Holding

The Court held that the appellants have a prima facie title to the disputed plots, the builder is not a bona‑fide purchaser as he had actual and constructive notice, and therefore a temporary injunction was warranted.

Summary

The widowed wife and children of the deceased Murlidhar Hemdev claimed a right to specific plots in a Thane development, alleging that a registered rectification deed admitted their title and that a release deed dated 27‑03‑1979 was forged. The builder, having obtained sale agreements from various partners, argued he was a bona‑fide purchaser without notice of the heirs' rights. The Supreme Court examined the authenticity of handwritten additions in the rectification deed, the validity of the release deed, and the authority under the partnership deed to transfer immovable property. It found that the handwritten words were part of the original registered deed, giving the heirs a prima facie title, and that the builder had both actual and constructive notice, negating any claim of bona‑fide purchase. Consequently, the Court granted a temporary injunction to restrain construction on the disputed plots, set aside the lower courts' orders, and allowed the appeal.

Issues considered

Whether the appellants have a prima facie title to the immovable property and are entitled to a temporary injunction.
Whether the builder can be deemed a bona‑fide purchaser without notice of the appellants' rights.
Whether the handwritten additions in the rectification deed constitute an impermissible interpolation.
Whether the release deed dated 27‑03‑1979 is a valid conveyance.
Whether clause 10 of the sub‑partnership deed authorises transfer of immovable property.

Legislation cited

Code of Civil Procedure, 1908s. Order 39 Rule 1
Indian Partnership Act, 1932s. 19(1), s. 19(2)
Registration Act, 1908s. 17
Transfer of Property Act, 1882s. 3

Subjects

temporary injunctionbona fide purchaserregistered deedconstructive noticepartnership authorityproperty titlerelease deed

Judgment

BINA MURLIDHAR HEMDEV AND ORS. A
v.
KANHAIY ALAL LAKRAM HEMDEV AND ORS.

MAY 14, 1999

[K. VENKATASWAMI AND M. JAGANNADHA RAO, JJ.] B

Civil Procedure Code, 1908-0rder 39 Rule I-Temporary injunction-
Grant of-Respondent denying the right' of appellants/plaintiffs on an
immovable property on the basis offalse release deed-A registered document
and other evidence prima facies showing respondents recognizing the right C
of appellants-builder having actual as well as constructive notice of the right
of appellants-Plea of respondent/builder that he is bonafide purchaser
without notice-Held, that normally plaintiff who stands by when another is
making construction· on his property, could not seek injunction to stop
construction-But in view of the denial of right of the appellants and in view D
of the fact that respondents did not come forward with some equitable offer
to safeguard the interests of appellants justified grant of temporary
injunction-plea of builder of bonafide purchase not permitted in view of the
fact that the vendor of the builder could not have conveyed more interest
than he had-Once a notice is there, actual as well as constructive, plea of
bonafide purchaser without notice is not available. E

Suit:-Maintainability of Suit for dissolution of accounts alongwith
other relieft-Plea that plaintiff, if not entitled for dissolution or for accounts
is not entitled for any relief-Held, Plea not permissible.

Registration Act 1908-Section 17-Registered document- F
lnterpolation before registration-A/legation of-By executor-Held,
allegation not permissible.

Registered document-Admission of execution-Denial by executor of
his signature at one place while accepting his other signatures on the G
document-Held such denial not permissible.

Partnership Act, 1932 Section 19(1) (g) power of a partner to transfer
immovable property of the firm-without express power given to him-Held,
such power must be expressly given to the partner-Otherwise he cannot
transfer. H
677
678 SUPREME COURT REPORTS [1999) 3 S.C.R.

A J group and S group entered into partnership herein (main Firm). J
group hiving 34% shares entered into sub partnership with L group. "M"
(whose legal heirs are appellants) was one of the partners of L group vide
elause 10 of the sub partnership deed "R" of J group was entitled to deal
with the shares of L group and to manage the affairs of partnership.

B The main firm purchased land for developing and selling and both the
partners J and S group divided the property vide a registered deed in 1991
pursuant to a Memorandum of Understanding.

The partition deed between the J group and S group was amended
C vide a rectification deed (a registered document) by which both the partners
admitted and recognized the right of L group in the corpus of the property
allocated by J. At page 3 of the deed one typed line and three hand written
lines were added, below which initials were put. After the death of "M" "K"
one of the partners of L group recognized the right.of "M" in the property
vide letter dated 22.11.93 and J group also admitted the title of L group vide
D letter dated 3.1.1994.

Builder obtained 3 separate agreements of sale from S.J. and L groups.
The agreement with S group specifically referred to deed of rectification a
registered document, J group in their agreement referred to the rectification
deed, stating that there were some claims of L group. The agreement of L
E group ignored the fractional share of "M" stating that the heirs of "M" had
released their share vide Release Deed dated 27.3.79. The same was denied
by the appellants. The builder also rep_resented the appellants that he would
not make any construction on the plots belonging to J group.

Appellants coming to know that the builder was proposing to make
F construction on the property, filed suit for declaration of title of M's heir,
dissolution, accounts, partition, damages etc.

In the trial court, the release deed was accepted a prima facie concocted
document, since the deed of March 1979 referred to suit of November 1979.
G Suit was contested. L group supported the builder and J group and S group
stated that appellants/plaintiffs right was only to a share in profits of sub-
partnership firm and not to the property.

The appeal a~ainst the interim order was dismissed by High Court.

H In appeal to this court, the builders & J group/the respondents contended
B.M. HEMDEV v. K.L. HEMDEV 679
that if plaintiffs are not entitled to dissolution of accounts, they are not A
entitled to any relief; and disputing the handwritten words of the rectification
deed contended that they were surreptitiously introduced in the original
rectification deed; and that the addition by hand in the rectification deed, if
true, there should have been other similar additions at other places to bring
the other parts of the rectification deed in conformity with this part. J group
disputed their initials beneath the handwritten words. The builder contended B
that he was bona fide purchaser for consideration, without notice of the right
of M's heirs in L group.

