44 AO 998-2023(f).doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

APPEAL FROM ORDER NO. 998 OF 2023

1.Harshad Gawde

Age 33 years, Indian Inhabitant

Occupation Business,

R/o Everest Colony, Beturkar Pada

Taluka Kalyan Dist Thane 421301

2.Gorakh Dnyandeo Sable

Age 53 years, Indian Inhabitant

Occupation Business,

R/o Tukaram Niwas Kala Talav

Beturkar Pada, Taluka Kalyan

Dist Thane 421301

... Appellants.

(Orig.Defendants)

Versus

M/s. Swati Builders

A parntership firm, duly registered under

Indian Partnership Act, through its Partner

Shri Manish Prakash Mutha,

Age – 37 years, Indian Inhabitant

Occupation Business

Having its registered office at

101-103, 1

st

Floor, Vikas Heights,

Santoshi Mata Road, Kalyan West

Dist Thane 421301

... Respondent.

(Orig. Plaintiff)

—————

Mr. Vishal Kanade a/w. Amrut Joshi, Rakesh V. Misar, Bhushan Raut,

Vaishnavi Tiwari and Rahul Jadhav i/by RVM Legal for Appellant.

Mr. Mayur Khandeparkar a/w. Aniesh Jadhav, Ativ Patel and Harshad

Vyas i/by AVP Partners for Respondent.

—————

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44 AO 998-2023(f).doc

Coram:Sharmila U. Deshmukh, J.

Reserved on: July 14, 2026

Pronounced on : July 27, 2026

JUDGMENT :

1.Heard. Admit. With consent, taken up for final hearing

forthwith.

2.The present appeal is at the instance of the original

Defendant Nos.1 and 2 being aggrieved by the impugned order

dated 3

rd

May, 2023 passed by the Trial Court injuncting the

Defendant Nos.1 and 2 from entering and creating any third-party

rights in respect of the suit property.

3.Special Civil Suit No.403 of 2022 was filed seeking inter alia a

declaration that the Defendant Nos.1 and 2 are not the partners of

the Plaintiff firm and have no authority in law or any right, title and

interest to deal with the suit properties and that the registered sale

deed dated 5

th

May, 2022 executed by the Defendant Nos.1 and 2

by acting as partners of the Plaintiff firm is illegal and null and void

and not binding on the Plaintiff and be cancelled.

4.The suit property is described in plaint paragraph 2 as CTS

Nos. 631, 632, 2765 and 2766 admeasuring 5910.55 square meters

and is referred to as suit property no 1, 2, 3 and 4 individually. The

Plaintiff came with the case that the suit property no.1 was

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acquired from one Anandji Daya Rathod and 19 other co-owners by

registered development agreement dated 15

th

July, 2002 and the

entire consideration was paid by the Plaintiff and registered Power

of Attorney (PoA) dated 15

th

July, 2002 was executed in favour of

the Plaintiff with full ownership rights in respect of the suit

property. The plaint further sets out similar agreements which

were executed on 23

rd

July, 2003, 10

th

September, 2003 and 15

th

July, 2002 in respect of the suit property Nos.2, 3 and 4. It is

pleaded that Defendant No.2 was earlier the partner of the

Plaintiff firm but had retired on 17

th

October, 2011 and has

executed the registered sale deed dated 5

th

May, 2022 acting as

partner of the Plaintiff without any authority and on the basis of

the PoA executed by the landowners in favour of the Plaintiff.

5. The written statement contend that in or about 2002-2003,

the development rights of the four suit properties was purchased

by late Balu Gawde and Defendant No.2 from the original owners

and for the sake of convenience, the documents were executed in

the name of Plaintiff. At that point of time there were two partners

of the firm and as the consideration was paid by Balu Gawde and

Defendant No.2, hence the documents came to be executed in

favour of Balu Gawde and the defendant No.2 as partners of

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Plaintiff along with the irrevocable PoA. In an attempt to generate

funds in the partnership account, in the year 2011, Manish Mutha

and Pravin Chhajed were taken as partners and it was agreed that

they will infuse funds in the partnership, so that late Balu Gawde

and defendant No.2 can be refunded the amounts paid by them for

acquiring the development rights in the property. As the funds

were not brought in by Manish Mutha and Pravin Chhajed, the

development rights in the property continued to be owned by late

Balu Gawde and defendant No.2. As Manish Mutha and Pravin

Chhajed had never paid any amount towards the capital

contribution of Swati Builders, they were never effectively inducted

as partners of the said firm. In 2009, Balu Gawde applied for non-

agricultural use of the property and the entire expenses of the suit

property was incurred by Balu Gawde and Defendant No.2.

