(SMCP1.11) v. Kalpataru (Indo-Saigaon)

Judgment

1. Heard.

2. This suo moto contempt proceedings were initiated pursuant to the order passed by the learned Single Judge dated 25.01.2010.

3. Brief facts giving rise to the said contempt motion are as under:-

4. A suit was filed by Ladharam D. Ahuja, Sundri L. Ahuja and Veena L. Ahuja in the Bombay City Civil Court at Bombay being L.C. Suit No.7318 of 1986 for an order of permanent

injunction restraining the Defendants from committing breach of their obligation to handover shops to Plaintiffs in the scheme of Defendants at Koliwada. Defendant No.1 is a Society registered under the provisions of the Societies Registration Act which had entered into agreement with Defendant No.2 – Madhoban Consultant Pvt. Ltd. and Defendant No.3 – Kalpataru (Indo-Saigon) to construct buildings on the plot of land owned by the Society. According to Plaintiffs, they had booked three shops by paying Rs 10,000/- each. However, Defendants have flouted the scheme and had not handed over the said shops. City Civil Court decreed the suit and directed Defendant Nos. 2 and 3 to give possession of three shops after six months after Plaintiffs paid the said amount of Rs 2,40,000/-. Being 3 (SMCP1.11) aggrieved by the said judgment and order passed by the Trial Court, first appeal was preferred in this Court which was admitted and the ad-interim relief was granted in the Civil Application and execution of the decree was stayed. Thereafter, on 04/07/2008, an order was passed in Civil Application directing Respondent No.1 not to alienate three shops of equivalent area. Thereafter, on 26.08.2008, Civil Application was heard and the learned Single Judge after hearing original Defendants and original Plaintiffs was pleased to grant stay to the execution of the decree after accepting statement which was made by the Counsel appearing on behalf of the original Defendants that the constructed area of 996 sq.ft shown by red colour boundary in the Map marked “X” for identification was reserved for the original Plaintiffs.

5. Thereafter on 16/09/2008, a Civil Application was filed by the original Plaintiffs in which it was stated that the statement made by the original Defendants was not correct and, therefore, it was prayed that the stay which was granted to the execution of the decree should be vacated and the Court Receiver should be appointed in respect of the eight shops. By order dated 26/09/2008, learned Single Judge of this Court, by consent of parties, appointed Commissioner to inspect the site and he was further directed to submit a report. On 22/10/2008, Commissioner submitted a report in which it was stated that the photographs annexed by the original Plaintiffs to the Civil Application were of some 4 (SMCP1.11) other site and not of the shops which were offered as security by Respondent No.1. Thereafter, by order dated 14/11/2008, this Court directed the Court Commissioner to measure the carpet area and also observe the number of accesses which were available to the shop. The Court Commissioner submitted his report stating that that total carpet area of the shop is 933 sq.ft. Carpet. Thereafter, the learned Single Judge of this Court directed that the Municipal Corporation should be added as Respondents and further direction was also given to the Corporation to verify the construction at site and to give status report of the construction. Municipal Corporation filed an affidavit dated 24/11/2009 stating therein that the shop was constructed in R.C.C Slab and brick masonry wall as per the approved plan. It was also stated that layout has been approved by the concerned Department of the Corporation.

6. Thereafter, by an order dated 25/01/2010, the order issuing contempt notice was passed by the learned Single Judge. The learned Single Judge came to the conclusion that prima facie a false statement had been made by original Defendants and, therefore, the impugned order which was passed on 26/08/2008 was vacated and, further, a show cause notice was directed to be issued.

7. The original Defendant Nos. 2 and 3 have filed their detailed affidavit in reply. Mr. V.A. Thorat, the learned Senior Counsel appearing on behalf of Respondent Nos. 1 5 (SMCP1.11) to 3 submitted that, according to original plaintiffs, following statement was a false statement. The learned Counsel appearing for Respondent No.1 made a statement before the Court that in the red colour portion construction admeasuring 996 sq.ft had been completed and it was lying vacant. It was submitted that, alongwith the statement, copy of the sanctioned plan was also tendered in which a portion which was marked in red was supposed to be kept vacant. He submitted that the Municipal Corporation had filed an affidavit in reply in which they had stated that the construction which was made was according to sanctioned plan and the construction was at the site. It was submitted that the map clearly showed that the said portion which was marked in red lines was Shop No.6 and it had only one access. It was submitted that the said area was carpet area and the area which the Plaintiffs were claiming was 300 sq.ft per shop built up area. It was, therefore, submitted that the said area was in addition to what the Plaintiffs were claiming in their suit. It was further submitted that the said shop was earmarked as security which was given by the original Defendants to Plaintiffs. It was further submitted that the photographs which were shown by the original Plaintiffs were found to be of some other site and this was 6 (SMCP1.11) clarified by the Commissioner in his first report. He submitted that at one place the wall was not completely constructed and there was a jally and plastering was not done and, therefore, after the report was submitted, Defendants had completed the said work even prior to the Civil Application for vacating the interim relief was filed by the original Plaintiffs. It was submitted that the interim order which was granted by this Court on 26.8.2008 was vacated by the Court by its order dated 25.01.2010 in Civil Application No.4871/2008 and the original Plaintiffs executed decree and took possession of three shops. It was submitted that, therefore, the show cause notice ought not to have been issued since no such relief was claimed by the original Plaintiffs in their Civil Application.