The original copy of the rectification deed was called by this court, and
it was found that the words, in brackets were there. C

Allowing the appeal, this Court

HELD : 1. It is prima facie not permissible to contend that if the
plaintiffs are not entitled to dissolution of accounts, they are not entitled to
any other relief. If there were no documents of a period subsequent to the D
death of "M", evidencing the right of M's heirs in the immovable property
as such, it might perhaps have been possible for the builder or the J to say '-
that the suit for dissolution or for accounts was barred, consequently the
plaintiffs could not get any relief in regard to the property. But in their case,
there are prima facie several registered and other documents to 1976 which E
prima facie evidence plaintiffs right to the property itself rather than to
money on dissolution of the sub firm with J group. [689-C-E]

2.1. There is a primafacie case of title to immovable property made
out at by L group. In view of the original rectification deed, prima facie it
means that there is a clear admission that L group has a right in the F
property in plot 8 to 12 and that, that right had been accepted by Sand J
group at the time of the rectification deed. [693-B; 692-G]

2.2. The contention of the builder and J that the handwritten words
were surreptitiously introduced in the rectification deed is rejected. The G
evidence that the initials were not close to the typed lines but below the hand
written line (i.e. immediately below all the 4 lines), is clearly against the plea
of the respondent builder and J. It is clear prima facie that the handwritten
words were very much there before the initials were put at the bottom of
page 3 and the rectification deed was registered after the said handwritten
words became part of page. 3. [691-F-H) H
680 SUPREME COURT REPORTS [1999] 3 S.C.R.

A 2.3 An ~rgument that certain portion in the original of a registered
document is an interpolation is a contention which cannot be countenanced.
.... One can understand an argument that after a certified copy is obtained,
certain lines are added in the certified copy before producing the same in
court, but one can not understand a submission for the builder and J that
in the original of a registered document, there was an interpolation before
B it was registered. Such a contention cannot prima facie be raised nor accepted.
The circumstantial evidence contained in the manner in which the initials
were put below the handwritten words in the three pages dose not prima facie '
permit such a plea. [692-B-C]

c rectification
2.4. The argument that the addition by hand at page 3 bottom of the
deed, if true, there should have been other similar additions at
other places to bring the other parts of the rectification deed in conformity
with this part, could have had some force if the deed was not a registered
document and if the various features were not there. The argument has its
force because of other overriding considerations. [692-D-E)
D
2.5. A person who admitted execution of a document before the Sub-
Register cannot raise a question that the initials only at the bottom of page
3 of the original (as distinct from the initials at the bottom of page 1,2 which
are accepted) were not his. [692-F]

E 3.1. Normally a plaintiff who stands by when another is making
construction on his property could not seek injunction to stop construction.
But the manner in which K set up a release which is prima facie false, the
manner in which builder and J raised contentions regarding alleged
interpolation of a registered rectification deed shows that a after M's death
in 1976 the confidence which his widow and children had in K was prima
F
facie abused by setting up a false release deed. Then the builder and the J
together started denyingprimafacie the just right of widow and children of
Min the property. A temporary injunction to the plaintiffs notwithstanding
the investments made by the builder was granted by the court. [696-E-F)

G 3.2. The court could have avoided granting an injunction if the builders
and J group had come forward with some equitable offer to safeguard the
interests of the plaintiffs. The plaintiffs were practically deserted by other
in the L group and were vehemently opposed by their deceased father's
erstwhile partrrers, the J group. [697-C]

H 4.1. Primafacie it was not open to the builder to have got the benefit
B.M. HEMDEV v. K.L. HEMDEV 681

of the FSI, treating the entire property as on·e unit and ignoring the rights A
of the plaintiffs. [696-H]

4.2. The plea of bonajide purchase is not available in view of the fact
"
)
that the vendor of the building could not have conveyed more interest than
he had. If the release deed was bad, the vendor could not have conveyed the
_title of M's branch. Ifa buyer purchased from a vendor, property which partly B
belonged to another and not to the seller, the real owners who were 3rd
parties (M's heirs) could not be told by the buyer that he was under the
impression that somebody had purportedly sold their right to him.
[693-C-D]

4.3. Even if assumed that a plea of bonafide purchase without notice is C
permissible, in view of the fact that the agreement of S had put the builder
on notice of the rectification deed specifically, it is prima facie clear that the
builder had actual notice and was obliged to inquire into its details. Thus
there is actual notice. There is also constructive notice inasmuch as the
rectification deed is a registered deed and Section 3 of the Transfer of D
Property Act comes into play. Once a notice is there, actual as well as
constructive, a plea of bonafide purchaser without notice of right of L group
is not permissible. [693-E-G; 694-C)

5. Prima facie clause 10 of sub-partnership cannot help the builder.
Under Section 19(1) of the Partnership Act, the acts of a partner which are E
done to carry on in the usual way the business of the kind carried on by the
firm, binds the firm. Under Section 19(2) in the absence of any usage or
custom of trade to the contrary, the above implied authority (here express
authority under clause 10 of the same nature) does not prima facie empower
the partner to transfer immovable property belonging to the firm as stated F
in clause (g) of Section 19(1) of the Partnership Act. Such a power to
transfer property of the firm must be expressly given to the transferring
partner so far as immovable property is concerned; there is no such authority
shown. Clause 10 dose not contain any express power to "R" to transfer the
movable property of the firm. [694-H; 695-A-B]
G
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3141 of
1999.

From the Judgment and Order dated 12.9.97 of the Bombay High Court
in A.F.O. No. 1019of1997. H
682 SUPREME COURT REPORTS [1999) 3 S.C.R.

A K.K. Venugopal and Jitendra Mohan Sharma for the Appellants.

R.F. Nariman, S.D. Chitnis, E.C. Agrawala, Mahesh Agrawal, Deepak
Chitnis, Rishi Agrawala, M.B. Prasad, S.S. Khanduja, Ms. Ashima Gupta, Ms.
Indu Malhotra, Ms. Madhu Sweta, Mrs. V.D. Khanna, Ms. Triveni Polekar and
R. Sathish for the Respondents.
B
The Judgment of the Court was delivered by

M. JAGANNADHA RAO, J. Leave granted.

This appeal is filed by the four plaintiffs, the widow and children of late
C Murlidhar Lokram Hemdev who died intestate on or about 8.5.1976. The
appeal is directed against the order of the High Court of Bombay in Appeal
No. 1019 of 1997 dated 12.9.97 confirming the order of the learned Single
Judge dated 11.7.1997 in an application under Order 39 Rule I C.P.C. in Special
Suit No. 83of1997.

