COMMR.OF I.T. RAJAHMUNDRY vs. M/S.NARAYANA CHOWDARYAND ORS KAKINADA

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD FRIDAY THE TENTH DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE JUSTICE MOU.SHUMI BHATTACHARYA THE HONOURABLE SMT JUSTICE M.G.I-RIYADARSIN' CITY CIVILCOURT APPEAL NO: 77 80 81 &82 0F 2002 AND l.A.No.6 of 2013 {XOBJ No..13988 of 2013) IN/AND CCCA.No.1 20 of 2013 CITY CIVIL COURT APPEAL NO:77 of2OO2 CITY CIVIL COURT APPEAL NO: 80 of 2002 Regular Appeai under section 96 of c.p.c against the Judgment and Decree dated 23.02.2001 made in o.s No.20B1 of 19g7 on the fire of the court of the Firsr Senior Civil Judge, City Civil Cour^i Hyde,.abao. Regular Appeal under section g6 of c.p c against the Judgment and Decree cated 23 o2.2001 made in o.s.No.2083 of ig97 on the fire of the court of the First Senror Civil Judge, City Civil Couft Hyderabad. Between: lvl/s lmaqe Developers pvr Ltd rep by its. Chairman and Managing Direclor C .Venkateswara Rao.S/o _veniairari ayyr" ,J"1"'"oout 44 years. occ Busrness. R/o ptot No 144. noaa No: .lutll"";itd H]roerauac,i .,.PLAINTIFF/APPELLANT AND N RavindrqK-umar, S/o N.M.,Choudhary._ aged 36 years, Occ. Business, R/o PIot No 198, Road No 14, Jubitee Hiila'*yj;b;'-"'" ..,DEFENDANT/RESPONDENT i I

Between: M/s lmaqr [), ,i elooers pvt t td rep by its, Charrrnan ar,d M anaging Director C..Venkat,:".r:ra Rao S/o Ven tatrariiayya- ,t"l- ,0,ut .+4 years, Occ. Busines; f,i. rtot No 144. noro ruo) jutli;";1:ii; H"yd,:rab rd ... APPELLI\NT/ PLAINTIFF AND N Vijayalaksh^ri Wio N M ghgqd|rary,.gSed about _ yerrs, )cc Housewife, R/o Ptor No 1!rJ Road No -14, Jub;te;'Hil;;yl"ilt"o .., RESPONDEN,I-l DEFENDANT ctTY CtvtL COUFIr ITPPEAL No: 81 of 20O2 Regurar l\pcear under Section g6 0f c.p.c against the Jucgment and Decree dated 23.oz20ci nrrr Je in o.S.No 20g0 of 1997 on the fire of *e c,)urt of the First Senior Civil Judge ,Jr1y Civil Court Hyderabad. Between: M/s lmagr: i)ev:lopers pvt. Ltd. rep by its, Chairman and tVlarraging Director C. Venkat,:s,,r.,a I ;: Rao,S/o Venkatramayya aged abou, 44 years, Occ. Business. R, c F |,rt No. .14,A. Road No.2 Jubilee Hills, Hvderabao . ...PL.AINTIFF /APPELLANT AND 1. B.Ratnakunilrt tllo B Hupendranath - (Died per LR _ R2). 2. N. Ravrndra i(.rnr.:r S/o N.M.Choudary, Aged about 62, years. (.rcc. Business. R/o. Plot Nc. tilS Road No 14, Jubilee Hills, Hyderabad. (Respondent No it r:; L)rtught on record as per LR of deceaseC Scle Rr;5p6nlsn1 s5 percourtorderdatec t)7 06.2023Vide rA No.'10f 2023 in cccA No 8.r of 2002) ,..DEFENDAN T/Rt; SPONDENT

