## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
# **PRESENT**
## **THE HONOURABLE MR. JUSTICE A.HARIPRASAD**
**&**
## **THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI**
**TUESDAY, THE 20TH DAY OF AUGUST 2019 / 29TH SRAVANA, 1941**
## **FAO.No.137 OF 2019**
**AGAINST THE ORDER IN I.A.NO.4272/2018 IN OS 230/2018 DATED 04-07-2019 OF III ADDITIONAL SUB COURT, ERNAKULAM**
## **APPELLANT/PETITIONER:**
**P.J.JOSE, AGED 56 YEARS**
**S/O.JOSEPH, PARAMBATHUSSERY HOUSE, MARY MATHA ROAD, VAZHAKKALA, KOCHI- 682021.**
**BY ADV. SRI.TOM K.THOMAS**
## **RESPONDENT/RESPONDENTS/PETITIONER IN I.A.NO.193/2019:**
**1 M/S.CORAL SHELTERS AND BUILDERS PVT LTD., HAVING ITS CORPORATE OFFICE AT 36/1842, NH 47 BYPASS, VENNALA P.O., KOCHI- 682028, REPRESENTED BY ITS MANAGING DIRECTOR, MR.SUNIL K.SREEDHAR.**
**2 MR.SUNIL K.SREEDHAR, S/O.K.K.SREEDHARA, MANAGING DIRECTOR, M/S.CORAL SHELTERS AND BUILDERS PVT.LTD., HAVING ITS CORPORATE OFFICE AT 36/1842, NH 47 BYPASS, VENNALA P.O., KOCHI- 682028.**
**3 SHAREEF, AGED 56 YEARS**
**S/O.VELUTHEDATH AHAMMED, CHUTTUPADU KARA, EDAPALLY NORTH VILLAGE, KANAYANNUR TALUK, ERNAKULAM DISTRICT, PIN- 682018.**
**4 HASEEB.A., AGED 55 YEARS**
**S/O.ABDULLAH, MARIYAS HOUSE, 43/2582, SRM ROAD, PEEDIEKKAL LANE, ERNAKULAM VILLAGE, KANAYANNUR TALUK, ERNAKULAM DISTRICT, PIN- 682018.**
F.A.O.No.137/2019 & R.F.A.No.6 of 2019
2
- **5 P.C.USMAN,**
- **AGED 46 YEARS**
- **S/O.ALI, PALLIKKACHALIL, KANJIROD DESOM, KANAYANNUR TALUK, ERNAKULAM DISTRICT, PIN- 682018.**
- **6 ABDUL HAKKEEM, AGED 59 YEARS**
**S/O.AHAMMED, CHAMBOKADAVIL, CHUTTUPADU KARA, EDAPALLY SOUTH VILLAGE, KANAYANNUR TALUK, ERNAKULAM DISTRICT, PIN- 682024.**
- **7 K.A.YUNAS, AGED 76 YEARS**
**S/O.ABDULLAH, PAREPARAMB HOUSE, MASJITH ROAD, KALOOR DESOM, ELAMKULAM VILLAGE, KANAYANNUR TALUK, ERNAKULAM DISTRICT, PIN- 682017.**
- **8 MARZOOK, AGED 60 YEARS**
**S/O.AHAMED HAJI, MARIYAS HOUSE, 43/2582, SRM ROAD, PEEDIEKKAL LANE, ERNAKULAM VILLAGE, KANAYANNUR TALUK, ERNAKULAM DISTRICT, KOCHI- 682018.**
- **9 K.NISAR, AGED 56 YEARS S/O.AHAMMED, 'MINA', THALASSERY DESOM, KANNUR DISTRICT, PIN- 670671.**
- **10 ISMAIL, AGED 62 YEARS**
**S/O.HASSAN, KIZHAKKE THYVELIKKAKAM, ALAPPUZHA DESOM, ALAPPUZHA SOUTH VILLAGE, AMBALAPPUZHA TALUK, ALAPPUZHA DISTRICT, PIN- 688001.**
## **11 UVAIS, AGED 28 YEARS**
**S/O.AHAMED SHEREEF, VELUTHEDATH, CHUTTUPADU KARA, EDAPALLY NORTH VILLAGE, KANAYANNUR TALUK, ERNAKULAM DISTRICT, PIN- 682024.**
- **12 CORAL ARIEL ALLOTTEES' ASSOCIATION HAVING ITS REGISTERED OFFICE AT FLAT NO.8C, SOUTH BLOCK, ABAD ORIENTAL GARDEN, MAMANGALAM, POTTAKUZHI ROAD, ELAMAKKARA P.O., COCHIN-682026, REPRESENTED BY ITS SECRETARY, VINOD KUMAR.M., RESIDING AT MOONUKULANGARA HOUSE, KANJOOR, PARAPURAM P.O, ERNAKULAM- 683575.**
F.A.O.No.137/2019 & 3 R.F.A.No.6 of 2019