D The facts of the case are as follows :

There was an unregistered partnership w.e.f. 27.7.1964 (to which, of
course late Murlidhar was not party) under a deed dated 4.9.1964 between five
persons who were in two groups, the sankhala group having 668 share &nd
the Jains having 346 share. The said firm purchased land admeasuring 31,07 5.
E sq. feet in Thane, with the intention of developing and selling the same. This
firm is called the 'main firm' in these proceedings before us.

The Jain group entered into a sub-partnership, a registered firm dated
29. 7 .1964 with Lokram group consisting of 4 partners : (i) Kanhaiyalal Lokram
Hemdev, (ii) Murlidhar Lokram Hemdev (deceased) (father of plaintiffs-
F
appellants), (iii) Kanhaiyalal Sewaram and (iv) Srichand Dharamdass. In this
sub-partnership, the Jain group and the Lokram group share in the ratio of
I: I (i.e. 17%: 17% overall). In the Lokram group Murlidhar (the predecessor-
in-interest of plaintiffs) had a 38% share out of 17% (i.e. 6.46%), the 1st
defendant (RI) held 44% of 17%, the 2nd defendant held 12% out of 17% and
G balance by the 3rd defendant. It is stated in the deed of the sub-firm dated
29.7.64 in clause 10 that Rajendra K.Jain of the Jain group was entitled to deal
with the entirety of the 34% share of Jain-Lokram group. This firm is called
the 'sub-firm' in these proceedings.

The unregistered main firm applied in February 1975 to the Thane
H Municipal corporation for sanction of a lay-out plan. The corporation
B.M. HEMDEV v. K.L. HEMDEV [M. JAGANNADHA, J.] 683

sanctioned the same and divided the land into 12 plots bearing No. l to 12 A
and an· internal road subject to certain other conditions namely that open
space in plot No. 2 shall be kept permanently open to sky and shall be handed
over to Municipal Corporation and shall not admeasure less than 15% of the
F.P. No. 325 after demarcation.

Initially, the Sankhalas and Jains divided the property of the main firm. B
There was a MOU dated 4.2.76 between the partners of the main firm. It refers
to the sub-contract dated 29.7.64 by the Jain Group with their sub-partner
(para vi). It refers to a dissolution of the main firm between the Sankhala
group and the Jain Group w.e.f. 30. l.76 and states that out of the lay-out, Jain
group got plots 8,9,10,11and12 comprising 5774.78 sq. met. and the Sankhala C
got plots 1,3,4,5,6, and 7 comprising 11, 189.37sq. met., that plot 2 of the final
plot 325 (TPSI) admeasuring 3209 sq. met. was reserved for garden and for
providing access road to the above plots, and that the access road covers
1200 sq. met. The two groups would be entitled to the benefits derived from
the concerned authorities either by way of compensation/F.S.I./ in the ratio D
of34% (group Jain) and 66% (Group Sankhala) besides common use of access
road (Para (i) (viii). The MOU says in para 3 that the sankhala Group "is not
concerned with sub-partners of Jain group and that they carry out their own
obligation with their sub-partners individually." On 26.12.91, a registered
partition deed (called the main partition deed) in implementation of the MOU
dated 4.2.76 between Sankhala group and Jain group was executed and it E
stated that the plots as stated in the MOU became absolute properties of each
group subject to the common right in the road and vacant plot No. 2. The
benefits as stated in the MOU dated 4.2.76 were repeated. It was further
clarified that both the groups would be entitled to avail of benefits of the F.S.I.
which might be available to the entire plot of land and that the F.S.I. shall
only be confined to the reservation and internal road. The Jain group under F
took that they shall carry out their pending obligations if any, "with their sub-
partners". On 18.6.92, a registered deed ofrectification was executed between
the Sankhala's and Jain's which made certain amendments to the main partition
deed dated 28.12.91. (Typed copy of this deed was filed by appellant alongwith
affidavit of Murlidhar's daughter dated 27 .10.98. In para 12 at the bottom of G
page 3 of the main partition deed, in line 6, (after the words HUF) the
following words were to be added by virtue of the rectification deed :

"~nd also in the interest of sub-partners/co-members [i.e. Vishram &
others who are entitled in plots l to 7 as per Indenture 11.12.74 and
31.12.78, Similarly Jains executed in the interest ofKanhaya & Other H
684 SUPREME COURT REPORTS (1999] 3 S.C.R.

A who are entitled in plots 8 to 12 as per deed 29.7.64]."

The words which we have put iri brackets are found handwritten in the
rectification deed as appears from a registration copy of the rectification deed.
According to the respondents-defendants, these words written in hand were
not in the original rectification deed dated 18.6.92. On the other hand according
B to the plaintiffs-appellants and the Sankhalas, these handwritten words were
there in the original before the rectification deed was registered. We may state
that the certified copy of the rectification deed was produced an annexure to
the affidavit of appellant Mrs. Shivdasani daughter of Murlidhar dated
12.3.1999.
c
Ac-cording to the appellants, the above words added by hand in para
12 in the bottom of page 3 of the rectification deed shown that in the
rectification deed between Sankhalas and Jains dated 18.6.92, the Sankhalas
and Jains jointly admitted and recognised the right of Kanhaya & others (i.e.
D Lokram group) in the corpus of the property allocated to Jain group as
distinct from a mere right to profits on dissolution of the sub-firm. If this be
so, a question would arise whether the plaintiffs in the Lokram group being
heirs of Murlidhar who was one of the partners of the unregistered sub-firm
alongwith the Jains were entitled not merely to profits on dissolution of the
Jain Lokram sub-firm but to a right in immovable property and whether such
/E a right was accepted by both Sankhalas and Jains jointly under the rectification
deed.

