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CASE NO.:

Appeal (civil) 6790 of 2003

PETITIONER:

Janki Vashdeo Bhojwani & Anr.

RESPONDENT:

Indusind Bank Ltd. & Ors.

DATE OF JUDGMENT: 06/12/2004

BENCH:

D.M. DHARMADHIKARI & H. K. SEMA

JUDGMENT:

J U D G M E N T

H.K.SEMA,J.

This appeal is directed against the judgment of the

Bombay High Court dated 23-4-2003. The appeal has been heard at

length by a Bench in which one of us was a Member, Sema,J and by

an order dated 10-2-2004 reported as Janki Vashdeo Bhojwani

And Another vs. Indusind Bank Ltd. And others, (2004) 3 SCC

584) it was remitted to the Tribunal with the following directions in

paragraphs 24 at Page SCC 587:

"In our view, it is essential, before any further orders can

be passed to first decide whether or not the appellants

have a share in this property. We therefore remit the

matter back to the Debt Recovery Tribunal to record a

finding whether or not on the date the decrees were

passed, the appellants were co-owners of the property at

38, Koregaon Park, Pune and if so, to what extent. In so

deciding the Debt Recovery Tribunal will undoubtedly

ascertain whether the appellants had any independent

source of income and whether they had contributed for

purchase of this property from their own independent

income. The Debt Recovery Tribunal will also decide

whether this property was the residence of the appellants

at the time possession was taken. The Debt Recovery

Tribunal shall permit the parties to lead evidence, both

oral and documentary. It must be clarified that the burden

of proving that the appellants have a share in the property

will be on the appellants. The Debt Recovery Tribunal

shall then forward its decision to this Court within a period

of six months from today."

(Emphasis supplied)

Avoiding prolixity, but at the risk of repetition the directions were

founded on the following facts:

The 1st appellant is the wife of the 5th respondent and the 2nd

appellant is the wife of the 2nd respondent.

The respondent-bank extended loan facilities to the 6th and 7th

respondents, M/s Bhojwani Hotels Pvt. Ltd. and Hotel Amir Pvt. Ltd.,

which are run by respondent Nos. 2 to 5 namely Dr. Laxmikant

Rewachand Bhojwani, Mr. Sanjay Laxmikant Bhojwani, Mr. Romy

Laxmikant Bhojwani and Mr. Vashdeo Rewchand Bhojwani. The loan

facilities were to the extent of Rs. 22 crores in one case and Rs.3.75

crores in the other. Respondents 2 to 5 were also guarantors and

some of the properties belonging to the parties have been mortgaged

to the bank. Initially, Plot No.38, Koregaon Park, Pune was also

stated to have been mortgaged to the bank. It is now admitted by the

respondent-bank that the said plot was not mortgaged to the bank.

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As the loan had not been repaid, the respondent-bank filed a

suit against 2nd and 7th respondents on 3.10.2000, OA No. 159-P of

2001 before the Debt Recovery Tribunal (hereinafter referred to as

the DRT) for recovery of a sum of Rs.3.86 crores. The first

respondent-bank also filed another suit against respondent nos. 2 to

6 and one M/s Progressive Land Development Corporation, OA No.

160-P of 2001 for recovery of a sum of Rs.27.5 crores. M/s

Progressive Land Development Corporation is a partnership firm of

which the appellants are partners, along with others. The DRT by an

order dated 11-12-2000 passed an injunction order in an application

made in OA No.160-P of 2001. The plot no.38, Koregaon Park, Pune

was one of the properties which the respondents were restrained

from alienating. The DRT also passed a decree on 13-9-2001 in OA

No.159-P of 2001 in favour of the respondent-bank in which the

property at 38, Koregaon Park, Pune was shown as one of the

mortgaged properties. A recovery certificate was also issued by the

DRT and pursuant thereto the properties were attached on 8.11.2001

in which the property at 38, Koregaon Park, Pune was also attached.