CITY CIVIL COURT APPEAL NO: 82 ot 2002 Regular Appeal under Section 96 of C.p.C against the Judgment and Decree dated 23.02.2001 made in O.S.No.2082 of 1997 on the file of the Court of the First Senior Civil Judge. City Civil Court Hyderabad. Between: M/s lmage Developers Pvt. Ltd. rep by its, Chairman and Managing Director C Venkateswara Rao,S/o Venkatramayya aged about 44 years, Occ. Business, R/o Plot No.'144, Road No.2 Jubilee Hills, Hyderabad. ...PLAINTIFF/APPELLANT AND N Subash, S/o N.M.Choudary, Aged about 39 years, Occ. Business, R/o Plot No.'198, Road No.14, Jubilee Hills, Hyderabad. ..,DEFENDANT/RESPONDENT C|TY CIVIL COURT APPEAL NO: 120 ot 2O13 Regular Appeal under Section g6 of C.P.C against the Judgment and Decree dated 28 03 2013 made in O.S No.115 of 2006 on the file of the Court of the Xill Addl Chief Judge, City Civil Courts Hyderabad. Between: '1. Iv1/s. lmage Developers Pvt.Ltd.,, Rep by its Managing Dreictor, Mr.C.Venateswara Rao, S/o. Venkatramaiah, aged 58 yrs, occ Business, R/o.Plot No.14-A, Road No.2, Jubilee Hills, Hyderabad- 500 033. 2. C.Venkateswara Rao, Slo. Sri Venkatramaiah, aged 58 yrs, Occ_ Business R/o. Plot No. 14-A, Road No. 2, Jubilee Hills, Hyderabad - 500 033 3. C.Seshartnamma (Died), - 4. K. Pattabhiramaiah, S/o- K.Anjaiah, hindu, aged abou|72 yrs, occ Agriculture R/o. Plot No. 14-A, Road No. 2, Jubilee Hills, Hyderabad - 500 033 5. K R V.R.Mohan Rao, S/o. K. Pattabhiramaiah, aged about 46 yrs, occ Agriculture R/o. Plot No. 14-A, Road No.2, Jubilee Hills, Hyderabad - 500 033 6. tvl/s- lmage Finance Pvt.LId.,, Rep.by its M.D., C.Venkateswara Rao,S/o. C.Venkatramaiah, aged 58 yrs, occ Business R/o. Plot No. 14-A, Road No. 2. Jubilee Hills, Hyderabad - 500 033 I