We shall now refer to some developments between the Jain group and
its sub-partners, the ~okram group, Murlidhar died on 8.5.1976 leaving behind
F the plaintiffs as heirs. On 2.11.93, on behalf of Lokram group, a letter signed
by Kanhaiyalal Hemdev, Kanhaiyalal Sevekram and Shivchand Dharamdas,
was sent to the Jain group stating that the Jain group had entered into a sub-
partnership with them as well as deceased Murlidhar Lokram hemdev and that
they had come to know that Jain group was thinking of disposing of some
plots. 1:he Lokrams said that the Jain group could not do so and that the
G Lokram group "were agreeable to the suggestion given by" the Jain group
that the plots 8 to 12 allotted to Jain group in an extent of 5800 sq. met. be
sub.-divided and plots 8 and 9 admeasuring 2447.38 and 835.04 respectively
be allotted to the Lokram group. Again on 31.1. 94, Sri Rajendra B. Jain of Jain
Group wrote to "Kanhaiyalal Lokram hemdev & Others" foat the rights of the
H Lokram group under the partnership deed dated :9.7.64 "relating to the
B.M. HEMDEV v. K.L. HEMDEV [M. JAGANNADHA, J.] 685

property" situated at Thane, being final plot No. 325, TPSI, in equal ratio as A
mentioned in your (Lokram group's) letter dated 2.11.93 addressed to him and
. his brothers (Jain group). He also stated that he agreed that any transaction/
deal pertaining to the "said property" will only be completed "with your
consent" (i.e. Lokram Group), along with Shri Devshibhai Sankhala, as per the
terms specified in the letter dated 2.11.1993. He further declared and confmned
that the documents/written statements referred to Sri R.B. Jain's letter dated B
21.12.93 which were contrary to the understanding arrived at in February 1976,
would not be acted upon against the Lokram group till the transaction in the
land was finalised and he stated that the Jains were withdrawing their letter
dated 20.12.93. A footnote refers to Court litigations as the cause for there
being no dealll!gs from 1989 to 1994. These two letters are prima facie evidence C
that the Jain group accepted the right of the Lokram group in the partition
deed dated 26.12.1991 between the Sankhalas and Jains.

'We now come to the stage where the respondent 8 M/s. Shruti Builders,
a partnership of builder comes into the picture. In the s1:1bsequent discussion
his fmn is referred as the 'Builder'. D
As we shall see presently, the Builder obtained three separate
agreements, one from Sankhalas on 16.7.94, one from Jains on 14.8.94 and
one from Kanhaiyalal of Lokram group on 19.9.94, the last one stating that
Murlidhar's heirs had allegedly given up their share on 27.3.79. First the E
Sankhala group entered into an agreement dated 16.7.94 with the builder in
respect of Plots l, 3 to 7 and this refers to their title under the pattnership
deed dated 26.12.91 between the Jain and Sankhala "read with deed of
rectification". In this ·agreement with the Builder the references to the
rectification deed is important.
F
The second agreement is by the Jain group entered into on 19.8.94
with the builder. The Jain group entered into the transaction with the builder
in respect of the entire land i.e. 34% "as owners" which included the 17%
share of the Lokrams also (i.e. of Kanhayalal, Murlidhar and others). By this
date, the Jains were parties to the rectification deed dated 18.6.92 wherein G
prima facie the Jain and the Sankhala groups accepted the right of the
Lokram to a share in the corpus of plots 8 to 12. But the Jains instead of
informing the Builder about the rectification deed, cautioned the builder in
para 5(i) and para 6 that there was a claim by the Lokram group for 50%
share in 34% i.e. 17% which the builder had to take care of. That para 6 reads
as follows : H
686 SUPREME COURT REPORTS (1999] 3 S.C.R.

A "6. 1)te·;developers agreed that developers shall deal with and/or
settles the claim of the said group consisting Kanhaiyala Lokram.
and others at their own costs and expenses without making the owner
liable and/or responsible in any manner whatsoever nature for the
same. The developers further agree that the developers shall make
the payment to the owners irrespective of the fact whether the
B developers succeed to settle the matter with the said group of
Kanhaya/al Lokram and others or not ---------- the owners have
agreed to assign the development right on "as is where is ·basis in
relation to the 50% undivided share ... "

C The trouble for late Murlidhar's heirs (plaintiffs) started with the third
agreement dated 19.9.94 executed by, the lst respondent (kanhayalal Lokram
Hemdev) ignoring the fractional share of late Murlidhar Lokram Hemdev
(i.e. 38% out of 17% of Lokram group) and purporting to enter into an
agreement for the entire 17% share of Lokrams, stating that the heirs of
Murlidhar (plaintiffs) had released their share on 27.3.79. The sale
D consideration was Rs. 40 lakhs. He, Kanhaiyalal, stated that the fractional
share of late Murlidhar's heirs (i.e. 38% out of 17%) was released by late
Murlidhar's heirs on 27.3.79. The plaintiffs, the heirs of Murlidhar denied
the so called released deed dated 27.3.79.

It may be here noted that the so called release deed dated 27.3.79 by
E the plaintiff was accepted in the trial Court to be a prima facie concocted
document because it referred to a suit filed by certain third parties i.e. suit
No. 1824 of 1979. That was a suit filed in Nov. 1979. It was obvious that
the rele~_se deed of March' 1979 could not have referred to a suit of November,
1979. This position became clear in the trial court and in the High Court.
The trial court accepted this position prima facie in para 11 but said in the
F
!;ame para that this aspect could be finally decided only in the suit. The
learned senior counsel for the Builders (respondent 8) made it clear before
us that the Builder was not relying on the release deed in this Courts as he
had many other points vis-a-vis the plaintiffs.

G We shall proceed with the remaining narrative. According to the
plaintiffs, the Builder represented to plaintiff in May 1995 that he would not
make any construction on plots 8 to 12 which fell to the Jain group and that
he would build only in plots l, 3 to 7 which fell to Sankhala's group.

