibility
of the subject suit lands from the point of view of economic viability
and development potential.
30. Mr. Godbole submitted that to address such a situation, the
1 (2004) 8 SCC 488
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legislature has enacted the Partition Act, 1894. Laying special
emphasis on the statement of objects and reasons of the Partition
Act, 1894, Mr. Godbole strenuously submitted that a preliminary
decree for partition is not a pre-condition for the exercise of the
power to direct the sale of the joint family properties. Nor is it
necessary that the Court must record a positive finding that the
partition by metes and bounds is not reasonable or convenient. It
should only appear to the Court that the suit property is not capable
of division by metes and bounds. To buttress this submission, Mr.
Godbole placed strong reliance on the decisions of the Supreme
Court in the cases of R.Ramamurthi Iyer V/s. Raja V. Rajeswara
Rao2 and Rani Aloka Dhdhoria and Ors. V/s. Goutam Dudhoria and
Ors.3
31. As a second limb of the submission, Mr. Godbole would urge
that, given the peculiar facts of the case, this Court is not denuded of
the power to order the sale at an interim stage, if the Court finds it
expedient in the interest of justice. The Court can always resort to
inherent powers under Section 151 of the Code of Civil Procedure,
1908, as such a course is not expressly prohibited. Reliance was
placed on a decision of the Gujarat High Court in the case of
2 (1972) 2 SCC 721
3 (2009) 13 SCC 569
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Hirachand Kikabhai V/s. Chandrasen Motichand4 and a judgment of
the Supreme Court in the case of Rajendra Prasad Gupta V/s.
Prakash Chandra Mishra and Ors.5.
32. Mr. Godbole further submitted that the resistance to the sale
of the disputed properties on the premise that those properties are
solely owned by the Defendants does not merit countenance, as
there are four documents which clearly demonstrate that the
disputed property was brought by the predecessor in title of the
Defendants as a capital in M/s. R.J.Constructions. Attention of the
Court was invited to the Development Agreement dated 2 July 2004
executed by and between Ramnikhlal and Jaysukhlal in the
capacity of partners of M/s. R.J.Constructions and M/s. Aditi
Developers, wherein the disputed property was shown to have been
brought in as the capital of Ramnikhlal, and, consequently, the
property of the firm. Secondly, in Suit No.3179 of 2004 instituted
by Ramnikhlal, Jaysukhlal and R.J.Constructions, it was again
categorically asserted that Ramnikhlal had brought the said
property in the firm M/s. R.J.Constructions, and, thereby, the
Plaintiffs therein were the owners of the disputed property.
4 1966 ILR Guj 143
5 (2011) 2 SCC 705
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33. In the face of these documents which, in a sense, constitute
admission in pleadings, the claim of the Defendants that they are
the exclusive owners of the disputed property, is clearly
unsustainable. In any event, Mr. Godbole urged, the applicants have
suggested a mechanism to protect the interest of the Defendants
qua the disputed property in the event the court orders the sale.
Even otherwise, the Court may put appropriate conditions to
protect the interest of the Defendants qua the claim with regard to
the disputed property.
34. In opposition to this, Mr. Shah, learned Senior Advocate for
the Defendants, at the outset, submitted that this application is
actuated by a design to preempt the trial of all the disputed
questions of facts and law by seeking the sale of the larger Andheri
property and present a fait accompli to the Defendants. Taking the
Court through the prayers in the plaint, especially the relief of
declaration in prayer clause (a) and partition by metes and bounds
in prayer clause (b), Mr. Shah urged with tenacity that those
principal prayers in the plaint would stand granted without proof
and trial if the Court grants the alternate prayer contained in
prayer clause (b)(i) of sale of the suit properties, at an interim
stage. Such a course is legally impermissible, urged Mr. Shah.
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35. An earnest endeavour was made by Mr. Shah to draw home
the point that whether the partition of the suit properties by metes
and bounds is not reasonable and practicable, is a matter rooted in
facts, and that question warrants determination at the trial. A
summary inquiry, like the present one, which the applicants desire
the Court to embark upon to determine whether the partition is
possible, is not permissible.
36. At any rate, the matter is also within the province of the
experts, urged Mr. Shah. In the case at hand, there are conflicting
reports of the experts. The report of Shreeya Services Pvt. Ltd.,
Architects, solicited by the Defendants, in terms, records that the
equitable division of the larger Andheri property is practicable. At
this stage, according to Mr. Shah, the Court is not equipped to give
primacy to one of the two conflicting reports sans evidence.
Therefore, according to Mr. Shah, the proper course would be to
conclude the trial expeditiously as the pleadings are complete. The
proposed course of action has the propensity to by-pass all the
provisions of the Code, including Order XX Rule 18.
37. Refuting the submissions on behalf of the applicants premised
on the provisions of the Partition Act, 1894, Mr. Shah asserted that
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the recourse to the provisions of the Partition Act, can be made at
the time of passing of the decree. None of the judgments, on which
reliance was placed on behalf of the applicants, were rendered in a
case where the Court resorted to the provisions of the Partition Act,
at an interim stage. Therefore, at this juncture, recourse to the
provisions of the Partition Act, 1894 is extremely tenuous.
38. Mr. Shah further urged that, in the facts of the case, in view fo
the two conflicting reports, even it cannot be said that it appears to
the Court that the partition of the larger Andheri property is not
reasonable or practicable. The Defendants have fairly pleaded the
true state of affairs as regards the ownership of the suit lands. The
fact that the Defendants have admitted that there are joint family
properties does not necessarily imply that the Defendants have
admitted that those properties cannot be divided by metes and
bounds. Thus, the recourse to the provisions of Order XII Rule 6 of
the Code, is not at all warranted.