1 N.Subhash, S/o. N.M.Choudary, Aged about 50 years, Occ: Business R/o Plot No. '198, Road No. 14, Jubitee Hiils, Hyderabad - 500 033. N.M Choudary, Aged about 7l years, 198, Road No. 14, Jubilee Hills, Hyderabad - N.Ravindra Kumar, S/o. N.M.Choudary, Aged about 52 years, Occ: Business, Rl/o. Plot No. 198, Road No. 14, Jubite-e Hilts, Hyderabad - 50b 033 B.Ratna Kumari (Died Per LR, Cross Objector No 3 / plaintiff No 3, Vide Court Order dated : 01 .06.2023, IA. No. 1 of 2023 in CCCA. No.B 1 ot 2002) ...CROSS OBJECTORS/PLAINTFFS AND M/s .lmage Developers_ Pvt.Ltd.,, Rep by its lVanaging Dreictor, lVlr.C.Venateswara Rao, S/o. Venkatramaiah, iged 5g yrs, "oc6 Business, Fl/o.Plot No.14-A, Road No.2, Jubitee Hills, Hyderibad- 500 033. C Venkateswara Rao, S/o_ Sri Venkatramaiah, aged 5g yrs, Occ: Business Rl/o. Plot No. 14-A, Road No. 2, Jubilee Hiils, Hydeiabaa - SOO OSe C.Seshartnamma (Died), K..Pattabhiramaiah, S/o. K.Anlaiah, hindu, aged about 72 yrs, occ Agriculture Rl/o. Plot No. 14-A, Road No. 2, Jubitee Hills, Hyderabad - 500 033 - K.R.V.R.Motran Rao, S/o. - K.Patlabhiramaiah, aged about 46 yrs, occ Agriculture Rl/o. Plot No. 14-A, Road No. 2, Jubilee Hills, Hyderabad -'50b 033 M/s.. lmage Finance Pvt.Ltd.,, Rep.by its M.D., C.Venkateswara Rao,Sio. C.V.enkatramaiah, aged 58 yrs, occ Business Rl/o. plot No. 14-A, Road Nb.2, Jubilee Hills, Hyderabad - 500 033 Kum, -Cha,lasani Soumya, D/o C Venkateswara Rao, Aged about 23 years, Occ - Student, Rl/o Plot No.'14-A, Road No.2, Jubilee Hiilsl Hyd-SO0 033.' lssac Christopher, S/o.not known, aged not known, Occ: not known O/o. pr. No 8-3-943 and 949 I F -1, lmage Trade Centre, yellareddy Guda, Ameerpet, Main Road, Hyderabad.'16 The Andhra Pradesh State Financial Corporation Ltd.,, Rep. by its Managing Director, Chirag Ali Lane, Abids, Hyderabad.001 J 4 2. Smt. N.Vijayalakshmi, Wo. Occ:Household R/o. PIot No 500 033 Counsel for the appellant in CCCA Nos: 77,80,81 &82102 Counsel for the Appellants ln CCCA No: 120113 SRI. M/S UNNAM LAW FIRM SRU P HEMACHANDRA 1 2 J 4 5 o 7 o I ...RESPONDENTS/ DEFENDENTS (Respondents 8 & 9 not necessary parties to this lVlemorandum of Cross Objections) Counsel for the for the re5pondents in all the appeals & lA No.6 of 2013 (xoBJ NO.13988 OF 2013) SRI R.A.ACHUTHANAND The Court delivered the following COMMON JUDGEMENT

THE HO N'BI,E JUSTICE MOUSHUMI BHA''ITTACHARYA AND THE H()N'BLE SMT. JUSTICE M.G.PRIYADARSINI CCA.Nos.77, 8O 81 and a2 of2OO2 AND I.$_,_Ilo.6 of 2013 (XOBJ No.13988 of 20.!q IN AND CCCA.No.12O of 2O13 c COMMON JUDGI\IENT: (Per Hon'ble Justice Moushumt BhartacharL/c ) The parties 1r CCCA.Nos.77, 80,81 and 82 of 2OO2 (the GpA Appeals) are commorl 'o (lrlCA.No. 120 of 2073 (the partition App,eal) 2. The :Lpp:llant No. 1-M/s.Image Developers p,rt_ Ltd. in CCCA.No.1120 of 2O13 is the sole appellant in thc 2O()2 (tipA) Appeals. The appellant \c .2 /c.venkateswara Rao (c.v-Rao) in the 2 )13 (partition) Appeal is the NLr taging Director of appellant No.1/lmage D,:velopers. 3. The r,:spc, ,leflt Nos.1 to 4 in CCCA.No.120 of :Zoll:i are the sole respondents, in e zrch of the GPA Appeals respectively. Tle respondent Nos.5 and 6 rrr .tL r: Partition Appeal are not parties to tl-re (iIA Appeals. 4. For the s:rll: of convenience, we propose to Ceal witt the batch of Appeals in trr.. ;r:ts i.e., the ,.GpA Appeals" (2OO.2) and Lhe ,.partition Appeal" (2O)3 .