In 1995, the plaintiffs came to know that the Builder 8th defendant
H was proposing to make construction on the property. This led to
B.M. HEMDEV v. K.L. HEMDEV [M. JAGANNADHA, J.] 687

correspondence during 1995-96 and ultimately the special suit No. 88 of 1997 A
was filed on 24.1.1997 for various reliefs - declaration of title of Murlidhar's
heirs (plaintiffs) in the property as such, for dissolution of the regd. sub-firm
and accounts and for partition and damages, permanent injunction and other
reliefs. The reliefs are large in number and range from reliefs (a) to (x) in the
plaint.
B
The defence of the Builder (respondent 8) and the Jain group in their
written statements was that inasmuch as late Murlidhar died in 1976, the
sub-firm stood dissolved in 1976 and the suit filed in 1997 for dissolution
and accounts was barred by time. Though no reliance was placed on the so-
called release deed dated 27.3 .1979 allegedly executed by plaintiff, it was C
contended that, in any event, plaintiffs' right could only be for money that
might fall due to the plaintiffs share in the dissolution accounts of the regd.
sub-firm and even then the claim would be only against the Jains, the other
group in the sub-firm. Plaintiffs could never claim any share in the immovable
property as such. The plaintiffs could not rely on the rectification deed dated
18.6.92 (which modified the main partition deed dated 28.12.91) executed D
between the Sankhalas and Jain in the main firm because certain lines were
added in the said rectification deed by hand and those lines which purport
to give the Lokrams a right in property (plots 8 to 12 etc.) were not there
in the original rectification deed. Kanhaiyalal in the Lokram group supported
the builder. The Sankhalas (defendant 7) denied the plaintiffs claim in E
general fashion and said the plaintiffs right is only against the Jains.

Pending suit, the plaintiffs applied for temporary injunction under Order
39 Rule l CPC to restrain the defendants (including the Builder defendant
8) from making any construction in any manner. The plaintiffs claimed that
the Builder had got plans sanctioned showing entire suit land as one plot F
and the FSI was got worked out on that basis, ignoring the right of the
plaintiffs in the immovable property.

The builder and the Jain group and Kanhaiyalal in the Lokram group
resisted the injunction application on the basis of the pleas raised by them
in their written statements. It was also contended that the plaintiffs were G
guilty of delay, apart from the claim being time barred, because in the meantime
.... the builder had spent several lakhs of rupees on construction. It was, therefore,
inequitable to grant stay. The construction programme of the builder defendant
8 was publicised in the press on 6.5.94 etc. inviting claims. Bhoomi puja was
performed on 26.1.1995. Jain gro11p was under clause 10 of the sub-firm
partition deed dated 29.7.64 entitled to deal with the entirety of the 34% of H
688 SUPREME COURT REPORTS [1999] 3 S.C.R.

A Jains and Lokrams. Hence all acts of Jains, including the recital put in by fains
in the agreement dated 19.8.94 with the Builder that they were absolute
owners of the entire plots 8 to 12, was binding on the Lokrams. It was ·also ·
contended that when prior to November 1995, the 2nd plaintiff and her
advocate called on the 8th defendants' Advocate, the said 2nd plaintiff was
infonned about the above facts and also about the release deed dated 27.3.1979
B by plaintiffs in favour of Kanhayalal Lokram Hemdev (1st respondent).

The Sankhalas group filed a counter on the same lines as in.their written
statement as stated above. But they admitted that the plaintiffs had a share
in the property allocated to Jain group (plots 8 to 12) and that this was clear
C from the letter dated 2.11.1993 of Kanhayalal addressed to other sharers. (This
letter has already been referred to by us earlier).

The learned trial Judge dismissed the injunction application of the
plaintiffs appellants holding that the plaintiffs' right is only to a share in
profits of the sub-partnership finn and not to the property, that though the
n· release deed dated 27.3.1979 prima facie appeared to be forged, this question
could not be finally decided at this stage, that the builder, 8th defendant
verified all documents and purchased the property and had obtained necessary
sanctions and invested crores of rupees and that the jains under clause l 0
of the sub-partnership deed dated 29.7.64 were entitled to deal with the
entire finn property of 34% (i.e. plots 8 to 12) and the actions of Jain group
E including the act of his purporting to sell the 17% share of Lokram group
was binding on the plaintiffs. On these grounds, the application under Order
39 Rule l was dismissed.

The plaintiffs appeal to the High Court was dismissed by order dated
12.9.97 affinning the above reasons.
F
In this appeal we have heard exhaustive arguments of learned senior
counsel Sri K.K. Venugopal for the appellants. Learned senior counsel relied
upon Gangubai B. Chaudhary v. Sitaram B. Sukhtankar, [ 1983] 4 SCC 31,
strongly in support of plaintiffs' plea for temporary injunction.

G Learned senior counsel Sri R.F. Nariman appeared for the builder and
other counsel appeared for the Jain group. The counsel for the Sankhala
group as per the affidavits of the Sankhalas, supported the plaintiffs case as
against the Jain group.

The point for consideration is : whether the appellants have made out ·
H a prima facie case and the balance of convenience is in granting temporary
B.M. HEMDEV v. K.L. HEMDEV [M. JAGANNADHA, J.] 689

injunction and an order in the nature of the one passed in Gangubai B. A
Choudhary v. Sitaram B. Sukhtankar, [1983] 4 SCC 31?

Before we go into the point, we may state that our reasoning and
conclusions are intended for the limited purpose of this interlocutory application
under Section 39 Rule 1 C.P.C and that when the suit is taken up for trial, the
trial Court will decide the suit on the basis of such evidence as may be B
adduced in the suit unaffected by anything said in this judgement.

From the detailed facts set out above, it will be noticed that the suit is
not a suit for dissolution and accounts simpliciter but is also one for declaration
of title, permanent injunction, damages etc. In fact the large number ofreliefs C
in the plaint run from (a) to (x). It is, therefore, prima facie not permissible
for the 8th defendant and the Jain group or Kanhaiyalal in the Lokram group
to contend that if the plaintiffs are not entitled to dissolution of accounts,
they are not entitled to any other relief. If there were no documents of a period
subsequent to the death of Murlidhar in 1976, evidencing the right of D
Murlidhar's heirs in the immovable property as such, it might perhaps have
been possible for the Builder or the Jains to say that the suit for dissolution
or for accounts was barred, consequently the plaintiffs could not get any
relief in regard to the property. But, here as we shall presently show there are
prima facie several registered and other documents subsequent to 1976
which prima facie evidenced plaintiffs' right to the property itself rather than E
to money on dissolution of the sub-firm with Jain group. Unfortunately, the
trial Court and the High Court have completely ignored these documents.