39. Mr. Shah urged with a degree of vehemence that the question
as to whether the disputed property was brought in the partnership
firm by deceased Ramnikhlal, cannot be decided at this stage. The
aspect as to whether the recitals in the Development Agreement, or
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for that matter, pleadings in the previous proceedings constitute an
admission that the disputed properties formed part of the
partnership asset, is a matter which must await adjudication at the
trial post evidence. Taking the Court through the Partnership Deed,
especially clause (4) thereof, Mr. Shah submitted that the question
as to whether there was compliance with the reciprocal promise
contained therein, has to be decided at the trial.
40. Mr. Godbole joined the issue by canvassing a submission that
the disputed properties, which were incontrovertibly shown as the
property of R.J.Constructions, vested in late Ramnikhlal and
Jaysukhlal, as the partners of the said firm. The Partnership Act
contemplates liquidation of the assets of the partnership as the
primary step to the settlement of accounts between the partners
upon the dissolution of a firm. Both Plaintiffs and Defendants, in
their respective suits, are, inter alia, seeking the dissolution of the
partnership M/s.R.J.Constructions. Therefore, there is no
impediment in ordering the sale of the disputed property as well, for
the parties are not at issue on the point that the firm M/s. R.J.
Constructions stood dissolved. To bolster up this submission, Mr.
Godbole placed reliance on the judgment of Supreme Court in the
case of S.V.Chandra Pandian & Ors. vs. S.V.Sivalinga Nadar & Ors.6.
6 (1993) 1 SCC 589
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Consideration :-
41. Before appreciating the aforesaid submissions canvassed
across the bar, it may be apposite to precisely ascertain the area
over which the parties are at issue, with regard to the proprietary
rights. In the further affidavit in reply, the Defendants have
classified the suit properties which are joint family properties,
properties over which the Defendants claim exclusive ownership
and the properties which exclusively belonged to the Plaintiffs. The
properties bearing CTS Nos. 401, 404, 404/A/1, 404/A/2, 404/1 to
39, 422, and 422/1 to 15, having been purchased by Nagardas
Bhuta and Kashiben Bhuta, are stated to be the undisputed joint
family properties. Properties bearing CTS No.402 and 402/1 are
stated to be the properties belonging to the Plaintiffs and, thus,
solely owned by the Plaintiffs. The properties bearing CTS Nos.397,
397A, 397/1 to 284 are the properties solely owned by the
Defendants (disputed properties).
42. The controversy between the parties, thus, revolves around
the questions as to whether the disputed properties form part of
joint family properties and whether the larger Andheri property
cannot be partitioned by metes and bounds and whether the
circumstances of the case are such that the Court, at an interim
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ia-2685-2023.docstage, ought to direct the sale of the Larger Andheri Property
without going for the trial, and, if the circumstances so warrant,
what ought to be the modalities of the sale ?
43. Evidently, the distinct considerations would come into play as
regards the three sets of suit properties, as classified by the
defendants. In respect of the undisputed joint family properties, the
question as to whether the said properties are not conveniently and
reasonably partible would be at the hub of the matter, since these
does not seem much controversy over the entitlement of Jaysukhlal
Bhuta, the predecessor in title of the Plaintiffs, and Ramnikhlal
Bhuta, the predecessor in title of the defendants. With regard to the
disputed properties, over which the defendant claim right, title and
interest, to the exclusion of the Plaintiffs, the question of title would
be required to be determined in addition to the necessity of sale on
account of impracticability of partition by metes and bounds. The
third set comprising the properties bearing CTS No. 402 and 402/1,
which the defendants concede, exclusively belong to the Plaintiffs, a
declaration to that effect would suffice.
44. Taking the third set first, it is necessary to note, in the
affidavit in reply dated 7th February, 2024, in paragraph 18, it was,
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ia-2685-2023.docinter alia, contended that the properties including the properties
bearing CTS Nos. 402 and 402/1 were purchased in the names of
Nagardas Bhuta and Kashiben N. Bhuta and therefore those were
joint family properties. However, in the further affidavit in reply by
defendant No. 3, it has been categorically asserted that the
properties bearing CTS Nos. 402 and 402/1 are the properties of the
Plaintiffs solely. In paragraph No. 9 of the said affidavit, it has been
further asserted that the defendants have no claim over the said
properties of the Plaintiffs. It would be contextually relevant to note
that in the report of Shreeya Services Pvt. Ltd., Architects
appointed by the Defendants also, it is recorded that the Architects
were instructed to exclude CTS Nos. 402 and 402/1 as those
properties were in the exclusive ownership of the Plaintiffs. It would
be also necessary to note that Mr. Shah, learned Senior Advocate for
the Defendants, also canvassed submissions on the premise that the
properties bearing CTS Nos. 402 and 402/1 exclusively belong to
the Plaintiffs.
45. In view of the aforesaid stand of the defendants, on an
affidavit, I am inclined to hold that there is no impediment, even at
this stage, in making a declaration that the properties bearing CTS
Nos. 402 and 402/1, are exclusively owned by the Plaintiffs, and
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ia-2685-2023.docthus, exclude those properties from further consideration.