2 CCCA.Nos.77 . 80, 81 and 82 of 2002 - "GPA Appeals" 5. These Appeals arise out of a common judgment dated 23 'O2 '2OOl dismissing the Suits filed by the appellanJ/Image Developers uide o.S.Nos.2o80 , 2o8l , 2oB2 and' 2o83 of 1997 . TIrIe Suits were frled by the appellant/lmage Developers challenging the cancellation of the General Power of Attorney instruments (GPAs) dated 24'll'L993 uide teg1stered Cancellation Deeds dated 3O.O7 .lgg7 ' The respondents executed the GPAs in favour of C-V. Rao in his indiyidual capacity' The appellant/lmage Developers however did not array C'V'Rao as a party to the Suits. The facts leadin to the Suits of 1997 for the sub ect matter of the 2002/ GPA Appeals 6. The source of the disputes between the parties is two properties bearing Sy.No.118/3 of Punj agutta (Schedule A'property) and Sy'No'14 of Yellareddyguda (Schedule 'B' property)' In 1992-1993' the appellant Nos.2-6 in the Partition Appeal (family $oup ofl C'V'Rao/the appellant No.2) and the respondents (family group of N'Subash/the respondent in C.C.C.A.No.82 of 2OO2l acquired individual titles to separate extents of the Schedule 'A'and 'B' properties under separate registered Sale Deeds' The adjacent lands were acquired on a pre-existing oral understanding

3 between tht: tr'c family groups for jointly devekrping ttre land into a multi-storierl cc rnmercial complex by pooling in t h :ir respective resources 7. The aPpel.lz nt Nos.2-6 in the partition dppeal a.cl :he respondents issued a declaration on 24.12.1992 authorizing c.v.RzLo t. sign on their behalf on th. rnp lication for building permission ard sanc.-ion plan from the Municipal c).rporation of Hyderabad (MCH). The rcspondents also handed over the r itle deeds in respect of their share of pro rerties to c.V. Rao for complet-r tr of permit and approval proces:i fo;- th,: Schedule .A, and 'B' propt,rr i,.s 8. The e>:ten I cf land owned by each individual lan,l owner was confirmed on tht r basis of plans prepared for appr.v:rl of the MCH pursuant to th,: {iiatutory approvals being granted under thr: Urban Land (ceiling and JRe gr .tion) Act, r976. T]^e responclents' fzLmil.,. group stood entitled to 1899 Square yards i.e., 35.o r% of th,: totar tea of 5424 Square Yards r>f the Schedule A, property and 2l5g Square yards i.e., 47.95'yo of thLe l..l extent of 45oo square yards of the Schedule B, property. 9 The appellerrrtllmage Developers was incorporatel or 18.11.1993 with C.V. Rrro, lris wife and respondent No.1/N.Srrbar,h AS equal :rppellant/Image Developers was inc,rrpc rated as per shareholders. The

4 the plan of C.V. Rao with a view to save Income Tax and minimize Wealth Tax and Capital Gains Tax arising out of the commercial development project of the Schedule A' and 'B' properties' The appellantllmage Developers claimed title to the land allo-tted to the respondents on the basis of the Development Agreements d'ated 24'11- 1993' 10. The respondents executed 7 GPAs on 24'll'1993 in keeping with the oral understanding between the individual 1 land owners who had pooled in therr resources for the joint development of the Schedule 'A' and B' properties. The respondents' cancellation of these GPAs is the subject matter of challenge in the present GPA Appeals' Sanctions from the MCH for construction on the Schedule A' and 'B' properties were obtained on 24.03.1992 (revised on 27 'll'1gg7l and on 27 'Ol '1993 (revised on 07.04.1997) respectively' Sanctions for the Schedule 'A' property obtained prlor to the execution of the registered Sale Deeds in favour of the parties herein were granted in the names of the erstwhile land owners. Sanctions for lhe Schedule 'B' property were granted in the I name of b.v.Rao and other individual land owners None of the sanctionswereinthenameoftheappellant/ImageDevelopers. 1 1. Construction work on the Schedule 'A' undertaken by the parties in their personal respondents spent Rs.65,5 2,OOO l- for the cQnstruction and excavation and ts' proPerties were capacities and the