**R3-11 BY ADV. SRI.ANIL S.RAJ R3-11 BY ADV. SMT.K.N.RAJANI R3-11 BY ADV. SRI.RADHIKA RAJASEKHARAN P. R3-11 BY ADV. SMT.ANILA PETER R3-11 BY ADV. SRI.SAJEN THAMPAN R12 BY ADV. SRI.B.J.JOHN PRAKASH**
**THIS FIRST APPEAL FROM ORDERS HAVING BEEN FINALLY HEARD ON 09.08.2019 ALONG WITH RFA (MISC.).6/2019, THE COURT ON 20.08.2019 DELIVERED THE FOLLOWING:**
F.A.O.No.137/2019 & R.F.A.No.6 of 2019
4
## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
## **THE HONOURABLE MR. JUSTICE A.HARIPRASAD**
**&**
**THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI**
**TUESDAY, THE 20TH DAY OF AUGUST 2019 / 29TH SRAVANA, 1941**
## **RFA (MISC.).No.6 OF 2019**
**AGAINST THE ORDER IN I.A.NO.193/2019 IN I.A.NO.4272/2018 IN OS 230/2018 OF III ADDITIONAL SUB COURT,ERNAKULAM**
## **APPELLANT/RESPONDENT:**
**P.J.JOSE AGED 56 YEARS S/O. JOSEPH ,**
**PARAMBATHUSSERY HOUSE, MARY MATHA ROAD, VAZHAKKALA, KOCHI 682 021.**
**BY ADV. SRI.TOM K.THOMAS**
## **RESPONDENTS/RESPONDENTS/PETITIONER IN I.A.NO.193/2019:**
- **1 M/S. CORAL SHELTERS AND BUILDERS PVT LTD HAVING ITS CORPORATE OFFICE AT 36/1842, NH 47 BYPASS, VENNALA P.O, KOCHI 682 028, REPRESENTED BY ITS MANAGING DIRECTOR, MR. SUNIL. K. SREEDHAR.**
**2 MR. SUNIL K. SREEDHAR, AGED 48 YEARS, S/O.K.K.SREEDHARA MANAGING DIRECTOR, M/S. CORAL SHELTERS AND BUILDERS PVT. LTD., HAVING ITS CORPORATE OFFICE AT 36/1842, NH 47 BYPASS, VENNALA P.O., KOCHI 682 028.**
**3 SHAREEF, AGED 56 YEARS S/O. VELUTHEDATH AHAMMED, CHUTTUPADU KARA, EDAPALLY NORTH VILLAGE, KANAYANNUR TALUK, ERNAKULAM DISTRICT 682 018.**
F.A.O.No.137/2019 & R.F.A.No.6 of 2019
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- **4 HASEEB.A. AGED 55 YEARS S/O. ABDULLAH, MARIYAS HOUSE, 43/2582, SRM ROAD, PEEDIEKKAL LANE, ERNAKULAM VILLAGE, KANAYANNUR TALUK, ERNAKULAM DISTRICT 682 018.**
- **5 P.C. USMAN, S/O.ALI AGED 46 YEARS PALLIKKACHALIL, KANJIROD DESOM, KANAYANNUR TALUK, ERNAKULAM DISTRICT 682 018.**
- **6 ABDUL HAKKEEM, AGED 59 YEARS**
- **S/O. AHAMMED, CHAMBOKADAVIL, CHUTTUPADU KARA, EDAPALLY SOUTH VILLAGE, KANAYANNUR TALUK, ERNAKULAM DISTRICT 682 024.**
- **7 K.A. YUNAS, AGED 76 YEARS S/O. ABDULLAH,**
- **PAREPARAMB HOUSE, MASJITH ROAD, KALOOR DESOM, ELAMKULAM VILLAGE, KANAYANNUR TALUK, ERNAKULAM DISTRICT 682 017.**
- **8 MARZOOK, AGED 60 YEARS S/O. AHAMED HAJI, MARIYAS HOUSE, 43/2582, SRM ROAD, PEEDIEKKAL LANE, ERNAKULAM VILLAGE, KANAYANNUR TALUK, ERNAKUAM DISTRICT, KOCHI 682 018.**
**9 K. NISAR, AGED 56 YEARS S/O. AHAMMED, 'MINA', THALASSERY DESOM, KANNUR DISTRICT, 670 671.**
**10 ISMAIL, AGED 62 YEARS**
**S/O. HASSAN, KIZHAKKE THYVELIKKAKAM, ALAPPUZHA DESOM, ALAPPUZHA SOUTH VILLAGE, AMABALAPPUZHA TALUK, ALAPPUZHA DISTRICT 688 001.**
**11 UVAIS, AGED 28 YEARS S/O. AHAMMED SHEREEF, VELUTHEDATH, CHUTTUPADU KARA, EDAPALLY NORTH VILLAGE, KANAYANNUR TALUK, ERNAKULAM DISTRICT 682 024.**
F.A.O.No.137/2019 & 6 R.F.A.No.6 of 2019