46. This leads me to the consideration of the prayers in the
instant application qua the first set of the suit properties, namely,
the undisputed joint family properties. At the outset, it is necessary
to note the nature of a suit for partition. A judicial determination in
a suit for partition involves broadly two parts. First, whether a
party claiming partition has a share in the suit property and, if yes,
whether such a party is entitled to a division and separation of his
share. Second, once the aforesaid question is answered in the
affirmative, the actual division of the properties, which is primarily
in the nature of a ministerial act.
47. A useful reference in this context can be made to a decision of
the Supreme Court in the case of Shub Karan Bubna @ Shub Karan
Prasad Bubna vs. Sita Saran Bubna and Others7 wherein the nature
of a suit for partition was expounded, as under:-
7] In a suit for partition or separation of a share, the prayer is not
only for declaration of Plaintiffs’s share in the suit properties, but
also division of his share by metes and bounds. This involves three
issues:
(i) whether the person seeking division has a share or interest in
the suit property/properties;
(ii) whether he is entitled to the relief of division and separate
possession; and
(iii) how and in what manner, the property/properties should be
7 (2009) 9 Supreme Court Cases 689.
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divided by metes and bounds ?
In a suit is for partition or separation of a share, the court at
the first stage decides whether the Plaintiffs has a share in the suit
property and whether he is entitled to division and separate
possession. The decision on these two issues is exercise of a
judicial function and results in first stage decision termed as
`decree’ under Order 20 Rule 18(1) and termed as `preliminary
decree’ under Order 20 Rule 18(2) of the Code. The
consequential division by metes and bounds, considered to be a
ministerial or administrative act requiring the physical inspection,
measurements, calculations and considering various permutations
/ combinations /alternatives of division is referred to the
Collector under Rule 18(1) and is the subject matter of the final
decree under Rule 18(2).
48. The thrust of the submission of Mr. Shah was that the instant
application obviates the judicial determination as to the entitlement
and partiability of the suit properties and, instead, directly calls
upon the Court to venture into the division of the properties in a
particular fashion i.e. by the sale of the suit properties. An earnest
endeavour was made by Mr. Shah to draw home the point that the
said exercise can only be at the stage of passing of the final decree. A
two-pronged challenge was mounted by Mr. Shah. One, the case that
the suit properties cannot be reasonably and conveniently
partitioned has not been pleaded adequately. Two, there is no
warrant for invoking the provisions contained in sections 2 and 3 of
the Partition Act, 1893, at this stage.
49. The statement of objects and reasons for the enactment of
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Partition Act, 1893 indicates the circumstances which necessitated
the enactment and the mischief the legislation proposed to address.
It explicitly records that, under the law, as it then stood, the Court
was enjoined to give the share to each of the parties and could not
direct a sale and division of the proceeds in any case whatever.
There were insuperable practical difficulties in the way of making
an equal division, and it was realized that the Court was either
powerless to give effect to its decree or was driven to all kinds of
shifts and expedients in order to do so. It was, therefore, proposed
to supply the said defect in the law, by giving the Court, under
proper safeguard, a discretionary authority to direct a sale where a
partition cannot reasonably be made and the sale would, in the
opinion of the Court, be more beneficial for the parties. At the same
time, having regard to the strong attachment of the people in this
country to their landed possession, it was proposed to make the
consent of parties interested at least to the extent of a moiety a
condition precedent to the exercise by the Court of the said power.
Thus, in order to prevent any oppressive exercise of the said
privilege, it was proposed to give such of the shareholders as do not
desire a sell, the right to buy the others out at a valuation to be
determined by the Court.
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50. Keeping in view, the aforesaid object of the Partition Act,
1893, the provisions contained in sections 2 and 3 of the Act, 1893,
deserve to be extracted. They read as under:-
2] Power to Court to order sale instead of division in partition
suits – Whenever in any suit for partition in which, if instituted prior
to the commencement of this Act, a decree for partition might have
been made, it appears to the Court that, by reason of the nature of the
property to which the suit relates, or of the number of the
shareholders therein, or of any other special circumstance, a division
of the property cannot reasonably or conveniently be made, and that a
sale of the property and distribution of the proceeds would be more
beneficial for all the shareholders, the Court may, if it thinks fit, on the
request of any of such shareholders interested individually or
collectively to the extent of one moiety or upwards, direct a sale of the
property and a distribution of the proceeds.
3] Procedure when sharer undertakes to buy –
(1) If, in any case in which the Court is requested under the last
foregoing section to direct a sale, any other shareholder applies for
leave to buy at a valuation the share or shares of the party or parties
asking for a sale, the Court shall order a valuation of the share or
shares in such manner as it may think fit and offer to sale the same to
such shareholder at the price so ascertained, and may give all
necessary and proper directions in that behalf.
(2) If two or more shareholders severally apply for leave to buy as
provided in sub-section (1), the Court shall order a sale of the share or
shares to the shareholder who offers to pay the highest price above the
valuation made by the Court.
(3) If no such shareholder is willing to buy such share or shares at the
price so ascertained, the applicant or applicants shall be liable to pay
all costs of or incident to the application or applications.
51. From a conjoint reading of sections 2 and 3 of the Act, 1893, it
becomes discernible that the Court invoking the power to direct the
sale of the property in a suit for partition, must first record a finding
that the case is such that a decree for partition might have been
passed. Secondly, on account of the nature of the property which is
the subject matter of the suit, the number of shareholders, who are
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entitled to be allotted the shares in the suit property or any other
special circumstances, it appears to the Court that a division of the
property, cannot reasonably or conveniently be made and
consequently a sale of the property and distribution of the proceeds
would be more beneficial for all the shareholders. It must be
remembered that section 2 confers a discretion on the Court and as
is the case with the exercise of discretion in other jurisdictions,
such discretion must be exercised judiciously and after being
informed of all the relevant considerations.