5 works, as ajlainst Rs.1,O4,73,g2 1/_ expended by the rpp:llant Nos.2_6. The constructior work stopped after an order of status qtrc by the Trial court dated tr.:i. r.r997 in oS.No.2082 of 1992 & batclL (filed by the appellant/ I nrage _)evelopers). 12: Disputes; trt'r 1r,.ssn the parties arose after the respond,:nts cancelled the GPAs elie'1rr-rt3d in favour of c.V. Rao (the appe[an No.2 in the Partition Appeall .:hrough Cancellation Deeds datr:<l li0.O /. 1997 which were registerecl c,rr 2o. r r.rg97. Notices in relation to tl-re c ancelation of the GPAs were pr_r --lished in newspapers on 20.Cl6.l9gg ancl 21.06.199g. 13. The appellant/Image Developers filed O.S.Nos.2O8O 2087, 2OB2 and 2083 of 1()97 challenging the aforesaid cance ati.n treecls and for injunction r,3str-it ning the respondents from interlerir.g w.ith the operation of th,: .r evelopment Agreements dated 24.rr.rgg l. The Suits were dismisscd bv the Trial Court uid.e tihe impugned c()mrron judgment dated 23.O2.2OO1 CCCA.No.l2O t3 - "Partition Appeal" ot-);\r- 14. The responde,nts in the GpA Appeals filed rl.S.No. 15 of 2006 seeking partit.icn :f the Schedule A,and ,B, pr.perties as per the registered title der,c ri and for return of titre deeds and me;nc crofits along with interest from .hree years prior to the institutio^ of the Suit tilr the

6 date of the hnal decree' The said Suit was decreed uide ithe impugned judgment dated 28'03'20 13 The contentions of the parties 15, The appellant/lmage Developers contends that the respondents' title over their portion of the property stood transferred to the appellant/ Image Developer under the unregistered Development Agreements dated 24 'l1- 1993' 16. The respondents, on the other hand' urge that the respondents as well as the appellant Nos'2-6 in the Partition Appeal acqui'red title in their individual capacities in the Schedule 'A' and ''B' properties h 1992- 1993. The respondents dispute the factum ' of the "Development Agreements" dated' 24'Ll'1993 as being unregistered instruments which were not capable of transferring title in their respective portions of the Schedule 'A' and 'B' ProPertres in favour of the aPPellant/Image DeveloPers. ch forms the basis of the The Common Judgment dated 23.02.2001 whi "GPA Aooeals,,of2002 L7. The - common judgment O.S.Nos.2O82, 2O8O' 2O8l four Suits, namelY' was Passed and 2083 of 1n lgg7, frled bY Image for a declaration that the' 'Deeds of Cancellation ll DeveloPers /aPPellant

dated 3o.07. r !)'l 7 are illegar and not binding on tre .rtaintiff., The appellant/plarntirl a-lso sought an injunction againsjt the ck,fcndants from interfering u,ith t re Development Agreements and the GIY,s executed by the defendarlts. in ,avour of the plaintiff/appellant. i8. The Trial r-]rr:-rrt dismissed all the four Suits filed by p:raintiff/rmage Developers b1' Jr r !1ing that the plaintiff/Image De,reloPers did not have locus standi 1o c ,:stion the cancellation of the GpAs sirLcc the GpAs were not executed in f rvour of the praintiff but in favou r of c.'r'. Rao in his personal capilc i'-..r C.V. Rao was examined as DW I irr t h : proceedings before the Tr:al cr.rrrt. The Triar court also held that trre cipAs were not coupled with :. !t 'est and the defendants were entirred the refore to cancel/revokc thc GpAs. The Triar court further. r-rr:rd that the Development A:3rr:r:ments executed by the respective defi:.d;Lnts were not acted upon arrd tl-r tt the cancellation was neither illegal :_ror nvalid. The contentions_of t he Appellant/Image Developers 19. The subnlssions made by learned Senior Counsel appearing for the appellant lpltLtr tiff /rnage Developers in the four GprL Appears can be summarized as fr:ll,;ws: The Trial Cotll could not have decided on the ments of the cases whr:n tl'r: Court held that the appellant (pla.irLtilf_ tmage Developers) ctic not have locus stand,i to file the Suits 1