**12 CORAL ARIEL ALLOTTEES' ASSOCIATION, HAVING ITS REGISTERED OFFICE AT FLAT NO.8C , SOUTH BOCK ABAD ORIENTAL GARDEN MAMAGALAM,POTTAKUZHI ROAD, ELAMAKKARA P.O., COCHIN 682 026, REPRESENTED BY ITS SECRETARY, VINOD KUMAR, M., RESIDING AT MOONUKULANGARA HOUSE, KANJOOR, PARAPURAM P.O., ERNAKULAM 683 575. ADV.ANIL S. RAJ FOR R3 TO R11**
**THIS REGULAR FIRST APPEAL(MISCELLANEOUS) HAVING BEEN FINALLY HEARD ON 09.08.2019, ALONG WITH FAO.137/2019, THE COURT ON 20.08.2019 DELIVERED THE FOLLOWING:**
**A.HARIPRASAD &**
## **R.NARAYANA PISHARADI, JJ.**
**************************** F.A.O.No.137 of 2019 & R.F.A.No.6 of 2019 ---------------------------------------------Dated this the 20[th] day of August, 2019
## **J U D G M E N T**
## **R.Narayana Pisharadi, J**
The appellant is the plaintiff and the respondents are the defendants in the suit. Challenge in F.A.O No.137 of 2019 is directed against the order passed by the Sub Court, Ernakulam dismissing the application I.A.No.4272 of 2018 filed by the plaintiff under Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908 (hereinafter referred to as "the Code") and withdrawing the interim attachment. The appeal, R.F.A (Misc) No.6 of 2019, is filed by the plaintiff challenging the order passed by the same court, allowing the claim petition filed by defendant No.12, who was not a party to the application I.A.No.4272 of 2018.
2. The averments in the plaint can be briefly stated as follows: Defendants 3 to 11 are the joint owners of the plaint schedule property, which is a land having a total extent of
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183.51 Ares, lying contiguously as a single plot. The second defendant is the Managing Director of the first defendant company. Defendants 3 to 11 on the one part and the first defendant company on the other part entered into a joint venture agreement on 07.05.2008. As per this agreement, the first defendant was entrusted with the development of the plaint schedule property and construction of apartments and villas in the name 'Coral Utopia'. As per the agreement executed on 18.02.2012, the first defendant entrusted the construction work of Block No.1, having 16 floors, with the plaintiff. The plaintiff has done work for a total amount of Rs.456,49,401.85/-. The period fixed for completion of the work was 12 months but it was extended by mutual consent. The plaintiff had discharged his obligations under the agreement with the first defendant company. However, the first defendant made default in payment of the amount claimed by the plaintiff as per the running bills issued by him. The work was abandoned by the first defendant from October, 2016. As on the date of the suit, the amount due to the plaintiff is Rs.97,75,902/and with interest @ 12% from the last date of payment, the amount due to him comes to Rs.122,19,877/-. The plaintiff is entitled to realise this amount with interest from defendants 1 to 11.