Thereafter, pursuant to attachment, a public notice was published in

the Times of India of 25.1.2002 publication, notifying that the

properties of the second respondent have been attached.

It is only at this stage, the appellants have filed objections

before the DRT against the attachment of the residential property at

38, Koregaon Park, Pune on 16.4.2002, which were rejected by the

Recovery Officer on the premise that he could not go beyond the

decree. In the application, the appellants claimed that they came to

know of the attachment through the advertisement published in the

Times of India of 25.1.2002.

As already noticed, the 1st appellant is the wife of the 5th

respondent and the 2nd appellant is the wife of 2nd respondent. On

3.10.2000 the respondent-bank filed a suit against the 2nd

respondent and the 7th respondent, OA No.159-P of 2001 before the

DRT for the recovery of a sum of Rs.3.86 crores. Again on 25th

October, the respondent-bank filed another suit against

respondent nos. 2 to 6 and one M/s Progressive Land Development

Corporation, OA No.160-P of 2001 for recovery of a sum of Rs.27.5

crores. M/s Progressive Land Development Corporation is a

partnership firm of which the appellants are the partners along with

others. Thereafter, as recited above the DRT passed an injunction

order in which one of the properties the respondents were restrained

from alienating was 38, Koregaon Park, Pune. On 13.9.2001, a

decree was passed in OA No.159-P of 2001 and in the said decree

the property at 38, Koregaon Park, Pune was shown as one of the

mortgaged properties. All these proceedings against their husbands

and M/s Progressive Land Development Corporation which is a

partnership firm and in which the appellants are partners along with

others, were within the knowledge of the appellants. The appellants,

however, feigning ignorance of the facts and proceedings, took a plea

that they came to know about the attachment of the property at 38,

Koregaon Park, Pune only through the public notice published in the

Times of India of 25.1.2002.

In the backdrop of given facts and circumstances, this Court

has already observed in its order dated 10.2.2004 at page 585 SCC

as under:-

"This averment is impossible to believe. It is clear that

they were aware of the proceedings against their

husbands and family concerned."

The property at 38, Koregaon Park, Pune was purchased from

Ms. Sushila Talera and the consideration for the purchase was paid

to her on 25.8.1987. It is not disputed that the indenture of sale was

executed on 5.9.1991. It is also not disputed that payment on

25.8.1987 was entirely made by M/s Bhojwani Brothers, HUF, a

separate legal entity. It is the case of the appellants that the said

amount was paid by M/s Bhojwani Brothers on behalf of the

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appellants and the same was treated as a loan extended to the

appellants which was subsequently repaid by the appellants in 1992.

In short, the appellants sought to build up a case, albeit belatedly,

that the appellants had contributed the consideration amount and

they are the co-owners in respect of property at 38, Koregaon Park,

Pune. The appellants are neither debtors nor guarantors and,

therefore, the property in question to the extent of their share in the

property could not have been sold in the execution of the decree.

Pursuant to the directions quoted above, the DRT has recorded

a finding by its order dated 2.8.2004. The parties have filed

objections to the finding. The Tribunal has framed the following

issues, purportedly pursuant to the directions by this Court:

(i) Whether the appellants have any share in the property (38,

Koregaon Park, Pune) subject matter of dispute?

(ii) Whether on the date decrees were passed, the appellants

were co-owners of the said property?

(iii) Whether the said property was the residence of the

appellants at the time possession was taken?

The fallacy of the Tribunal begins with the framing of the issues. The

issues as noticed above are inconsistent with the directions of this

Court. The directions contained in paragraph 24 are that the

Tribunal was directed to record a finding whether or not on the date

the decrees were passed the appellants were co-owners of the

property at 38, Koregaon Park, Pune and if so to what extent. In

deciding the aforesaid issue, the DRT will ascertain whether the

appellants had any independent source of income and whether they

had contributed for purchase of this property from their own

independent income. The Tribunal was directed to permit the parties

to lead evidence, both oral and documentary. This Court further

clarified that the burden of proving that the appellants have a share in

the property will be on the appellants.