6.In February, 2021, Balu Gawde expired and in July, 2021, a

partnership deed was executed between the defendants

re-constituting a partnership firm called “Swati Builders” for

development of the suit properties, which was the subject matter

of the development agreement and the sale deed of 5

th

May, 2022

was executed by defendant no.2 in favour of the partnership firm

of the two Defendants. The Defendants are in actual and physical

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possession of all the suit properties and there is no relief sought of

recovery of possession of the suit properties from the Defendants.

7.The application under Order 39 Rule 1 and 2 of Code of Civil

Procedure, 1908 (for short, “CPC”) sought injunctive reliefs against

the defendants from misusing the sale deed of 5

th

May, 2022 and

from entering into the suit properties and disturbing the lawful

possession of the Plaintiff over the suit properties and not to

create any third party interest in respect of the suit properties.

8.The Trial Court noted that Defendant Nos.1 and 2 have

reconstituted the firm with themselves and Late Balu Gawde as

partners. It noted that Defendant no 2 has already retired from the

firm on 17

th

October, 2011 and opined that upon death of Balu

Gawde, Defendant No 1 could have raised appropriate demand for

being inducted as partner of the Plaintiff firm. It held that there is

no document to establish that Defendant Nos.1 and 2 are partners

of the Plaintiff. It held that the sale transaction had taken place

when Balu Gawde and Defendant No.2 were partners of the

Plaintiff firm.

9.The Trial Court perused the conveyance of 5

th

May, 2022 and

observed that the earlier conveyance has been annexed to the

indenture of the year 2022 by using the PoA of 2002. The Trial

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Court held that it is not open for Defendants to raise a challenge to

the admission of Manish Mutha and Pravin Chajjed in the

partnership firm.

10.The Trial Court opined that the suit properties were

purchased by the Plaintiff firm in the year 2003 and consideration

was paid by the firm. It declined to accept the photographs

produced by the Defendants as proof of possession.

11.Mr. Kanade, learned counsel appearing for the Defendants

have stated the history of the constitution of the partnership firm

of Swati Builders, the retirement of other two partners leaving only

Balu Gawde and Gorakh Sable as the partners of the partnership

firm in the year 1991. He would further submit that the registered

development-cum-sale agreement as well as the PoA in respect of

the four suit properties were executed by the father of the

defendant No.1, who is now deceased and the defendant No.2 as

partner of Swati Builders. He submits that on 17

th

October, 2011,

the defendant No.2 retired as partner and Balu Gawde, Manish

Mutha and Pravin Chhajed continued the firm as Swati Builders. He

submits that as Manish Mutha and Pravin Chhajed did not

contribute any funds, the deed of reconstitution was effectively

never acted upon between the parties.

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12.He would submit that on 23

rd

July, 2021, there was

reconstitution of partnership deed between the defendant No.1

and Defendant Nos.2 and on 5

th

May, 2022, the sale deed was

executed by the original owners of the suit properties in favour of

the defendants as partners of Swati Builders. He submits that the

suit is bad for non joinder of original owners, who are necessary

parties. He would further submit that under the PoA executed in

the year 2002-2003, the original owners granted authority to

defendant No.2 and late Balu Gawde to deal with the suit

properties on behalf of the original owners. He has taken this Court

in detail through the findings of the Trial Court and would submit

that the Plaintiff has failed to make out a prima facie case as the

development agreements were executed by Balu Gawde and

Defendant No.2 and the payments in respect of the suit property

was made by them. He would further submit that the incoming

partners were inducted only upon payment of Rs.50,000/- and are

now seeking to stake a claim to the valuable suit properties.