3. In the application filed by the plaintiff for attachment before
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9
judgment, the court below issued notice to defendants 1 to 11 to show cause why security shall not be furnished by them for an amount of Rs.122,20,000/- and also passed a conditional order for attachment of the plaint schedule property. The first and the second defendants remained ex parte in the application for attachment. Defendants 3 to 11 jointly filed a counter affidavit contending that the court below has no territorial jurisdiction to entertain the suit and that the suit is barred by limitation. They also contended that there is no privity of contract between them and the plaintiff and they are not liable to pay any amount to the plaintiff. They also denied the averments in the plaint on the basis of which the plaintiff claimed the amount from them.
4. Defendant No.12 in the suit, who was not a party to the application filed under Order XXXVIII Rule 5 of the Code, filed an application as I.A.No.193/2019 under Order XXXVIII Rule 8 of the Code claiming right over apartment Nos.6D, 7E, 8B, 9C and 10E and for releasing the aforesaid apartments from attachment. At this juncture, it is to be noted that defendant No.12 is an association by name 'Coral Ariel Allottees' Association.
5. The court below considered the application filed by the plaintiff under Order XXXVIII Rule 5 of the Code and also the
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10
application filed by defendant No.12 under Order XXXVIII Rule 8 of the Code together. The court below found that, prima facie, it has got territorial jurisdiction to entertain the suit. The court below also found that, prima facie, there is no privity of contract between the plaintiff and defendants 3 to 11 or defendant No.12 and if at all any amount is due to the plaintiff, the first defendant is liable to pay it. The court below found that the first and the second defendants have got no right over any portion of the plaint schedule property or the apartments or villas. The court below also found that the apartments 6D, 7E, 8B, 9C and 10E had been sold to third parties. On the basis of the aforesaid findings, the court below dismissed the application filed by the plaintiff under Order XXXVIII Rule 5 of the Code and allowed the application filed by defendant No.12 under Order XXXVIII Rule 8 of the Code and ordered to withdraw the attachment over the plaint schedule property.
6. We have heard learned counsel for the appellant and also the respondents in the two appeals, except the first and the second respondents, who are the first and the second defendants in the suit. In view of the order proposed to be passed by us and also considering the fact that the first and the second defendants remained ex parte in the court below in the proceedings, we felt it not necessary to issue notice to them in these appeals.
F.A.O.No.137/2019 & R.F.A.No.6 of 2019
11
7. Learned counsel for defendants 3 to 11 has raised the contentions regarding limitation and absence of territorial jurisdiction of the court below to entertain the suit before this Court also. Prima facie, on the basis of the averments in the plaint, we are of the view that the court below has got territorial jurisdiction to entertain the suit. The plea raised by the defendants with regard to bar of limitation requires consideration of disputed facts as to payments made to the plaintiff by the first and the second defendants. Therefore, we do not express any opinion in that regard and we leave that question open to be decided by the court below at the appropriate stage.
8. There is no dispute with regard to the fact that the plaint schedule property belongs to defendants 3 to 11. There is also no dispute with regard to the fact that defendants 3 to 11 had entered into a joint venture agreement with the first defendant company on 07.05.2008 for development of the plaint schedule property and construction of residential apartment buildings and villas in it. There is also no dispute with regard to the fact that the first defendant company, as per the agreement executed on 18.02.2012, had entrusted the work of construction of Block No.1 with the plaintiff.