52. A profitable reference in this context can be made to the
decision of the Supreme Court in the case of R.Ramamurthi Iyer
(supra) wherein, the import of the provisions contained in sections
2 and 3 of the Act, 1893 was expounded in the following terms :
8] ……….The scheme of Sections 2 and 3 apparently is that if the
nature of the property is such or the number of shareholders is so
many or if there is any other special circumstance and a division of the
property cannot reasonably or conveniently be made, the court can in
its discretion, on the request of any of the shareholders interested
individually or collectively to the extent of one moiety or upwards,
direct a sale of the property and distribute the proceeds among the
shareholders. Now where a court has been requested under Section 2
to direct a sale any other shareholder can apply for leave to buy at a
valuation the share or shares of the party or parties asking for sale. In
such a situation it has been made obligatory that the court shall order a
valuation of the share or shares and offer to sale the same to the
shareholder who has applied for leave to buy the share at a price
ascertained by the court. other words if a-Plaintiffs in a suit for
partition has invoked the power of the court to order sale instead of
division in a partition suit under section 2 and the other shareholder
undertakes to buy at a valuation the share of the party asking for sale
the court has no option or choice or discretion left to it any it is boundVishal Parekar, PS 28/49
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ia-2685-2023.docto order a valuation of the shares in question and offer to sale the same
to the shareholder undertaking or applying to buy it at a valuation. The
purpose underlying the section undoubtedly appears to be to prevent
the property falling into the hands of third parties if that can be done in
a reasonable manner. It would appear from the Objects and Reasons
for the enactment of the Partition Act that as the law stood the court
was bound to give a share to each of the parties and could not direct a
sale or division of the proceeds. There could be, instances where
“there were insuperable practical difficulties in the way of making an
equal division and the court was either powerless to give effect to. its
decree or was- driven to all kinds of shifts and expedient in order to do
so. The court was, therefore, given a discretionary authority to direct a
salt where. a partition could not reasonably be made and the sale
would, in the opinion of the court, be more beneficial to the parties.
But having regard to the strong attachment of the people in this
country to their landed possessions the consent of the parties
interested at least to the extent of a moiety in the property was made a
condition precedent to the exercise by the court of the new power. At
the same time in order to prevent any oppressive exercise of this
privilege those shareholders who did not desire a sale were given a
right to buy the others out at a valuation to be determined by the court.
53. In the aforesaid case, it is of critical salience to note, in the
context of the controversy at hand, that the Supreme Court
enunciated in clear and explicit terms that the language of section 2
of the Partition Act, 1893 does not appear to make the Court to give
a finding that the property is incapable of division by metes and
bounds.
54. The aforesaid pronouncement was followed by the Supreme
Court in the case of Rani Aloka Dudhoria vs. Goutam Dudhoria8. A
Division Bench of the Delhi High Court in the case of Kusum Kumria
and Others vs. Pharma Venture (India) Private Limited and Anr. 9
8 (2009) 13 Supreme Court Cases 569.
9 2015 SCC OnLine Del 13042.
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after an elaborate analysis of the provisions and precedents,
summed up the principles, inter alia, as under:
(iv) If a division by metes and bounds cannot be made without further
enquiry, then first, the preliminary decree shall be passed and
thereafter a commissioner is appointed to physically examine the
property to suggest manner of division. (Ref : Shub Karan Bubna, para
18.2).
…….. …….
(ix) In a partition suit, under Section 2 of the Partition Act, having
regard to the nature of the property or large number of shareholders or
in other special circumstance, if it appears to the court that the
division of the property cannot reasonably or conveniently be made
and that a sale of the property would be more beneficial, it can direct
sale of the property and distribution of the proceeds as per shares
declared. In addition, the court may be requested to direct sale by
shareholders, interested individually or collectively to the extent of one
moeity or upwards. (Ref : Shub Karan Bubna, para 18.2 and R.
Rmamurthi Iyer, para 8).
(x) It is not obligatory on the court to give a positive finding that the
property is incapable of division by metes and bounds. It should only,
“appear” that it is not so capable of division. Parties may jointly agree
to such dispossession of the property. (Ref : R. Ramamurthi Iyer, para
13).
(xi) The request from the shareholder (s) for sale of the property does
not have to be in the nature of a formal prayer. (Ref : Rani Aloka
Dudhoria, para 48; R. Rmamurthi Iyer, para 13) If a party or co-sharer
asks for sale of a property under Section 2 of the Partition Act, it is the
duty of the court to order the valuation of the shares (Ref.: Malati
Ramachandra Raut).
(xii) The words employed in Section 3(1) only require the shareholder
has to merely inform the court or to notify to it that he is prepared to
buy at a valuation the share of the party asking for sale. No formal
application for the purpose is necessary (R. Ramamurthi Iyer). It is
obligatory upon the court to offer to sale the same to the shareholder(s)
who seek to buy the shares of the other party in terms of Section 3 at
the price determined upon such valuation. The court has no discretion
or option or choice in this matter. (Ref : Malati Ramchandra Raut, para
9; R. Ramamurthi Iyer, paras 8 and 11).