8 111 The GPAs dated 24.11.1993 executed by the respondents/defendants in favour of the appellant/plaintiff were coupled with interest and were not revocable' The investments made in the appellant-Image Developers by C.V.Rao and others were reflected in thg.-Books of Accounts of the Company llrr,age DeveloPers. The Development Agreements dated 24'11 1993 executed by the parties were neither sham nor nominal' The GPAs were executed according to Clause 12 of the Agreements. There is no evidence of the respondents' Rs.65,52,00O/- towards development of: Punjagutta and Yellareddyguda (Schedule properties) . Development investment the land A' and of in .B' made on behalf of the Respondents (Defendants in the Submissions Suits) 20. The unregistered instruments dated 24'll'1993 i'e'' the alleged "Development Agreements" cannot convey title to immovable property' The Development Agreements hence did not transfer any right' title or interestinfavouroftheappellantwithrespecttotheSchedule'A'andts' ! properties. The Development Agreements are void and unenforceable dui to failure of consideration and cannot be equated to Sale Deeds as they did not confer any possessory claim, title or interest in favour of the appellant over the immovable property' i 11 lV

9 21. It is alsc I he respondents, case that the GpAs ,,vere executed specifically in tl t: name of c.v. Rao (appellant No. 2 Lr the partition Appeal) and thcr':fore the appellant-lmage Developers cirl not have locus standi to challe:rrge the cancellation of GpAs si,ce no authority was vested with rl. V F rLo in person 22. The GPr\s :xecuted by the respondents identifj. C. ,y'. Rao as the "Managing trirect:r" of the appellant/Image Developers an.l no authority was vested in (l t/. Rao on behalf of the appellant/lmape Developers. Besides, C V Flao was not the ..Managing [)irer tor,, of the appellant/ Irr,agr: [)evelopers as on the date of signinll of the GpAs on 24.11.t993. 23. The unregil tered Development Agreements clate,i 2...11 .7993 are void due to faihrr,: of consideration. c.V. Rao caused se'e ral circuitous transactions t h .t rrgh his employees between f)ece mbe r I 994 and January 19915 b1 reason of which amounts were Ceposited in the accounts of the re,spondents (N.Subash and family), tnh to be taken back immedi:rt,:h' thereafter for creating an illusion of 1ran.;fer of money under the un.ellistered Development Agreements. 'I'hc, Development Agreements u'elr. l t_,nce sham and nominal documents.

10 24.TheGPAsdaled,24.ll.lgg3arerevocable.Anyfuturebenefrtthat may accrue to an agent owing to performance of obligations including the Development Agreements cannot amount to interest so as to render an agency irrevocable under section 2O2 of The-ladian Contract Act, 1872' Dates relevant and common to the GPA and Partition APpeals 25. In 1991, the appellant No.2/C'V'Rao ;;and the respondent No. l/N.Subash conceived the idea of constructing a Multi-Storied CommercialComplexinHyderabadandidentilredthelandinSurvey No.14 of Yellareddyguda and Survey No' 118/3 of Panjagutta" Hyderabad' for the said purpose. The appellant No'2/C'V'Rao and the respondent No.l/N.Subash reached an oral understanding on behalf of their respective family members to contribute proportionate share of funds as per their land holdings for construction of the Commercial Complex on the Panjagutta property (Schedule A' property)' The appellant No'2 and the respondent No.1 reached a similar understanding in respect of the .il Yellareddyguda property (Schedule 'B'property)' I ; 26. Possession of both the properties was handed over to the appellant No.2 and the respondent No.l and excavation work commenced soon thereafter. Sanctioned plars and building permissions from the MCH were obtained in March, 1992. Tire appellant No'2 and the respondent il