The second fallacy of the order of Tribunal was allowing

Mr.V.R.Bhojwani (power of attorney holder), husband of appellant

no.2 Ms.Mohini Laxmikant Bhojwani, to appear in the witness box on

behalf of the appellants. It may be noted that that the appellants

were shy away from gracing the box. The respondent-bank

vehemently objected to allowing the holder of power of attorney of the

appellants to appear in the witness box on behalf of the appellants.

This Court clarified that the burden of proving that the appellants

have a share in the property will be on the appellants and it was

incumbent on the appellants to have graced the box and discharged

the burden that they have a share in the property, the extent of share,

the independent source of income from which they have contributed

towards the purchase of the property. The entire context of the order

dated 10.2.2004 was forwarded to the Tribunal for the purpose. It is

unfortunate that the Tribunal has framed its own issues not consistent

with the directions and recorded a finding contrary to the directions as

aforesaid.

Dr. Singhvi, learned senior counsel appearing for the

respondent-bank vehemently contended that the appellants did not

grace the box to lead evidence but authorised Mr. V.R. Bhojwani

(power of attorney holder) to appear on behalf of the appellants.

Learned counsel contended that Mr. Bhojwani was not an

independent person to the litigation but was a judgment debtor in the

suit and a co-owner of the property and there was a clash of interest

between the husband and wife and as such he could not have been

permitted to grace the box on behalf of the appellants. He further

contended that under Order III Rules 1 & 2 CPC a power of attorney

holder can appear, apply or act in any court but such act cannot be

extended to depose in the witness box. He further submitted that in

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the present case a power of attorney holder is not acting as a witness

on behalf of the principal but he is representing the principal himself.

He further contended that deposing in a witness box and being cross-

examined is a personal act and cannot be done through an

agent/power of attorney holder.

In the context of the directions given by this Court, shifting the

burden of proving on the appellants that they have a share in the

property, it was obligatory on the appellants to have entered the box

and discharged the burden by themselves. The question whether the

appellants have any independent source of income and have

contributed towards the purchase of the property from their own

independent income can be only answered by the appellants

themselves and not by a mere holder of power of attorney from them.

The power of attorney holder does not have the personal knowledge

of the matter of the appellants and therefore he can neither depose

on his personal knowledge nor can he be cross-examined on those

facts which are to the personal knowledge of the principal.

Order III, Rules 1 and 2 CPC, empowers the holder of power of

attorney to "act" on behalf of the principal. In our view the word "acts"

employed in Order III, Rules 1 and 2 CPC, confines only in respect of

"acts" done by the power of attorney holder in exercise of power

granted by the instrument. The term "acts" would not include

deposing in place and instead of the principal. In other words, if the

power of attorney holder has rendered some "acts" in pursuance to

power of attorney, he may depose for the principal in respect of such

acts, but he cannot depose for the principal for the acts done by the

principal and not by him. Similarly, he cannot depose for the principal

in respect of the matter which only the principal can have a personal

knowledge and in respect of which the principal is entitled to be

cross-examined.

Having regard to the directions in the order of remand by which

this Court placed the burden of proving on the appellants that they

have a share in the property, it was obligatory on the part of the

appellants to have entered the box and discharged the burden.

Instead, they allowed Mr. Bhojwani to represent them and the

Tribunal erred in allowing the power of attorney holder to enter the

box and depose instead of the appellants. Thus, the appellants have

failed to establish that they have any independent source of income

and they had contributed for the purchase of the property from their

own independent income. We accordingly hold that the Tribunal has

erred in holding that they have a share and are co-owners of the

property in question. The finding recorded by the Tribunal in this

respect is set aside.