(xiii) The right of a co-sharer to purchase a property directed to be sold
under Section 3 of the Partition Act accrues on the date the co-sharer
request the court to sale the property to him. The valuation of the
shares has to be made on the date of accrual of this right. (Ref : Malati
Ramchandra Raut, para 10).
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(xiv) In a partition suit, the Plaintiffs is not wholly dominus litis. After
a shareholder has applied for leave to buy at a valuation under Section
3 of the Partition Act, the Plaintiffs who requested the court to exercise
the power under Section 2 of ordering the sale, cannot withdraw the
suit under Order 23 Rule 1 of the CPC. (Ref :R. Rmamurthi Iyer, paras
9 and 10).
55. Mr. Shah submitted that the decision in the case of R.
Ramamurthi Iyer (supra) was at the stage of passing of the decree
and not at an interim stage, as is the case at hand. It was urged that
the nature and character of the suit property cannot be changed
during the pendency of the suit and till rights of the parties are
adjudicated. Reliance on the decision of the Supreme Court in the
case of Maharwal Khewaji Trust (supra) on behalf of the Plaintiffs,
does not advance the cause of the submission on behalf of the
Plaintiffs as the Supreme Court has emphasized the principle of
maintaining the status-quo during the pendency of the proceeding,
urged Mr. Shah.
56. In the case of Maharwal Khewaji Trust (supra), the Supreme
Court has observed that unless and until a case of irreparable loss
or damage is made out by a party to the suit, the Court should not
permit the nature of the property being changed which also includes
alienation or transfer of the property which may lead to loss or
damage being caused to the party who may ultimately succeed and
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may further lead to multiplicity proceedings.
57. Ordinarily, the recourse to the provisions contained in
sections 2 and 3 of the Partition Act, 1893 can be at the stage of a
decree for partition. However, from the text of section 2 of the
Partition Act, 1893 an inexorable and immutable rule that recourse
to sections 2 and 3 of the Act is not permissible at an interim stage,
cannot be deduced.
58. If upon consideration of all the circumstances, the Court is
satisfied that, in a given case, a decree for partition might have been
made, the Court can proceed to determine whether a case for
exercise of discretion to order the sale of the suit property is made
out. Therefore, the resistance on behalf of the defendants that the
stage is not ripe for considering the recourse to sections 2 and 3 of
the Partition Act, 1893 does not merit acceptance, unreservedly.
Undoubtedly, the change in the status-quo, the maintenance of
which is the norm, until the adjudication of the rights of the parties,
can be permitted only where a justifiable case of irreparable loss or
irretrievable damage is made out. Whether the facts of the case at
hand are such as to warrant exercise of such discretionary power ?
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59. An answer to the aforesaid question will hinge upon the
considerations which inform the exercise of discretion under
section 2 of the Partition Act, 1893, noted above. First and foremost,
the nature of the suit properties. By and large, two factors appear to
be rather incontestable. One, a substantial portion of the suit
properties has been encroached upon. In the application, the
Plaintiffs assert that there is encroachment by more than 20000
slum dwellers, with over 3700 tenements across the portions of
Larger Andheri Property. Second, proceedings have been initiated
for declaration of portions of Larger Andheri Property for
rehabilitation of the slum dwellers under the Slum Act, 1971.
60. It is imperative to note that in an attempt to refute that the
case of the Plaintiff’s that the defendants did not take steps to
challenge the acquisition proceeding or assert their right to
redevelop the properties encroached upon by the slum dwellers, the
defendants have placed on record the copies of appeals preferred
before the Slum Tribunal assailing the acquisition (Exhibit A and
to the affidavit in reply). It appears that in those appeals, the
Plaintiffs and their predecessor in title also joined. (Implication of
this wold be considered while determining the controversy as
regards the disputed properties). To add to this, to the additional
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affidavit, the Plaintiffs have annexed a copy of the notification dated
29th June, 2024 wherein in exercise of the powers conferred by sub
section (1) of Section 14 of the Act and clause (i) of Section 3D of
the Slum Act, 1971, the Government made a declaration to acquire
the properties including the disputed properties and Survey Nos.
401 and 401 (P).
61. The situation which thus obtains is that a large tract of the
Larger Andheri Property has been encroached upon. The
Proceedings have been initiated under the Slum Act, 1971 to acquire
portions of Larger Andheri Property. Indeed the Plaintiffs and the
defendants have assailed the acquisitions by resorting to the
proceedings which they considered appropriate. It is common
knowledge that where the property is encroached upon by slum
dwellers, in a metropolis like Mumbai, where land commands a
premium and there is also a legislative policy to protect the interest
of the persons who happen to be slum dwellers and displaced, the
factum of such large scale encroachment is a relevant
consideration. It must weigh in, in determining whether the
property can be reasonably and conveniently partitioned by metes
and bounds.
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62. The topography of the Larger Andheri Property also deserves
consideration. It is asserted that two big nallas flow across the land.
Those nallas divide Larger Andheri Property into such sub plots as
to render equitable division impracticable. The regulatory
designations in the development plan and provisions for DP Road
reservation for recreation ground etc. put further hindrances in the
equitable division of Larger Andheri Property.
63. Mr. Shah the learned counsel for the defendants would urge
that all the aforesaid difficulties are rooted in facts. At this stage,
the claim of the Plaintiffs cannot be taken at its face value. It was
urged that the report of Nadkarni & Co., Architects, will have to be
tested at the trial. Mr. Shah further urged that the report of M/s.