8. Mr. Anturkar, the learned Senior Counsel appearing on behalf of original Plaintiffs, however, vehemently urged that a false statement had been made and the learned Single Judge had taken cognizance of the said false statement and had rightly issued the show cause notice. It was submitted that it was not open for this Court to say that whether the statement was 70% correct or 80% correct and once it was shown that the statement made was a false statement, the consequences had to follow. He again invited our attention to the order dated 25.01.2010 and submitted that the Court was constrained to issue a show cause notice on account of the false statement. 7 (SMCP1.11)

9. It was further submitted that it was not the case of the Contemnor that the statement was made by the Counsel without any instruction. It was submitted that once it is established that the statement made by the counsel is false, it is not material whether the statement is made on oath or it is made in the form of an undertaking. It is submitted that once it is established that the statement is false, it would constitute contempt of the Court, particularly, since the Court was prompted to pass the order on account of false and misleading statements. It was further submitted that the degree of falsity is relevant and the percentage of the falsehood is not material. It was further submitted that no unconditional apology was tendered in the affidavit in reply though the statement was stated to be false and, therefore, this Court should take a stringent view of the case. It was submitted that a clear statement was made before Shri Justice J.H. Bhatia that the construction is complete. The Commissioner's report clearly shows that the construction is not complete and no completion certificate was produced. It was further submitted that third party interests were created even after the order was passed by this Court on 25th January, 2010. It was further submitted that no flooring was done as on 28th June, 2010. It was lastly submitted that the red portion shown in the plan was only fixed for car parking and, therefore, it was not a constructed area. Reliance was placed on various judgments of the Apex Court in support of the said contention. 8 (SMCP1.11)

10. In order to appreciate the rival contentions, it is necessary to take into consideration the chronology of events. A suit was filed against Respondent Nos. 1 to 3, seeking relief that the Plaintiffs are entitled to get three shops in the scheme of the Respondents at Koliwada, Bombay. The suit was decreed by the Trial Court and the Respondents preferred first appeal in this Court on various grounds. Civil Application No.4719 of 2003 was filed seeking stay to the execution of the decree and the first appeal was admitted and an ad-interim order granting stay to the execution of the decree was passed by this Court on 19/06/2006. The following order was passed on the Civil Application:- “CORAM : DR S. RADHAKRISHNAN, J. DATE : 19TH JUNE, 2006 P.C. Heard the learned Counsel for the appellants and respondent No.1-in person. 2 Rule. Rule made returnable on 4th September, 2006. Respondent No.1 waives service. Pending hearing there shall be ad interim relief in terms of prayer clause (b).” 9 (SMCP1.11) The said Civil Application was finally disposed of by order dated 26/08/2008 passed by the learned Single Judge (Coram: J.H. Bhatia, J.). in which the Court made the following observation in para 2 :- “2. ................... The learned Counsel for the appellant has filed a Map marked “X” for identification. In that map certain portion is shown by red colour boundary. According to him, in this portion, the construction of 996 sq.ft. has already been completed and it is vacant. Besides this, there are two portions shown in orange colour within the red lines. He states that construction on that portion is yet to be made only after obtaining necessary permission. He also makes a statement that as and when the construction is made on that orange coloured portion, it will also be kept reserved for allotment to the plaintiffs/respondents in case they succeed........” (Emphasis supplied) Much emphasis has been laid on the said statement which was made by the learned Counsel appearing on behalf of the 10 (SMCP1.11) appellant and, according to original Plaintiffs, the said statement was false.

11. After the said Civil Application was disposed of, original Plaintiffs took out Civil Application No.4871 of 2008, seeking direction that the Company should handover three shops admeasuring 300 sq.ft each and for action being taken against Respondent No.1 for making a false statement and for appointing the Court Receiver upon the eight shops.

12. When the said Application No.4871 of 2008 came up for hearing before the learned Single Judge (Coram: J.H. Bhatia, J.), it was pointed out that photographs which were annexed to the Civil Application No.4871 of 2008 were of some other premises and not of the suit structure and, therefore, by consent of parties, Commissioner was appointed to take inspection.