To start with, the Lokrams had only a sub-partnership with the Jains
under the sub-partnership deed dated 29.7.64 while the Jains had the main F
partnership w.e.f. 27.7.64 with Sankhala group. But when the Sankhalas and
Jains divided the property itselfunder a registered deed dated 26.12.91 pursuant
to and MOU dated 4.2.76, the rights of Jain group in 34% share of the main
firm became crystallised into rights in immovable property. Murlidhar died on
8.5.76 subsequent to the MOU dated 4.2.76 between the Sankhalas and Jains.
The rights which accrued to jain group under the MOU prima facie accrue G ..
to the partnership of Jains and Lokrams. We have pointed out that para (vi)
of the MOU specifically refers to the sub-partner-ship of Jains and Lokrams
dated 29.7.64. Admittedly, in the sub-partnership deed dated 29.7.64, Murlidhar
had 38% share (i.e. 38% out of the 50% of 34% of Lokrams, the other 50%
of34% belonging to Jain group). Thus the rights under the MOU dated 4.2.76 H
690 SUPREME COURT REPORTS [1999] 3 S.C.R.

A were created before Murlidhar's death on 8.5. 76 and they crystallised into the
rights in immovable property as per the registered partition deed dated 26.12.91
between the Sankhalas and the Jains. This deed dated 26.12.91 also stated
that the jain group had undertaken to carry out their pending obligations with
their sub-partners, i.e. Lokram group. This statement will obviously apply to
B the entire Lokram group i.e. Kanhaiyalal & others including Murlidhar's heirs,
the plaintiffs.

We next come to the deed of rectification dated 18.6.92 which amended
the partition deed dated 26.12.91. It is the case of the plaintiffs that in the
hand written part of this deed in page 3, the Sankhalas and the Jains accepted
C the right of the Lokram group in the immovable property in plots 8 to 12.

We had earlier briefly referred to the handwritten words at page 3
bottom in the rectification deed dated 18.6.92 which is otherwise a type-
written document. The relevant rectification here referred at page 3 bottom is
D to an addition of 4 lines in the main partition deed one line in type and three
lines in hand. These disputed handwritten words are at the bottom of page
3 of the rectification deed. The respondents-builders do not deny typewritten
addition in one line at bottom of page 3 just above these three handwritten
lines but only deny the three lines written in hand below the type written line.
If the words in the 3 lines in the bracketed portion. in hand are to be there,
E it will mean prima facie a conjoint admission by Jains and Sankhalas that
Kanhaya & others (i.e. the entire Lokram group including Murlidhar's heirs)
have a right in immovable property in the plots 8 to 12, i.e. a right in
immovable property, and not merely a right to money on the dissolution of
sub-firm of Jains and Lokrams.
F
Now the learned senior counsel for the Builder, Shri R.F. Nariman
vehemently contended that the words in brackets were not there or were
surreptitiously introduced into the rectification deed. We therefore called for
a certified copy of the original rectification deed and we found that the words
in brackets in 4 lines were very much there in the certified copy also, one
G line in type and 3 lines in hand in the 3rd page at the bottom. After all, the
registered certified copy shows what is in the original rectification deed. The
Sankhalas in their counter affidavit dated 13 .3 .1999 (attested by notary on
30.3.1999) filed before us (sworn to by Sri Devshi Manju Sankhala who is a
signatory to this rectification deed) clearly supported the plaintiffs case in
H regard to these three handwritten lines and stated that :
B.M. HEMDEV v. K.L. HEMDEV [M. JAGANNADHA, J.] 691

"It was found that certain portion was erroneously left out under A
(c&d) and accordingly the same was written in hand and the said
additions under said (c&d), were duly initiated by myself as well as
respondent 5 and the same is physically visible to the naked eyes.
There is no question of tampering with this confirmation/rectification."

Referring to Ex. I annexed by respondent 5, Rajendra Kumar Jain to his
B
affidavit dated 13 .3 .1999 (vol. 3 of the paper book pages 12 to 15) Mr. Devshi
Manju Sankhala said in his affidavit that the said photo copy of the rectification
deed produced by Sri Jain was not the one whose original was registered. It

-
is true that copy of the rectification deed produced by fains as Annexure
does not contain the handwritten words but the question is whether after C
such a draft was prepared, the parties to the deed added 3 more lines in hand
at the bottom of page 3.

Now we may point out that the photo copy of the original as certified
and produced before us contains on first page the words "18th day of JUNE" D
whereas the photocopy produced by 5th respondent as Annexure shows
"18th day of JUNE". There are no capital letters like JUNE, Further the
photocopy of the initials put at pages l, 2 in the certified photocopy produced
by the appellants shows that 'initials' are put immediately below the typed
words at pages l .and 2. The initials at the bottom of pages I and 2 are not
in dispute. Disputes is only raised by respondents to the initials at the bottom E
of page 3 where these 4 lines occur at the bottom of the page. At page 3,
where the handwritten words occur at the bottom, it may be noticed that the
initials are clearly found immediately below the handwritten words. If the
single typed line of the addition in para ( d) alone were there, before any
initials were put, the initials would have been close to the single typed line p
proposed to be added to the main partition deed and it would not have been
possible to add three more lines by hand below the typewritten line. The
document shows that the initials were not close to the typed line as in pages
l, 2 but below the 3rd handwritten line (i.e. immediately below all the 4 lines).
This evidence is clearly against the plea of the respondent builder and the
jains. It is clear prima facie that the handwritten words were very much there G
before the initials were put at the bottom of page 3 and the rectification deed
was registered after the said handwritten words became part of page 3.
Therefore, the contention of the builder and the fains that these handwritten
words were surreptitiously introduced has to be rejected. The draft produced
as Annexure by the fains is therefore not the last word. As pointed out by H
692 SUPREME COURT REPORTS [1999] 3 S.C.R.

A the Sankhalas in their affidavit, before registration it was noticed that 3 lines
were omitted and they were introduced by hand and thereafter the initials
were put below the last of the handwritten lines.

In any event, as rightly pointed out by Sri K.K. Venugopal, an argument
that certain portion in the original of a registered document is an interpolation
B is a contention which cannot be countenanced, one can understand an
argument that after a certified copy is obtained, certain lines are added in
the certified copy before producing the 'saine in Court but one cannot
understand a submission for the builder and Jains, that in the original of a

C
registered document there was an interpolation before it was registered.
Such a contention cannot prima facie be. raised nor be accepted. The
circumstantial evidence contained in the manner in which the initials were
put below the handwritten words in the three pages does not prima facie
-
permit of such a plea.