Shreeya Services Private Limited, Architects, appointed by the
defendants, on the other hand, indicates that equitable partition of
the Larger Andheri Property is possible. Therefore, at this stage, it
cannot be said with certainty that it appears that partition of the
Larger Andheri Property is not reasonably possible.
64. I have perused the reports of Nadkarni & Co., Architects and
M/s. Shreeya Services Private Limited, Architects. It is true, at this
stage, the Court may not be equipped to give precedence to one
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report over another. However, the factors which are taken into
account by respective Architects, can be examined. In the report
dated 1st March, 2024, Nadkarni & Co., has culled out the factors
which, in their opinion, render an equitable sub division of the
Larger Andheri Property or the disputed property, not possible.
The conclusions read as under:
44) As described above, the proposed development plan roads
divide the Larger Property as well s the Truncated Property into
five sub-plots of varying sizes. The existing nallas further sub-
divide two of the sub-plots in the Larger Property and one of the
sub-plots in the Truncated Property into two parts of varying sizes.
Thus the Larger Property is divided into seven parts of varying
sizes by the proposed development plan roads and the existing
nallas, while the Truncated Property is divided into six parts of
varying sizes by the proposed development plan roads and the
existing nallas.
45) As also described above, the sub-plots created out of the Larger
Property and the Truncated Property are affected by a number of
factors viz. Development plan reservation for Garden/ Park (ROS
1.5), co-operative housing societies formed by the slum-dwellers,
existing tabelas (cattle sheds) and highway buffer zones. The areas
affected by these factors vary significantly from sub-plot to sub-plot,
and also overlap each other in varying proportions, resulting in
significant difference in the FSI permissible and consumable on
each of the sub-plots.
46) Moreover, the height restrictions that would be imposed by the
Civil Aviation Authority combined with the sloping nature of the
Larger Property and the Truncated Property would result in further
difficulty in consumption of FSI thereon.
47) Due to the above reasons, an equitable sub-division of the
Larger Property or the Trucated Property into two parts would not
be possible. Any sub-division of the Larger Property or the
Truncated Property will divide such property in an inequitable
manner and one of the parties would have to accept the less than
equitable portion out of the Larger Property or the Truncated
Property.
65. In contrast, in its report, M/s. Shreeya Services Private
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Limited, Architects, professed to propose an equitable distribution
of the Larger Andheri Property. The special circumstances
associated with the property on account of large scale
encroachment by the slum dwellers, existence of large cattle sheds
(tabelas), the effect brought about by the passing of nallas, the
division of the Larger Andheri Property as well as disputed
property into plots on account of passing of nallas, reservation of
lands for DP roads and other designations and overall situation of
the lands so as to afford equitable partition of the property from the
perspective of economic viability and development potential, does
not seem to have been adequately weighed in by M/s. Shreeya
Services Private Limited, Architects.
66. At this juncture, the fact that there is no dispute about the
character of the undisputed joint family properties (as claimed by
the defendants) assumes decisive significance. With the
encroachment of the properties and the resultant litigation as well
as the vicissitudes of fortunes of litigation, having regard to the
numerous stake holders involved therein, the possibility of the
parties succeeding in obtaining actual physical possession of a
substantial part of Larger Andheri Property appears remote.
Conversely, if the properties are not redeveloped by the owners by
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resorting to the provisions contained in the Slum Act, 1971, there is
an imminent possibility of those properties being acquired by the
State Government under the provisions of Slum Act, 1971. It need
not be emphasized that compensation to be awarded under the Slum
Act, 1971 to the owner of the property can never be commensurate
with the development potential of the lands, in a city like Mumbai.
67. In this view of the matter, the submission on behalf of the
Plaintiffs that allowing the status-quo to continue may cause
irreparable loss to both the Plaintiffs and the defendants, can not be
brushed aside lightly. If the other factors which impede the
equitable distribution of the properly, adverted to above, are
considered in juxtaposition with the large scale encroachment of the
subject property, in my considered view, a justifiable case for
exercise of the discretion under sections 2 and 3 of the Partition
Act, 1893 so far as the undisputed joint family properties (out of
Larger Andheri Property) can be said to have been made out.
68. As regards the disputed properties i.e. properties bearing CTS
Nos.397, 397/A and CTS No.397/1 to 284, the Plaintiffs seek to
draw support to their claim that the disputed properties form part
of the property of M/s. RJ Constructions (of which deceased
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Jaysukhlal Bhuta and Ramnikhlal Bhuta were the partners) from
the purported admission on the part of defendants and the
predecessor in title of the defendants. It was submitted that there
are documents of unimpeachable character which record such clear
and explicit admissions. Since these are the admissions in
pleadings, the Plaintiffs assert, they stand on a higher pedestal and
can thus form the basis of an adjudication.
69. Reliance was placed on the copies of the judgments in Appeal
No. 31 of 1981 (Exhibit 3) and Appeal No. 13 of 1986 (Exhibit 4)
delivered by the Maharashtra Slum Tribunal under section 4(3) of
the Slum Act, 1971, jointly preferred by Jaysukhlal and Ramnikhlal
Bhuta and their successors in interest in respect of the properties
bearing CTS Nos.397, 397/A and CTS No.397/1 to 284, respectively.
The Plaintiffs were shown as the owners of the said property along
with the predecessor in title of the defendants. Secondly, the Deed of
Partnership dated 30th March, 1972 between Jaysukhlal and
Ramnikhlal clearly records that Ramnikhlal Bhuta had agreed to
bring in the property situated at Andheri which was then valued at
Rs. 5 lakh in the partnership as his capital.