Apart from what has been stated, this Court in the case of

Vidhyadhar vs. Manikrao and Another, (1999) 3 SCC 573

observed at page 583 SCC that "where a party to the suit does not

appear in the witness-box and states his own case on oath and does

not offer himself to be cross-examined by the other side, a

presumption would arise that the case set up by him is not correct".

In civil dispute the conduct of the parties is material. The

appellants have not approached the Court with clean hands. From

the conduct of the parties it is apparent that it was a ploy to salvage

the property from sale in the execution of Decree.

On the question of power of attorney, the High Courts have

divergent views. In the case of Shambhu Dutt Shastri Vs. State

of Rajasthan, 1986 2WLL 713 it was held that a general power of

attorney holder can appear, plead and act on behalf of the party but

he cannot become a witness on behalf of the party. He can only

appear in his own capacity. No one can delegate the power to appear

in witness box on behalf of himself. To appear in a witness box is

altogether a different act. A general power of attorney holder cannot

be allowed to appear as a witness on behalf of the plaintiff in the

capacity of the plaintiff.

The aforesaid judgment was quoted with the approval in the

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case of Ram Prasad Vs. Hari Narain & Ors. AIR 1998 Raj. 185. It

was held that the word "acts" used in Rule 2 of Order III of the CPC

does not include the act of power of attorney holder to appear as a

witness on behalf of a party. Power of attorney holder of a party can

appear only as a witness in his personal capacity and whatever

knowledge he has about the case he can state on oath but be cannot

appear as a witness on behalf of the party in the capacity of that

party. If the plaintiff is unable to appear in the court, a commission for

recording his evidence may be issued under the relevant provisions

of the CPC.

In the case of Dr.Pradeep Mohanbay Vs. Minguel Carlos

Dias reported in 2000 Vol.102 (1) Bom.L.R.908, the Goa Bench of

the Bombay High Court held that a power of attorney can file a

complaint under Section 138 but cannot depose on behalf of the

complainant. He can only appear as a witness.

However, in the case of Humberto Luis & Anr. Vs. Floriano

Armando Luis & Anr. reported in 2002 (2) Bom.C.R.754 on which

the reliance has been placed by the Tribunal in the present case, the

High Court took a dissenting view and held that the provisions

contained in order III Rule 2 of CPC cannot be construed to disentitle

the power of attorney holder to depose on behalf of his principal.

The High Court further held that the word "act" appearing in order III

Rule 2 of CPC takes within its sweep "depose". We are unable to

agree with this view taken by the Bombay High Court in Floriano

Armando (supra).

We hold that the view taken by the Rajasthan High Court in the

case of Shambhu Dutt Shastri (supra) followed and reiterated in the

case of Ram Prasad (supra) is the correct view. The view taken in

the case of Floriano Armando Luis (supra) cannot be said to have

laid down a correct law and is accordingly overruled.

In the view that we have taken we hold that the appellants have

failed to discharge the burden that they have contributed towards the

purchase of property at 38, Koregaon Park, Pune from any

independent source of income and failed to prove that they were co-

owners of the property at 38, Koregaon Park, Pune. This being the

core question, on this score alone, the appeal is liable to be

dismissed.

Despite, we now proceed to consider the documentary

evidence produced. The admitted position is that the consideration

for sale was paid by M/s Bhojwani Brothers, a distinct legal entity.

M/s Bhojwani Brothers is a Hindu Undivided Family. The said HUF

as a distinct entity filed Income Tax Returns. Shri L.R. Bhojwani and

his two sons Sanjay and Romy Bhojwani had filed income tax returns

showing themselves as owners of 1/4th share each in suit property.

In the photo copies of the income tax returns filed by Shri V.R.

Bhojwani (power of attorney holder) 1/4th is struck off and is

interpolated into 1/7th share. This fact was admitted by him in cross-

examination, Vol. V at page 115. He has also admitted that the

correction is not depicted in the original papers received from income

tax office. The Tribunal also holds that there was interpolation by

pencil which was not depicted in the original papers received from the

Income Tax office.