13.On the aspect of possession, he would point out that the Trial

Court has rejected the photographs by considering only the first

photograph as the same reflected the notice put up on the suit

property in the background without noticing the other

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photographs taken from inside of the suit properties. He submits

that the possession of the suit property was given to the defendant

Nos.1 and 2 as partners of Swati Builders and the possession is still

with them. He submits that the Plaintiff has to make out a case of

being in possession of the property and there is no document

produced by them to demonstrate the same. He would submit that

at the highest, the injunction against creating third party rights

could have been granted. He would further submit that the Trial

Court overlooked the legal position that the partnership firm does

not enjoy any independent legal existence and the possession was

with the defendant no.2 and the father of the defendant no.1 all

along. He submits that there is no title deed/document to prima

facie show that Manish Mutha derived title with respect to the suit

properties and being admitted to the firm of Swati Builders in the

year 2011, he had no personal knowledge of the

transactions/payments made to the original owners. He submits

that there is a cloud on the title of original plaintiff to the suit

property and without declaration of title, the present suit is not

maintainable. He would submit that in order to protect possession,

the plaintiff is first required to prove not only title to the property

but also that it is in physical possession. He submits that

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admittedly, late Balu Gawde was a partner and was a co-owner of

the suit properties and as legal heir, the Defendant No.1 would

have a right as co-owner and could not be restrained from entering

into the suit properties.

14.Per contra, Mr. Khandeparkar, learned counsel appearing for

the Respondent-original plaintiff would submit that on 1

st

September, 1991 upon the retirement of the other partners of the

firm, it was only Balu Gawde and Gorakh Sable, who continued the

business as partners of the firm and therefore, the PoA and

development agreements were executed by them, though, in their

capacity as partners of the firm. He submits that after defendant

no.2 retired on 17

th

October, 2011, Manish Mutha and Pravin

Chhajed joined as partners along with Balu Gawde and continued

the business. He submits that on 18

th

February, 2021, Balu Gawde

expired and Manish Mutha and Pravin Chhajed along with Shyam

Ahuja Pvt. Ltd. continued the business as partners of the firm and

defendant No.1 Harshad Gawde was never concerned with the

plaintiff firm in any capacity and was never inducted as partner.

15.He submits that after the death of Balu Gawde, on 21

st

July,

2021, the defendants reconstituted a new partnership firm along

with Balu Gawde, who had expired with the same name i.e. Swati

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Builders for the purported development of the suit property,

despite the defendant no.2 having retired in the year 2011 and

defendant No.1 never being a partner of the Plaintiff firm. He

submits that by the impugned deed of conveyance of 5

th

May, 2022,

the Defendants as partners of the new firm purported to acquire

rights in the suit property using the PoA that was executed in the

year 2002-2003 in favour of the Plaintiff firm-Swati Builders and the

undertaking annexed to the conveyance clearly refers to the PoA

executed in the year 2002-2003 in favour of the Plaintiff firm, as the

only purported authority for executing the impugned conveyance.

He submits that the Trial Court has rightly held that the Defendants

have not furnished any proof of being partners of the Plaintiff firm

at the time of execution of the sale deed of 5

th

May, 2022.

16.He submits that the under the registered documents

executed in the year 2002-2003, the possession was handed over as

partners of the firm and not in their individual capacity and the

possession remained with the partnership firm. He submits that as

the property is a vacant land, possession follows title. He submits

that as the defendants have failed to prove their right in the suit

properties as well as possession, the Trial Court has rightly

restrained the defendants from entering into the suit properties

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and from creating any third party rights. He submits that the

contention that the suit is bad for non-joinder of the original

owners was not a submission canvassed before the Trial Court. He

submits that in any event, the challenge was to the registered sale

deed of 5

th

May, 2022 which was executed on the basis of PoA and

therefore, there is no requirement of impleading the original

owners.

17.Rival contentions now fall for determination:

18.The suit is filed is by the partnership firm of Swati Builders

through its partner Manish Mutha against Harshad Balu Gawde,

who is the son of the deceased Balu Gawde and Gorakh Dyandeo

Sable, who was a partner of the partnership firm and had retired on

17

th

October, 2011. It is not in dispute that the development rights

in respect of the suit properties were acquired in the year 2002 in

the name of the partnership firm i.e. Swati Builders. Though it is

sought to be contended that the suit properties were acquired in

the name of the partnership firm for the sake of convenience, the

registered development agreements as well as the PoA have been

executed in favour of the partnership firm. The registered

indentures executed on 15

th

July, 2002, 23

rd

July, 2003 and 10

th

September, 2003 were executed when the plaintiff firm comprised

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of only two partners i.e. Balu Gawde and Gorakh Sable and hence,

the PoA were executed in favour of Balu Gawde and Gorakh Sable

in their capacity as partners. Having admitted that on 17

th

October,

2011, Gorakh Sable had retired, there is no right demonstrated by

Gorakh Sable in respect of the partnership’s assets. Further

defendant no.1 is the son of Bala Gawde, who was a partner of the

firm and had expired on 18

th

February, 2021. The defendant no.1

was never inducted as a partner of the Plaintiff firm.