9. The averments in the plaint would show that the plaintiff has
got a prima facie case for realisation of the amount claimed in the suit
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from the first defendant company. But the fact remains that there is no privity of contract between the plaintiff and defendants 3 to 11. In such circumstances, the plaint schedule property, which belongs to defendants 3 to 11, as such cannot be attached for securing the amount due to the plaintiff from the first and the second defendants.
10. However, the question arises whether the first and the second defendants have got any right or interest over the plaint schedule property which could be attached for securing the amount due from them to the plaintiff.
11. The joint venture agreement executed by defendants 3 to 11 and the first defendant company would show that the first defendant had acquired equitable interest over the plaint schedule property. Clause (7) of the joint venture agreement provides that, the developer shall be entitled to 75% of the saleable area of the proposed residential apartment building and 60% of the saleable area of the proposed independent villas and proportionate common areas and common facilities, as consideration for developing the property at their expenses. Clause (8) of the joint venture agreement provides that, the developer shall have absolute right to dispose of or appropriate the said 75% of the saleable area of the proposed residential apartment building and 60% of the saleable area of the
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proposed independent villas falling in their share together with the right to use common areas and common facilities and to appropriate the sale proceeds thereof. Clause (9) of the joint venture agreement provides that, the developer is entitled to enter into agreement for sale and construction of apartments having 75% of the total saleable area and 60% of the saleable area of the proposed independent villas and sell the proportionate undivided share in the property with intending purchasers without the junction of the land owners.
12. Section 54 of the Transfer of Property Act (hereinafter referred to as 'the Act') defines `sale' as a transfer of ownership in exchange for price paid or promised or part- paid and part-promised. A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. As per Section 54 of the Act, a contract for the sale of immovable property does not, of itself, create any interest in or charge on such property. However, Section 40 of the Act recognises an obligation arising out of contract and annexed to the ownership of immovable property, but not amounting to an interest.
## 13. In **Bai Dosabai v. Mathurdas Govinddas : AIR 1980 SC**
**1334** , the Supreme Court has held as follows:
- _“We have to notice that many of the principles of_
F.A.O.No.137/2019 & R.F.A.No.6 of 2019
14
_English Equity have taken statutory form in India and have been incorporated in occasional provisions of various Indian statutes such as the Indian Trusts Act, the Specific Relief Act, Transfer of Property Act etc. and where a question of interpretation of such Equity based statutory provisions arises we will be well justified in seeking aid from the Equity source. ...... The ultimate paragraph of Section 54 of the Transfer of Property Act, expressly enunciates that a contract for the sale of immovable property does not, of itself, create any interest in or charge of such property. But the ultimate and penultimate paragraph of Section 40 of the Transfer of Property Act make it clear that such a contract creates an obligation annexed to the ownership of immovable property, not amounting to an interest in the property, but which obligation may be enforced against a transferee with notice of the contract or a gratuitous transferee of the property. Thus the equitable ownership in property recognised by Equity in England is translated into Indian law as an obligation annexed to the ownership of property, not amounting to an interest in the property, but an obligation which may be enforced against a transferee with notice or a gratuitous transferee''._
14. What emerges from the above discussion is that notwithstanding the fact that an agreement for sale of an immovable property creates no interest in, or charge on the property, at the same time, it creates an obligation annexed to the ownership of the property and this obligation is specifically enforceable. This is a principle based
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15
on equity which has got statutory recognition by virtue of Section 40 of the Act.
15. The court below has not considered whether the the first defendant company has acquired any right or interest in the plaint schedule property, by virtue of the provisions contained in the joint venture agreement, and whether any such right could be attached.
16. But, in order to examine the aforesaid question, the specific portion of the plaint schedule property or the apartment or villa over which the first defendant company has acquired right, if any, has to be identified by the plaintiff and he may seek attachment of such specified portion of the property or apartments or villas. The court below has found that the plaintiff had prayed for attachment of the entire plaint schedule property and the improvements therein. Learned counsel for the appellant would contend that the plaintiff had sought attachment only over five apartments having a super built-up area of 1500 sq.ft each along with the proportionate undivided share in the property. It is true that as per the averment in the affidavit filed in support of the application for attachment, the claim for attachment is made only in respect of five apartments. However, on a perusal of the copy of the application for attachment made available to us for perusal, it is seen that no schedule is attached to that application.