70. To bolster up the submission that the disputed property was
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the property of the firm, reliance was placed on the Development
Agreement dated 2nd July, 2004 wherein it was, inter alia, recorded
that, Ramnikhlal had acquired the subject properties bearing CTS
Nos. 397, 397/A and CTS No.397/1 to 284 and under the
partnership dated 30th March, 1972 brought the said property as
his capital in the partnership firm and thereupon both Ramnikhlal
and Jaysukhlal acquired the ownership over the said property.
Attention of the Court was also invited to the copy of the plaint in
Suit No. 3179 of 2024 wherein it was asserted that Ramnikhlal and
Jaysukhlal Bhuta were the partners of M/s. RJ Constructions, a
partnership firm, and they owned the property bearing Survey Nos.
397. Ramnikhlal Bhuta had brought the said property into the
partnership firm and thus the Plaintiffs became the owners of the
said property.
71. Mr. Godbole, the learned Senior Advocate for the Plaintiffs,
strenuously submitted that in the face of the aforesaid documents, it
can hardly be contested that the disputed properties form part of
the property of the partnership firm, M/s. RJ Constructions. Once
there is material to show that the properties were brought in the
stock of the firm, the manner in which the properties become the
firm’s property looses significance. Since both the partners have
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passed away and the parties are ad idem that M/s. RJ Constructions
the firm, is required to be dissolved, the first step towards
settlement of accounts would be disposal of the property of the firm.
To this end, Mr. Godbole, placed a heavy reliance on the decision of
the Supreme Court in the case of S.V.Chandra Pandian (supra).
72. In the said case, Supreme Court after tracing the legal
position, enunciated that, “regardless of its character the property
brought into the stock of a firm or acquired by a firm during its
subsistence for the purposes and in the course of its business
shall constitute the property of the firm unless the contract
between the partners provides otherwise. On the dissolution of the
firm each partner becomes entitled to his share in the profits, if
any, after the accounts are settled in accordance with section 48
of the Partnership Act. The mode of settlement of accounts set out
in section 48 clearly indicates that the partnership asset in its
entirety must be converted into money and from the pool the
disbursement has to be made as set out in clause (a) and sub-
clauses (i), (ii) and (iii) of clause (b) and thereafter if there is any
residue that has to be divided among the partners in the
proportions in which they were entitled to a share in the profits of
the firm.”
Vishal Parekar, PS 41/49
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73. Mr. Shah, the learned Senior Advocate, joined the issue by
canvassing a submission that the question as to whether the
disputed properties belong to M/s. RJ Constructions, the
partnership firm or the defendants exclusively, can only be decided
at the trial based on evidence. The institution of the suit to remove
the encroachment over the property or appeal under section 4(3) of
the Slum Act, 1971 claiming that either M/s. RJ Constructions or
both the Plaintiffs and Defendants were the owners of the disputed
properties cannot have determinative significance. As there is a
dispute inter se Plaintiffs and Defendants over the ownership of the
property and the Defendants have instituted independent suit
claiming exclusive ownership over the disputed properties, the
issue can not be decided sans evidence. Mr. Shah submitted that
whether the reciprocal premises under the Partnership Deed were
fully performed so as to divest the exclusive ownership of
Ramnikhlal in the disputed properties, is also a matter which
warrants consideration.
74. Admissions, if true and clear, are considered to be the best
proof of the facts admitted. It is also well recognized that the
admissions in pleadings or judicial admissions made by the parties
stand on a higher footing than evidentiary admissions. Such judicial
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admissions can be made the foundation of the rights of the parties.
In contrast, evidentiary admissions which are receivable at the trial
as evidence are, by themselves, not conclusive. They can be shown
to be wrong. (Nagindas Ramdas vs. Dalpatram Ichharam @ Brijram
And Ors.10).
75. In the case at hand, prima facie, it appears that the fact that
the disputed properties were originally acquired by Ramnikhlal
Bhuta appears incontestable. The claim of joint ownership over the
disputed properties rests on the premise that Ramnikhlal had
brought the disputed properties in the partnership as a partnership
stock. The Deed of Partnership (Exhibit 99) inter alia records that
the parties had agreed that Ramnikhlal who owned the Property at
Andheri, then valued at Rs. 5 lakh, shall bring the same in the
partnership firm as his capital and thereupon the value thereof
shall be credited in the capital account of Ramnikhlal, the first
partner in the books of partnership as the capital brought by him.
76. The Plaintiffs want the Court to believe that the subsequent
Deed and pleadings referred to above indicate that the said exercise
was done and the disputed properties bearing CTS Nos.397, 397A,
397/1 to 284 assumed the character of the property of the firm.
10 1974(1) SCC 242.
Vishal Parekar, PS 43/49
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Whether the disputed properties were impressed with the character
of the properties of the partnership firm, would turn on the
compliance of the reciprocal promises as indicated above and the
adjustment of the accounts of the partners. There is, in my
considered view, an element of controversy as to whether
Ramnikhlal Bhuta was divested of the exclusive ownership in
consideration of the other partner contributing capital to the
partnership firm, as agreed. In the peculiar facts of the case, in my
view, the said question cannot be determined on the basis of the
pleadings in the proceedings instituted by M/s. RJ Constructions or
the Plaintiffs and the Defendants jointly for recovering the
possession of the encroached properties. It would be in the fitness of
things to leave the said question for decision upon appreciation of
evidence.