Another argument was advanced by Sri R.F. Nariman that this addition
D by hand at page 3 bottom of the rectification deed, if true, there should have
been other similar additions at other places to bring the other parts of the
rectification deed into confirmity with this part. This argument could have had
some force if the deed was not a registered document and if the .various
features to which we have already made a reference were not there. This
E argument loses its force because of the other overriding considerations referred
to above.

A further cor.tention was raised by the Jains disputing the initials of
jains beneath the handwritten words. We fail to see prima facie how a person
who admitted execution of a document before the sub...registrar can raise a
question that the initials only at the bottom of on page 3 of the original (as
F distinct from the initials at the bottom of pages 1, 2 which are accepted) were
not his. We are not prima facie impressed by the handwriting experts view
of the initials at page 3 bottom in view of the above circumstances.

If, therefore, the copy of the rectification deed as produced before us
G is true to the original which we think it is-then prima facie, it means that there
is a clear admission that Lokram group has a right in the property in plots
8 to 12 and that that right had been accepted by Sankhala group and Jain
group at the time of the rectification deed.

In addition, prima facie, we have two more letters dated 2.11.93 by
H Lokram group (including Kanhayalal) and in particular, the letter dated 3.l.94
B.M. HEMDEV v. K.L. HEMDEV [M. JAGANNADHA, J.] 693
by none other than Rajendra B. Jain of Jain group admitting the title of Lokram A
group in the property and withdrawing all previous denials.

We, therefore, hold that there is a prima facie case of title to immovable
property made out by Lokram group. We also hold that prima facie the release
deed dated 27.3. 79 is a forged document. As stated earlier, a deed of March
1979 it could not have referred to a suit of November, 1979. That would mean B
that the heirs of Murlidhar, the plaintiff continue, prim a facie, to have a share
in the plots 8 to 12 and other common property.

We now come to the question whether the 8th defendant can be said
to be a bonafide purchaser for consideration without notice of the right of C
Murlidhar's heirs in Lokram group. Basically, we are of the view that the
vendor of the Building could not have conveyed more interest than he had.
If the release deed was bad, the vendor could not have conveyed the title
ofMurlidhar's branch. In that view of the matter, a plea of bona fide purchase
is, in fact, not available. If a buyer purchased from a vendor property which
in part belonged to another and not to the seller, the real owners who were D
3rd parties (Murlidhar's heirs) to the deed could not be told by the buyer that
he was under the impression that somebody held purportedly sold their right
to him. Even so, we shall assume that a plea of bona fide purchaser without
notice is permissible and examine whether the Builder had no notice of
Murlidhar's rights in Lokram group. E
Now the rectification deed is a registered document. The agreement by
Sankhalas with the builder dated l6. 7.94 and it specifically refers to the deed
ofre~tification (dated 18.6.92). The Jains agreement of sale dated 19.8.94 with
the builder no doubt omits to refer to the rectification deed and says that
there are only some 'claims' of the Lokrams. But the Sankhalas were obviously F
more truthful. Now if the agreement of Sankhalas had put the builder on
notice of the rectification deed specifically, as stated earlier, it is primafacie
clear that the builder had actual notice and was obliged to inquire into its
details. Thus there is actual notice. There is also constructive notice inasmuch
as the rectification deed is a registered deed and Section 3 of the Transfer G
of Property Act comes into play.

Under Section 3 of the Transfer of Property Act, "a person is deemed
to have notice" of a fact when he actually know that fact or when, but for
wilful abstention from an inquiry or search which he ought to have made, or
gross negligence, he would have known it. The Explanation I thereto says : H
694 SUPREME COURT REPORTS [1999] 3 S.C.R.

A "where any transaction relating to immovable property is required by
law to be and has been effected by a registered instrument, any
person acquiring such property or any part of it, or shares or interest
- in such property shall be deemed to have notice of such instrument
as from the date of registration .. .'.'

·B Inasmuch as the rectification deed is a ~egistered deed; it is deemed to
be noticed to the Builder in view 'of Section 3 of the Transfer of Property Act.

Once notice is there, actual as well as constructive, a plea of bona fide
purchaser withqut notice of rights of Lokram group is not pennissible. For the
C present we are not going into the question wheth,er the fiction of a so-called
release deed by Murlidhar's heirs is a creation of Kanhayalal Lokram alone
or whether the Builder had also a role in the creation of the release deed.

But then, it is not as if the Builder merely believed that Lokram group
had a cla~m. He goes to the Lokrain group and obtains-not a release of the
D "claims" of the Lokram group including Kanhayalal-but obtains a clear .
agreement for transfer of existing rights of the Lokram group in plots 8 to 12
etc. In other words, the Builder accepted that the Lokrams had right m
property and not merely claims.

E In the result, the agreement dated 19.9.94 by Kanhayalal cannot be
treated as an agreement to transfer the title of the heirs of Murlidhar. If the
release deed goes, their title remains untransferred.

Then there is the argument that as per clause l 0 of sub-partnership
deed dated 29. 7.1964 between the Jains and the Sankhalas, Sri Rajendra
F Kumar Jain was entitled to deal with the 17% share of Lokrams or their
equivalent in terms of right in plots 8 to 12 of'the Lokrams. The said clause
IO reads as follows :

"Clause I 0 : The said Rajendra Kumar Jain shall manage the affairs
of the partnership and whatever he does shall be binding on the
G
partners."

Under Section 19(1) of the Partnership Act, the acts of a partner which
are done to carry on, in the usual way, business of the kind carried on by
the firm, binds the firm. Under Section 19(2), in the absence of any usage or
H custom of trade to the contrary, the above implied authority-(here express
B.M. HEMDEV v. K.L. HEMDEV [M. JAGANNADHA, J.) 695
• authority under clause l 0 of the same nature )-does not prima facie empower A
the partner to 'transfer immovable property belonging to the finn' as stated
in clause (g) of Section 19( l) of the Partnership Act. Such a power to transfer
property of the firm must be expressly jiven to the transferring partner so far
as immovable property is concerned there is no such authority shown. Clause
10 does not contain any expr~ss po~r to Sri R.K. Jain to transfer the
immovable property of the finn. Hence the said clause is of no use, prima B
facie.