19.Right from the year 2002-2003, the registered development

agreements and the PoA stand in the name of the Plaintiff firm and

upon the reconstitution of a partnership firm, Manish Mutha and

Pravin Chhajed has been inducted on 17

th

October, 2011 and after

the death of Balu Gawde on 18

th

February, 2011, Manish Mutha,

Pravin Chhajed and Shaym Ahuja Pvt. Ltd. continued the business of

the partnership firm.

20.Defendant No.1 and 2, who are not concerned with the

partnership firm as the defendant No.1 was never inducted as

partner of the firm and defendant No.2 has retired from

partnership firm in the year 2011, have executed a registered sale

deed on 5

th

February, 2022 as partners of Swati Builders. Perusal of

the conveyance deed indicates that reference is made to the

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development agreements executed in the year 2002-2003 and the

consideration paid in the year 2002 to the original owners. The

conveyance deed confirms that the original owners have executed

the documents on 17

th

July, 2002, 23

rd

July, 2003, 10

th

September,

2003 and 17

th

July, 2002, and that the possession of the entire

properties have been handed over by the original owners under the

indenture of 2002-2003 and continued to be in possession of the

defendants. The conveyance deed has been signed by Harshad

Gawde as partner of the partnership firm and by Gorakh Sable as

party of one part and by Gorakh Sable as the PoA holder of the

original owners nos.1 to 20. To the conveyance deed is annexed the

development agreements of the year 2003. It is therefore clear

from the conveyance deed executed on 5

th

May, 2022, that the

same is in fact reconfirmation of the sale transactions of the year

2002-2003 and have been executed by the defendants as partners

of Swati Builders and by the Defendant No.2 as the POA holder of

the original owners which PoA was executed in favour of the

Defendant No.2 in the year 2002. The irrevocable PoA executed in

favour of Bala Gawde and Defendant No.2 was in their capacity as

the partners of Plaintiff firm-Swati Builders and could not be

utilized by defendant No.2 after having retired from the

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partnership firm in the year 2011.

21.The defendants constituted a new partnership firm on 23

rd

July, 2021 of the same name i.e. Swati Builders and have attempted

to create a title in favour of the defendants by executing sale deed

of 5

th

May, 2022. The reconstituted partnership deed on 23

rd

July,

2021 has been entered into between the defendant Nos.1 and 2 as

well as the Balu Gawde, whereas Balu Gawde had already expired

on 18

th

February, 2021. During the submissions, there is no

explanation tendered as to how the firm could have been

reconstituted on 23

rd

July, 2021 with deceased person as a partner

of the firm. It is evident that a prima facie attempt has been made

to utilize the name of Balu Gawde, who was a partner of the firm

till he expired on 18

th

February, 2021.

22.The Trial Court has rightly noted that the indentures which

was executed in the year 2002-2003 were in the name of Plaintiff

firm Swati Builders, with which the defendant No.1 had no concern

as he was never inducted as partner of the firm and insofar as the

defendant no.2 is concerned, he had already retired in the year

2011. In event the defendant No.1 claimed any right by reason of

being a legal heir of Balu Gawde an appropriate demand could have

been made. However, the defendants have adopted a dubious

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method of reconstitution of the partnership firm of Swati Builders

by including the deceased Balu Gawde as the partner of the firm

and subsequently executing the sale deed of 5

th

May, 2022.

23.As no right accrued to the defendants to execute sale deed

on behalf of the partnership firm, the suit was rightly filed by the

plaintiff seeking a declaration that the registered sale deed of 5

th

May, 2022 is null and void.

24.The contention that the original owners were not impleaded

as parties to the suit was not raised before the Trial Court. That

apart, perusal of the deed of conveyance would indicate that the

defendant no.2 has executed the sale deed by utilizing the PoA of

the year 2002 which was executed in favour of the original owners

as partners of the Swati Builders. The deed of conveyance dated 5

th

May, 2022 has not been executed by the original owners but by the

defendant No.2 as the constituted attorney of the original owners.

The suit is presently at the exhibit 5 stage and it can always be

amended to implead the original owners as party to the original

proceedings, if required.