77. The upshot of aforesaid consideration is that so far as the
undisputed joint family properties, the Court does not find any
impediment in ordering the sale of those properties even at this
stage as such sale appears to be for the benefit of both the parties.
However, as regards the disputed properties, the Court considers it
appropriate to defer the decision to the final disposal of the suit.
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78. This propels me to the appropriateness of the modalities of sell
suggested on behalf of the Plaintiffs. In a sense, the Plaintiffs have
reckoned base price of the Larger Andheri Property at Rs. 165
Crores, and proposed inter se bidding by the Plaintiff and
Defendants so as to bye out the other party. Mr. Godbole submitted
that the Court may devise any other method which protects the
interest of both the parties.
79. Mr. Shah, learned counsel for the Defendants, would, however,
urge that the modality of the sale suggested by the Plaintiffs is
neither just nor equitable. On the one hand, the valuation is too low.
On the other hand, the entire exercise is actuated by a desire to
usurp the property by taking undue advantage of the situation.
80. Prima facie, the mode of sale suggested by the Plaintiffs
especially determination of the sale price by inter se bidding does
not merit countenance. It is imperative to note that under sub
section (1) of section 3, whenever a shareholder applies for leave to
buy at a valuation the share or shares of the party or parties asking
for a sale, the Court is enjoined to order a valuation of shares, in
such a manner as it may think fit and offer to sell the same to such
shareholder at the price so ascertained. If two or more shareholders
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severally apply for leave to buy as provided in sub-section (1), the
Court shall order a sale of the share or shares to the shareholder
who offers to pay the highest price above the valuation made by the
Court. Under section 6 of the Partition Act, 1893, every sale under
section 2 shall be subject to a reserved bidding, and the amount of
such bidding shall be fixed by the Court in such manner as it may
think fit and may be varied from time to time. Sub section (2) of
Section 6 gives liberty to the shareholders to bid at the sale on such
terms as to non-payment of deposit or as to setting off or accounting
for the purchase-money or any part thereof instead of paying the
same as to the Court may seem reasonable. Section 8 of the
Partition Act provides that any order for sale made by the Court
under section 2, 3 or 4 shall be deemed to be a decree within the
meaning of section 2 of the Code of Civil Procedure, 1908.
81. If the discretionary power vested in the Court under the
Partition Act, 1893, is construed in the light of the object of the Act,
1893, adverted to above, it becomes abundantly clear that that the
privilege to buy the share of the co-owner (of the property), can not
be exercised in an oppressive manner. The determination of
reserved price by the Court is a measure to ensure that the
property is sold at an optimum price.
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82. In a situation like the present one, where the property is huge,
encumbered with encroachments and associated disadvantages, the
proper course would be to have the sale by a public auction, where
the true market price of the property is discovered, albeit, by giving
the parties an option to bid in the said public auction without
deposit of earnest money.
83. The ad-hoc base price, as suggested by the Plaintiffs, cannot be
the basis of sale nor can the bidding be restricted to the parties.
Undoubtedly, the parties will have the right to match the offer made
by a stranger purchaser in the auction sale and, thereafter the
parties may bid inter se if they wish to, over and above the said
price discovered in the public auction.
84. For the foregoing reasons, I am inclined to partly allow the
instant application in respect of undisputed joint family properties
out of the Larger Andheri Property.
Hence, the following order.
ORDER
1] The application sands partly allowed.
2] It is hereby declared that the Plaintiffs are the exclusive owners
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of the properties bearing CTS Nos. 402 and 402/1.
3] The prayer to direct the sale of disputed properties i.e. CTS
Nos.397, 397A, 397/1 to 284 stands rejected.
4] The prayer to direct the sale of undisputed joint family properties
(out of ‘Larger Andheri Property’) i.e. properties bearing CTS Nos.
401, 404/A/1, 404/A/2, 404/1 to 39, 422, 422/1 to 15 stands
allowed subject to the following conditions:
(a) The Court Receiver, High Court, Bombay is appointed to
conduct the sale of afore-described undisputed joint family
properties.
(b) M/s. Shetgiri and Associates, Architects is appointed to
assess the value of the afore-described properties and submit a
valuation report to the Court within a period of six weeks so as
to determine the reserve price.
(c) The Court Receiver shall submit a report to the Court, after
receipt of the valuation, indicating the terms and conditions of
sale, which may include:
(i) The sale shall be on “As Is Where Is” and “Whatever
There Is” basis.
(ii) The sale shall be by public auction.
(iii) The parties shall be at liberty to participate in the
bidding without deposit of earnest money and they
shall have the right to match the highest bid
submitted by the stranger purchaser and, thereafter,Vishal Parekar, PS 48/49
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above the price offered by the stranger purchaser, if
any, in the auction sale.
(d) In the event the sale is confirmed, the Court may pass
appropriate orders regarding the disposal and distribution of
the sale proceeds.
5] Application disposed.
6] Costs in cause.
(N.J.JAMADAR, J.)
1. At this stage, Mr. Shailesh Shah, the learned Senior Advocate
for the Defendants seeks stay to the execution and operation of this
order.
2. Since the Court has directed that the valuation report be
obtained so as to determine the reserve price and the Architect
appointed by the Court shall submit a valuation report within a
period of six weeks, no prejudice is likely to be caused to the
defendants as there is ample time to the defendants to move the
appeal court.
3. Oral application for stay thus stands rejected.
(N.J.JAMADAR, J.)
Vishal Parekar, PS 49/49
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