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Judgment
B.S. Patil, J.—In these writ petitions, Petitioners are aggrieved by the order dated 08.04.2011 passed by the learned City Civil Judge, Bangalore City, dismissing the application filed seeking a direction to Defendant No. 1 - Respondent No. 1 herein to deposit the amount received from Defendant Nos. 17 & 18 in a sum of rupees six crores along with interest from 28.05.2007 till the date the amount is credited.
Petitioners herein are Plaintiff Nos. 11 to 18 in the Trial Court. They have filed the suit O.S. No. 8230/2007 along with Respondent Nos. 19 to 28 herein seeking partition in respect of the plaint schedule properties. According to the Petitioners, though Defendant No. 1 has admitted in the written statement that the suit schedule properties are the joint family properties, without having any exclusive right over the properties he has received substantial amount of rupees six crores vide cheque dated 28.5.2007 from Respondents 2 & 3 herein and that the said amount was received pursuant to a joint development agreement which he has executed with Respondents 2 & 3. It is the contention of the Plaintiffs that Defendant. No. 1 has been enjoying the said substantial amount dishonestly and falsely representing that he was the karta of the family. It is also contended by them that the alleged joint development agreement dated 28.05.2007 was a created, manipulated and fraudulent one. it is in this background, that the Petitioners caused a legal notice dated 20.04.2010 to Defendant No. 1 calling upon him to deposit the amount of rupees six crores received by him along with interest.
I.A. No. 12 came to be tiled by the Plaintiffs seeking a direction to Defendant No. 1 to deposit the amount in the pending suit. The said application was resisted.
The Trial Court has rejected the same holding that the said amount reflected the refundable deposit payable to Defendant No. 17 soon after the completion of the construction of the apartments or in the event of non-completion of the project, therefore, the same could not be termed as enrichment by Defendant No. 1 as sought to be contended by the Plaintiffs.
I have heard the learned Counsel for the parties and perused the pleadings and the impugned order.
It is not in dispute that the suit schedule properties which are the subject matter of the joint venture are all joint family properties, wherein the Plaintiffs have got undivided share. In fact, Defendant No. 1 has admitted in the written statement that he has entered into this agreement with Defendant Nos. 17 & 18 in his capacity as the karta of the family. According to him, by entering into the said joint development agreement, he has not spent any amount at all, on the other hand, he has raised the requisite funds as per the agreement and was going to get back the owner''s share of the constructed area which would, in the long run, benefit the family.
As can be seen from the agreement which is produced at Annexure-C, the joint development agreement is allegedly executed by all the members of the joint family, numbering in all, thirty. The members are said to be represented by their authorised signatory Mr. Sajjan Raj Sankla - Defendant No. 1. The Trial Court has not recorded any finding regarding the respective contentions urged by the parties. No. prima facie finding is recorded regarding the authority conferred by the Plaintiffs on Defendant No. 1 to enter into such an agreement so as to bind their shares and regarding the assertion made by Defendant No. 1 that he has acted as karta of the family In fact Defendant No. 1 has taken inconsistent stand, inasmuch as, at one stage, he asserts that he has acted as karta, whereas, as can be seen from the agreement itself, he claims to represent the members of the family as their authorised signatory also. Whether there is am/ such valid authority given by executing a Power of Attorney or any other document is not forthcoming. The Trial Court has simply rejected the application holding that Defendant No. 1 was not liable to deposit the amount of rupees six crores which was received as refundable deposit on completion of the project or if the project failed to come through. In the opinion of the Trial Court, the receipt of such amount in such circumstances could not be termed as enrichment by Defendant No. 1 and hence No. direction could be issued to Defendant No. 1 to deposit the amount with interest.
After the conclusion of the arguments in these writ petitions, it was submitted by Sri Shaker Shetty, counsel for Respondent No. 1 that Respondent No. 1 was prepared to file an affidavit stating that the joint development agreement had not been acted upon and had fallen through and therefore No. obligations were incurred by the Petitioners under the said agreement and that Respondent No. 1 - Defendant No. 1 was prepared to pay back the entire amount to Respondent Nos. 2 & 3 herein. In the light of this submission, the matter was adjourned to enable Respondent No. 1 to file an affidavit in that regard.
Pursuant to the said order; an affidavit dated 05.07.2011 is filed by Defendant No. 1, wherein it is stated that pursuant to the joint development agreement dated 28.05.2007 entered into with Respondent Nos. 2 & 3, a sum of rupees six crores has been received by him out of rupees twenty crores and as Respondent Nos. 2 & 3 did not pay the balance amount due to inability of the owners i.e. Defendant No. 1 and other co-owners to get the conversion and the sanction plan for the development and also in view of the litigation. According to the assertion made, the agreement was not acted upon. It is also stated that Defendant No. 2 was demanding refund of the security deposit of rupees six crores as the agreement could not be implemented and therefore the question of depositing any portion of the amount in a Court would not arise. He has further stated that he was prepared to refund the security deposit, the moment the cancellation agreement of the joint development agreement was executed.
This affidavit does not conform to the submission made stating that the Petitioners herein had not incurred any obligation under the said agreement and that Respondent No. 1 was prepared to pay back the entire amount to Respondent Nos. 2 & 3. It only states that the amount would be paid once the cancellation deed was executed. It is not known when the said cancellation deed is going to be executed and until then, how the amount of rupees six crores which is received by Defendant No. 1 from Respondent Nos. 2 & 3 allegedly for and on behalf of the family is going to be utilised is not forthcoming from the affidavit.
As rightly contended by the counsel for the Petitioners, Defendant No. 1 cannot use such huge amount of rupees six crores for himself and endanger the interest of the Plaintiffs who have admittedly got share in the properties. The Plaintiffs are all majors. They are not the signatories to the agreement, nor is there any authority or power conferred by them in favour of Defendant No. 1 to enter into this transaction. Therefore, as the very joint development agreement entered into by Defendant No. 1 is characterised by the Petitioners as a created, fabricated and manipulated one, the interest of the Petitioners cannot be put to peril by allowing Defendant No. 1 to keep that amount with him or to make use of it to the detriment of the Plaintiffs. Hence, I am of the clear view that the Court below was in error in rejecting the application with out considering the relevant fact situations.
In the light of the above, these writ petitions are allowed in part. The impugned order is set aside. Defendant No. 1 is directed to deposit the share of the Plaintiffs out of the amount of rupees six crores received by him, before the Court below within a period four weeks from today. Whereupon, the said amount shall be invested in Fixed Deposit in any Nationalised Bank initially for a period of one year. Further, this deposit will be subject to the further orders to be passed by the Court below, keeping in mind the changed circumstances that may present in future including the cancellation of the joint venture. Parties will be at liberty to seek appropriate further orders from the Court below with regard to this amount. All other contentions are kept open.