Mr. Rohtagi, learned senior counsel, has drawn our attention to

the indenture for sale dated 5.9.1991 and submitted that the name of

the appellants appeared at Sl. Nos. 3 and 4 of the sale indenture.

According to the counsel they are the co-purchasers. We are

unable to accept this contention merely because their names appear

in the sale indenture by itself would not be a conclusive proof that

they are the co-purchasers. Mr. Rohtagi, learned senior counsel for

the appellants, referred to the Income Tax Return for the Assessment

year 1988-89 in which at Sl.No.6 (Vol.V at page No.144) it is shown

that during the year the assessee, 2nd appellant, has paid

Rs.4,65,000/- to Mrs. Susheela Talera towards purchase of Plot No.

38, Koregaon Park, Pune, out of loan taken from M/s Bhojwani Bros.

Counsel also drew our attention to Sl.Nos. 3 and 4 at page 155 Vol.V

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showing that the assessee has paid Rs. 45,000/- towards Stamp Duty

for Plot at 38, Koregaon Park, Pune, out of loan taken from M/s

Bhojwani Bros. and deposited Rs. 76,000/- in Dr.L.R.Bhojwani Jt. A/c

towards the payment for plot at 38, Koregaon Park, Pune, out of sale

proceeds of 100 shares of Bajaj Auto Ltd. at Rs. 710 per share. He

has also drawn our attention to Sl.No.5 at page 159 Vol.V showing

that during the year assessee has received the following foreign

remittances under Foreign Exchange (Immunities) Scheme 1991:

a) US$ 50,000 vide DD No. 484485 drawn on Marine

Midland Bank dt 19.10.91, NA, New York. The Indian

currency equivalent to Rs. 12,88,660 has been deposited

in SB A/c NO.7930 with UBI, Pune Camp Branch. The

xerox copy of Certificate No.284 issued by UBI, Pune

Camp Branch is attached.

b) US$ 25,000 vide TT No. 559271 drawn on Bank of India,

Singapore. The Indian currency equivalent to Rs.

6,43,902 has been deposited in SB A/c No. 7930 with

UBI, Pune Camp Br. The xerox copy of Certificate No.92

issued by UBI, Poona Camp Branch is attached.

At page 160 Vol.V, Sl.No.8 and 9 it is shown that the assessee has

deposited Rs. 3,47,465 in CA No. 22035 with Union Bank of India,

Poona Camp Branch towards the payment to be made for

construction of residential house at 38 Koregaon Park, Pune, out of

sale proceeds of shares and foreign remittances received. The

assessee has paid Rs. 15,03,290/- to M/s Bhojwani Brothers towards

the return of loan taken on CA out of foreign remittances received.

He has also shown at page 164 Vol.V, Sl.No.6 and 8 that the

assessee has invested Rs.75,000/- in construction of bungalow at 38

Koregaon Park, Poona, out of rent and salary received and balance

in SB A/c No. 7930 with UBI, Poona Camp Branch and sale proceeds

of shares. The Assessee has paid Rs. 2,26,995/- to M/s Bhojwani

Brothers vide Cheque No. 286141 dated 31.3.93 on Current Account

out of gift received from Mr. Arjan Khialani of Singapore. Counsel

has also shown at page 167 Vol.V, Sl.No.8 that during the year 1993-

94 the assessee has acquired 1/7th share in bungalow at 38

Koregaon Park, Pune, which was ready for possession in December

1993. The cost of her share comes to Rs. 21,25,966/- which was

partly financed by M/s Bhojwani Brothers, Poona.

There is no proof that the source is from the independent

income of the appellants. As already noticed the figure 1/7th share

has been interpolated with pencil and no reliance can be placed on

this document.