13. The Commissioner submitted his report and pointed out that the photographs which were annexed to the Civil Application were not of the property in question but of some entirely different property. Thereafter, by an order dated 14/11/2008, brother R.S. Mohite, J. again directed the Commissioner to visit the site and submit his report regarding total carpet area offered as security. Accordingly, the Commissioner again submitted a report and it was stated that the total carpet area of the Shop was 933.79 sq.ft equivalent to 1008.75 built up area. In the report, it 11 (SMCP1.11) was also stated that the portions of backside and adjacent wall are not constructed. When this fact was brought to the notice of Respondent No.1, measures were taken to complete the construction. The Commissioner also made a statement that carpet area was 933.79 sq.ft equivalent to

1008.75 sq.ft built up. Thereafter, Municipal Corporation was also added as party-respondent and an affidavit dated 24/11/2009 was filed by the Corporation and, in that affidavit, it was stated that the shop was constructed in R.C.C. frame structure with R.C.C. slab and brick masonry wall as per the approved plan and the layout had been approved by the concerned Department and, therefore, the area of 996 sq.ft offered as security did exist. The matter was thereafter heard by the learned Single Judge (Coram: Smt. SondurBaldota, J.) who was pleased to grant the Civil Application by order dated 25.1.2010. The operative part of the said order reads as under:- O R D E R 1) The interim order dated 26th August 2008 allowing the Civil Application No.4719 of 2003 in terms of prayer clause (b) is set aside and the Civil Application is restored to file for hearing. 2) The respondent no.1 shall not create any third party rights over shops Nos. 1 to 12 (SMCP1.11) 5, 7 and 8, which are adjoining to portion marked in red colour from the plan sanctioned by Mumbai Municipal Corporation on 6th May 2005, pending the hearing of the Civil Application No.4719 of

2003. 3) Office is directed to issue notice to the Directors of respondent No.1 to show cause as to why action in contempt should not be taken against them for making a false statement to the Court on 26th August, 2008 for obtaining the judicial order from the Court. 4) The respondent No.1 to pay costs quantified at Rs 25,000/- to the applicants in one set.” This order was confirmed by the Apex Court and in view of direction given in clause (3) of the operative part of the said order by the learned Single Judge, show cause notice was issued to Respondent No.1.

14. From the aforesaid facts and the documents which are annexed to the Contempt Petition, it can be seen that the Municipal Corporation has filed an affidavit confirming the construction of the shop as per the approved plan and also 13 (SMCP1.11) confirming that the area of 996 sq.ft offered as security does exist. Secondly, it is an admitted position that when the statement of Respondent No.1’s Counsel was recorded by the learned Single Judge in his order dated 26/8/2008, no objection was raised on behalf of the Plaintiffs or their Counsel. It is also not disputed that the map which was marked “X” for identification and which was produced in the Court was the plan sanctioned by the Municipal Corporation and in that plan it had been shown that there was only one access. It is only after execution of decree was stayed on this statement, subsequent application was taken out inter alia to get the stay vacated which was granted by the learned Single Judge. It has to be noted that in view of the stay order being vacated by the learned Single Judge by order dated 25/1/2010, Plaintiffs executed the decree and got possession of the three shops though the first appeal is still pending in this court. Court Receiver has also taken possession of all other eight shops. It has also to be noted that, initially, when the Civil Application was taken out by the Plaintiffs, some photographs were annexed and in the said application it was claimed that the premises did not exist. The first report which was submitted by the Commissioner clearly establishes that those photographs were not the photographs of the suit premises but of some other premises. It is obvious that an attempt was made to mislead the court so that interim stay to the execution of the decree which was granted should be vacated. It is no doubt true that though the premises was in existence and was duly 14 (SMCP1.11) sanctioned by the Corporation, it was not completely ready since there was some unfinished work which had to be completed and when this was brought to the notice of Respondent No.1 after first report, immediately the said work was completed and, therefore, on the date on which the Civil Application was heard by the learned Single Judge i.e. on 25/1/2010, the work had been completed. Under these circumstances, in our view, it could not be said that Respondent No.1 had made a false statement as alleged by the Plaintiffs since the premises was in existence in respect of 933 sq.ft carepet area. It has to be noted that the area claimed by the Plaintiffs was 300 sq.ft built up in respect of each shop. The said premises was in existence and it was approved and sanctioned by the Corporation. Under these circumstances, therefore, in our view, it cannot be said that the statement made by the Counsel for Respondent No.1 and which was recorded by the learned Single Judge was false and, therefore, the show cause notice issued against Respondent No.1 will have to be discharged.

15. It has to be noted that on the same analogy, even a show cause notice could have been issued to Plaintiffs for making a false statement in Civil Application by annexing photographs of some other premises which fact was established by the Commissioner’s Report. It has to be remembered that in adversarial litigation, very often, incorrect statements are made and if on each and every occasion Court starts issuing contempt notices against the 15 (SMCP1.11) litigants, the Court will have to spend most of its precious time in dealing with these contempt notices.

16. The learned Counsel appearing on behalf of Plaintiffs has relied upon number of judgments of the Apex Court and this Court. In our view, it is not necessary to refer to the said judgments since the ratio of the said judgments is not applicable to the facts of this case.

17. The show cause notice is discharged. Contempt Petition is accordingly disposed of. (A.M.THIPSAY, J.) (V.M. KANADE, J.) 16 (SMCP1.11)