In any event, we have the letter of Sri Rajendra B. Jain dated 31.1.94
which clearly says that the Jain group will not deal with the property right
of the Lokram without their consent and without knowledge of the Sankhalas. C
The said letter dated 31.1.94 reads as follows :
"From : Rajendra B. Jain.
To
Kanhayalal Lokram Hemdev & Others :
D
I have written a letter dated 20.12.1993 in rr;sponse to your letter dated
2nd November, 93, due to misunderstanding I have written above
mentioned letter dated 20.12.93, which I am voluntarily with- drawing
the said letter, as your rights under the partnership deed dated 29th
July, 1964 relating to the property-situated at Thane, being final plot
No. 325, T.P.S.I, Panchapakhadi, Thane, in equal ratio as mentioned in E
your letter dated 2nd November, 93, addressed to me and my brothers
(Jain group).

I agree any transaction/Deal pertaining to the said property will
only be completed with your consent and knowledge along with Shri
Devshibhai Sankhala, as per the terms specified in your letter dated F
2nd November, 1993.

I further declare and confirm that the documents/written statements
referred in my said letter dated 20th December, I 993, which is contrary
to our understanding arrived at in February, 1976, will never be acted
upon against your group till the transaction of mentioned Land is G
finalised.
Thanking you,
Yours sincerely,
Sd/-
(Rajendra B. Jain) H
696 SUPREME COURT REPORTS [1999] 3 S.C.R.

A CC : Devshibhai

On account of the status quo order dated 6/1/94 with effect drom
1989, no action or any dealings will take place in respect of the said
land till the disposal of the pending litigation of which please note."

B We reiterate, the view that prima facie clause 10 of the sub-partnership
cannot help the builder.

It was argued that the plaintiffs had come to court after considerable
delay in 1997 in-spit~ of notice in the press dated 6.5.94 about the proposals
to build on the land and in spite of Bhoomi puja dated 26.1.95. It is,
C however, pointed out by the lea,rned senio! counsel for the appellants Shri
K.K Venugopal that the Bhoomi Puja was done in plots l, 3 to 7 ofSankhalas
and not in plots 8 to 12 of fains & Lokrams. Further as late as 31.1.94, the
fains J;iad assured by letter to the Lokrams that they would not do anything
to affect the interests of the Lokrams in the property i.e. plots 8 to 12 etc.
D The letter above said itself explains in the footnote that from 1989 to 1994,
on account of other litigation, there was no progress. The plaintiffs have, in
the plaint, referred to the correspondence during 1995-96 between the parties
to explain the delay.

It is true that normally a plaintiff who stands by when another is making
E construction on his property could not seek injunction to stop construction.
But, the manner in which Kanhayalal Lokram set up a release deed which is
prima facie false the manner in which the Builder & fains raised contentions
regarding alleged interpolation of a registered rectification deed which plea we
have held to be primafacie untenable we are pf the view that after Murlidhar's
death in 1976, the confidence which his widow and children had in Kanhayalal
F was prima facie a~used by setting up a false release deed. Then the Builder
and the fains together started denying the prima facie just rights of Murlidhar's
widow and children in the property. We are therefore, not inclined to deny
a temporary injunction to the plaintiffs notwithstanding the investments made
by the Builder. The Builder had never shown any anxiety before us to come
G to terms and avoid an injunction by offering certain terms to plaintiffs.

Thus it is clear that prima facie it was not open to the Builder to have
got the benefit of the FSI, treating the entire property as one unit and ignoring
the rights of the plaintiffs. We may add here that already there are disputes
between the Sankhalas and the Builder which have also gone to Court, the
H Sankhalas cancelling their agreement and the Builder suing for specific
B.M. HEMDEV v. K.L. HEMDEV [M. JAGANNADHA, J.] 697

performance. A
It is in this background that we have to consider the applicability of
Gangubai B. Chaudhary v. Sitaram B. Sukhtankar, [ 1983] 4 SCC 31. In that
--.
~

case it was noticed that if the respondents were allowed to set up construction
by the use of the FSI for the whole land including the land involved in
dispute, the situation would become irreversible by the time the dispute is B
decided and would preclude fair and just decision of the matter. If on the
contrary injunction is granted as prayed for the respondents are not likely
to be inconvenienced because they were in possession of sufficient land on

- which they could put up construction.

It would have been easy for this court to avoid granting an injunction C
if the Builder and the Jains group had come forward with some equitable
offer to safeguard the interests of the plaintiffs. The plaintiffs were practically
deserted by others in the Lokram group, and were vehemently opposed by
their ~eceased father's erstwhile partners the Jains. The Builder did nothing
to bother about .their rights. Though the Jains were partners with Lokrams,
it is rather curious that it was the Sankhalas who inspite of not having a direct
n·
link with plaintiffs that have came to the rescue, of plaintiffs as is seen from
the counter affidavits of Sankhalas filed in this court. As no effort was made
by the Builder and the Jains to come forward with any useful suggestions in
regard to safeguarding the rights of the plaintiffs but the plaintiffs were
opposed tooth and nail-we have no choice but to grant a temporary injunction E
against the 8th defendant and anybody who is claiming any rights through
the 8th defendant from making any construction or entering into any
agreements or sale deeds or other arrangement in relation to plots 8 to 12 and
the road and open plot No. 2, by the use of the FSI of the whole land covered
by plots l, 3 to 7 and 8 to 12. An order of temporary injunction will issue
accordingly, It will be operative pending the suit. It will however be open to
F
the Builder, 8th defendant or others to come forward for modification of this
order subject to offering adequate safeguard in respect of the interests of the
plaintiffs in the property. If any such application is filed, it will be entered after
the summer vacation.
G
We had to go into various aspects of title to the property in these
proceedings arising under Order 39 Rule 1 CPC. We had to do so because the
Builder & the Jains insisted upon asserting various contentions in relation to
property rights. But we may add again that this order is confined to these
proceedings only and will not come in the way of the suit being decided on
its own merits unaffected by any observations or prima facie findings in this H
698 SUPREME COURT REPORTS [1999) 3 S.C.R.

A order.
The appeal is allowed and the orders of the trial court and High Court
are se~ .c:iside. The appeal is disposed of in terms of the directions given
above and subject to its being modified (as stated above) if proper safeguards
are offered to protect the rights of the plaintiffs. There will be no order as to
costs.

K.K.T. Appeal allowed.

-