In respect of appellant No.1 Mrs. Janki Vashdeo Bhojwani, the

learned counsel submitted that during the assessment year 1988-89

it is shown at Sl.No.1 page 169 Vol.V that the appellant has paid

Rs.4,65,000/- to Mrs. Susheela Talera towards purchase of Plot

No.38 Koregaon Part out of loan taken from M/s Bhojwani Brothers of

Rs.4,65,000/-. It is also shown at Sl.No.3 at page 178 Vol.V that the

assessee has paid Rs. 45,000/- towards stamp duty for plot at 38,

Koregaon Park, Pune, out of loan taken from M/s Bhojwani Brothers.

At page 182 Vol.V, Sl.No.5 it is shown that the assessee has

received the following remittances under Foreign Exchange

(Immunity) Scheme 1991:-

? US$ 50,000 vide DD No. 484486 at 19.10.91 drawn on

Marine Midland Bank, NA, New York. The Indian

Currency equivalent to Rs. 12,88,660 has been deposited

in SB A/c No. 14910 with UBI, Pune Camp Br. The xerox

copy of the Cert No. 285 issued by UBI, Pune Camp

Branch is attached.

? US$ 25,000 vide TT No. 559271 Bk of India, Singapore.

The Indian Currency equivalent to Rs. 6,43,902 has been

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deposited in SB A/c No.14910 with UBI, Poona Camp Br.

The xerox copy of Cert. No.92 issued by UBI, Poona

Camp Branch is attached.

At Sl.no.8 it is shown that the assessee has deposited Rs. 2,87,037/-

in CA A/c No.22035 with Union Bank of India, Poona Camp Br.

towards the payment to be made for construction of residential house

at 38 Koregaon Park, Pune out of LIC loan, sale of shares and partly

from foreign remittances received. At Sl.No.9 it is shown that the

assessee has paid Rs. 13,90,383/- to M/s Bhojwani Bros towards the

return of loan taken on CA out of foreign remittances received.

The above figures do not disclose the source of income and

that this income is their own independent income and they had

contributed for purchase of the suit property. No reliance can be

placed on the said documents.

Regarding the capital received from foreign remittances under

Foreign Exchange (Immunity) Scheme, 1991, learned counsel Mr.

Rohtagi contended that under the scheme the appellants are immune

from disclosing the source of receipt. It is true that as per the terms

of the scheme the recipient will not be required to disclose for any

purpose the nature and source of remittances and further no enquiry

or investigation will be commenced against the recipient under any

law on the ground that he has received such remittance. It only

protects the appellant from prosecution under FERA and income tax.

It does not prohibit the appellants from disclosing the sources.

Furthermore, the remittance, so received by the appellants, could not

be described as income, much less an independent income. As

already noticed, in the instant case, a duty is cast upon the appellants

to discharge the burden of proving that the appellants have a share in

the property. The appellants could have disclosed the source of

remittance to discharge the burden.

At this stage we may also notice that the appellants relied upon

the gifts from relatives and friends see Vol.V pages 57-59 which show

that the appellants have received some amount of gifts in terms of

US$ from foreign countries. Mr. V.R.Bhojwani admitted that the three

donors were not related by blood and two donors were distant

cousins. It is apparent that the so-called gifts made by the donors

were actually sent by the husbands of the appellants through name-

lenders and by no stretch of imagination it could be an income, much

less an independent income of the appellants. Similarly, the net

income of the appellants during the year 1992-93 shown at pages 57-

59 (Vol.V) was not adequate to repay the loan.

For the reasons aforestated the appellants have miserably

failed to establish that on the date the decrees were passed, the

appellants were the co-owners of the property at 38, Koregaon Park,

Pune. They further failed to establish that they have any independent

source of income and they have contributed for purchase of the

property at 38, Koregaon Park, Pune, from their own independent

income. Further the appellants failed to discharge the burden of

proving that the appellants have a share in the property. The other

connected issues are only consequential to this issue and it may not

be necessary for us to deal with them in view of our decision above.

Accordingly, the appeal fails and is dismissed with costs.