25.By exhibit 5 application, the relief sought was to restrain the

Defendants from creating any third party rights in the suit

properties, as the conveyance deed have been executed on 5

th

May,

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2022, and from restraining the Defendants from entering into the

suit properties. Prima facie, the development agreements as well as

the PoA executed in the year 2002-2003 demonstrates ownership

rights in favour of the Plaintiff firm. There is no cloud which is

raised over the title of the Plaintiff firm as the documents of 2002-

2003 have been admitted by the Defendants in the written

statement and it is also admitted that the documents have been

executed in the name of Swati Builders. Similarly, there can be no

challenge to the admission of incoming partners at the instance of

Defendants, who are not the partners of the partnership firm.

26.On the aspect of the possession, the documents produced by

the Defendants to demonstrate their possession were the

photographs. The photographs on record, which are from the inside

and outer portion of subject property, are by itself insufficient to

come a finding that the Defendants are in possession of the suit

property. The development-cum-sale agreements contained a

recital that the possession has been handed over to the Plaintiff

firm. The Defendant No.2 had retired from the partnership firm in

the year 2011 and could not be said to be in possession of the suit

property. Insofar as the Defendant no.1 is concerned, he was never

inducted in the partnership firm. It is an admitted position that the

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suit properties are vacant land in which case the possession would

follow title and the development agreements which have been

executed in the year 2002-2003 prima facie indicates the title in

favour of the plaintiff firm.

27.The Trial Court has rightly noted that the sale deed of 5

th

May,

2022 refers to the defendants as partners of the partnership firm

and there are no documents produced on record to demonstrate

that the defendants were partners of the plaintiff firm. It has also

rightly noted that the suit properties were purchased in the name

of the partnership firm and the same properties are sought to be

shown as being purchased under the conveyance deed of 2022 on

the basis of the PoA executed in the year 2002 by the original

owners in favour of Swati Builders. It also rightly noted that if the

case of the Defendants is that the suit properties are the individual

properties of the partners, then there was no necessity of

reconstitution of the firm in the year 2021.

28.For the purpose of grant of the injunctive relief of the

defendants, it was necessary for the plaintiff firm to demonstrate a

prima facie case, balance of convenience and irreparable loss and

injury. The indenture of the year 2003-2003 would prima facie

indicate the development agreement being executed by the

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original owners in favour of the plaintiff firm. Upon retirement of

the Defendant No.2 in the year 2011, there was no right remaining

in the Defendant no.2 in the partnership’s assets. The Defendant

no.2 after having retired from the firm in the year 2011 had not

instituted any proceedings claiming to be continuing as partner of

the firm and seeking any reliefs in respect of the partnership’s

assets or share in the profits. After lapse of almost 10 years, the

Defendant no.2 along with Defendant no.1 have reconstituted a

partnership deed in the same name and have created an indenture

styled as “conveyance deed” which is executed by the Defendants

as partners of the partnership firm of Swati Builders mis-utilizing

the PoA of the year 2003. Prima facie, the document of 5

th

May,

2022 cannot create any ownership rights in favour of the purported

reconstituted partnership firm of Swati Builders and or in favour of

the defendants. The Plaintiff has prima facie proved its ownership

rights in the suit properties by virtue of registered documents of

2003-2003.

29.Insofar as the possession is concerned, there is nothing

produced on record to demonstrate the defendants’ possession

over the suit property apart from the photographs. The recitals in

the development agreements show that the possession was

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handed over to the plaintiff firm and being a vacant land possession

follows title. Insofar as the balance of convenience is concerned,

till the purported reconstitution of the partnership firm in the year

2021, neither the defendant No.1 nor the defendant No.2 were

partners of the partnership firm. The suit property which was

purchased in the name of the partnership firm was sought to be

fraudulently conveyed in favour of the reconstituted firm. The

documents of the year 2003-2003 in favour of the Plaintiff firm and

the admission of the induction of the partners of the Plaintiff firm

in the year 2011 tilts the balance of convenience in favour of the

plaintiff firm. In event, the Defendants, who prima facie do not

have any semblance of right in the suit property are not restrained

from interfering in the plaintiff’s possession, irreparable injury

would be caused to the Plaintiff as it would not be entitled to deal

with its own property.

30.In light of the above, the Trial Court has rightly exercised the

discretion and there is no warrant for interference with the order

of the Trial Court. Resultantly, the Appeal fails and stands

dismissed.

[Sharmila U. Deshmukh, J.]

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