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16
17. It is well-settled that attachment before judgment intends to protect the interests of a plaintiff in a suit where it is apprehended that the defendant, with intent to obstruct or delay the execution of any future decree, would dispose of his property. The object of Order XXXVIII Rule 5 of the Code is to prevent any attempt on the part of the defendant to defeat the fruits of the decree that may be passed against him. It is a sort of guarantee against the decree becoming infructuous for want of property. In the instant case, there is no averment in the affidavit filed by the plaintiff in support of the application for attachment that it is with the intention to obstruct or delay the execution of the decree that may be passed against them that the defendants 1 to 11 were taking steps to dispose of their property. Absence of such an averment is fatal to an application for attachment before judgment.
18. Inspite of the aforesaid lacunae in the application for attachment before judgment filed by the plaintiff, considering the peculiar circumstances of the case where the first and the second defendants have put not only the plaintiff but also defendants 3 to 11 in a precarious situation, we find it proper to give an opportunity to the plaintiff to cure the defects in the application for attachment before judgment by filing additional affidavit or by filing application for
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amendment of the application and to direct the court below to consider the matter afresh and pass appropriate orders after hearing the parties.
19. In the counter affidavit filed by defendants 3 to 11 in the application for attachment, it is stated that there are 12 apartments yet to be sold. If the plaintiff is able to identify the aforesaid apartments and seek attachment over them, the court may consider whether the first and the second defendants have got any equitable right as mentioned earlier over those apartments and whether attachment before judgment could be effected on such apartments.
20. The application I.A.No.193/2019 was filed by defendant No.12 for withdrawing the attachment over apartment Nos.6D, 7E, 8B, 9C and 10E in the plaint schedule property. The application was made on the plea that the aforesaid apartments had been sold to five persons. Defendant No.12 did not produce any document before the court below to show that it has got any right or title over the aforesaid apartments. No document was produced to show that the aforesaid apartments had been sold to third parties. Even in the absence of any such documents, the court below accepted the plea of defendant No.12 and allowed the application I.A.No.193/2019. In the absence of any materials produced by defendant No.12 to prove right over the
F.A.O.No.137/2019 & 18 R.F.A.No.6 of 2019
apartments attached, the application I.A.No.193/2019 was liable to be dismissed. Therefore, the appeal R.F.A.No.6/2019 has to be allowed by this Court.
21. Considering the facts and circumstances of the case, we also deem it proper to issue a direction that the parties shall not further alienate any of the apartments or villas till the court below takes a fresh decision on the application for attachment before judgment.
22. In the light of the discussion above, the appeals are to be allowed by setting aside the impugned orders passed by the court below in I.A.No.4272/2018 and I.A.No.193/2019. The application I.A.No.4272/2018 has to be remanded to the court below for fresh consideration and disposal.
23. Consequently, the appeals are allowed. The impugned orders passed by the court below in I.A.No.4272/2018 and I.A.No.193/2019 are set aside. The application I.A.No.193/2019 is dismissed. The application I.A.No.4272/2018 is remanded to the court below for fresh consideration and disposal after hearing the parties. Before considering the application, the court below shall give an opportunity to the plaintiff to file additional affidavit and/or to take steps for amendment of the application for attachment. If any such additional
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affidavit is filed or application for amendment is allowed, defendants 3 to 11 shall be given an opportunity to file additional counter statement/counter affidavit. The parties shall appear before the court below on 02.09.2019. The court below shall dispose of the application I.A.No.4272/2018 within a period of one month from that date. As an interim arrangement, we direct that defendants 3 to 11 shall not further alienate any apartment till the disposal of the application I.A.No.4272/2018 by the court below. If any fresh order of attachment is passed by the court below in I.A.No.4272/2018, respondent No.12 is at liberty to file fresh application under Order XXXVIII Rule 8 of the Code. No costs in the appeals.
All the pending interlocutory applications shall stand dismissed.
(sd/-)
## **A.HARIPRASAD , JUDGE**
(sd/-)
## **R.NARAYANA PISHARADI, JUDGE**
jsr/16/08/2019
True Copy
PS to Judge