11 No.1 also obtaincd statutory approvals under thr: Urban Land (eeiling and Regrrlalio nl tct, 7976, in October, 1992. In lgg:a_g3, the erstwhile owners of the s.lr.'dule 'A'and 'B'properties executed riepe rate registered Sale Deeds in f;tv:ur of the appellant and the.respondent groups. 27 ' on 24.1i'.)992, the respondents issued a cleclarati,)n authorizing the appellart .l'l r,2/c.v. Rao to sign on their betLalf for obtaining permissions a,, i ;anctions from MCH. The respondents l-rr,,nded over the Title Deeds in rc:pect of their share of the properties; to the appellant No.2/C.V. Rzro. TtLe respondents, Title Deeds were 1en in nrrmber. 28. The apirelJzrnt No.1/Image Developers was inc,rrporated on 18.11.1993 rvi':h \e appellant No.2/C.V. Rao, the wifr: of the appellant No.2 and the r:spc,ndent No.1/N. Subash as equal share holders and as permanent frirect:rs. The appellant No.1/Image Deve.ope :s filed Form No.23 on 09.10. 1!)96 appointing the appellant No.2/C.V Rao as the Managing Dire(rtor. of the appellant No.l/Image Developers and the said Form No.23 rvr; s registered with the Registrar of Ocmpanies on 14.o2.1997. 29. On 24 .1'. .)993, the appellant No.2/C.V. Rao caused the respondents t_o -;i11n seven instruments viz., Development Agreements. The respondenl s s late that these Development Agreementl, were solely

12 meant for the purpose of saving Income Tax and minimizing Wealth Tax. The Development Agreements were unregistered documents. 30. Ot 24.11.i993, the respondents executed seven GPAs authorizing the appellant No.2/C.V. Rao in his personal capacity to deal with the respondents' land. The appellant Nos.3 to 6 executed 'similar instruments authorizing the appellant No.2/C.V. Rao in his personal capacity. 3 1 . In December , 1993 , construction work on i Schedule A' property was completed with pro rata contributions from the two groups. In January, 1996, construction work on the Schedule 'B' property was stopped due to disputes between the parties. ,l 32. On 10.09.1996, the appellant No.2/C.V. Rao addressed a letter to the respondents to allay the respondents' concerns over filing of Capital Gains Taxes under the Development Agreements dated 24'11' 1993' This letter was written after Income Tax raids were conducted in the premises of the appellant No.2/C.V. Rao on 23.02.1996 and O3'O4'1996 This letter is a ciucial document and discussed in ' the later part of the judgment. 33. Revised plans were issued on 07.04.1997 in the name of the appellant No.2/C.V. Rao and other land owners of the Schedule 'B' n

property for f r rther construction. on 02.05. 199,2, the rr:spondent No.l was remo,zeC from the Directorship of the appellz nt No. 1_Image Developers 34. On 30.0i'.':992, tlne respondents canielled the seren GpAs dated 24.11.1993 cxr_.,)uted in favour of the appellant N,r.2/C.V.Rao. The Deeds of Ca.nce[]zrtron dated 30.O7. I99Z were subsequenLy registered on 20.11.1997 ancL <:opies thereof were supplied to the appe.lant No.2/C.V. Rao. The Rr:rror:ations were published in newspapers ()n 20.O6. 199g and 21.06.1998 35. The ap1>r:,1:nt No.l/Image Developers, as the ;ole plaintiff, filed four Suits (O.S.N.s.208O,2OBt, 2082 and 2OB3 of 19971 on 24.tt.1gg1 challenging c:r.c:llation of the GpAs uide the registere<. cancellation Deeds dated -a().("7.IggZ and for injunction restrarning th,: rs5r..6..,. from interfering u'ith the operation of the Development A€rr( rements dated 24.11.1993. ()r .5. lI.lgg7, the learned Trial Court passed status quo orders in the s;Lrrl liuits 36. On2T.I'..1997, revised plans were issued by rhe l\{Cttin respect of the schedule 'A' ,roperty for further constructions; in the name of the appellant No.2,/L. v . Rao and other individual owners. t-he rsuits filed by the appellant N'o. J ,/Image Developers were dismissed bv the Trial Court

l4 Developers preferred the present batch of GPA Appeals (C'C'C'A Nos' 82' 80,77 &,81 of 2OO2l on 27 '06'2001 challenging the common judgment dated 23.O2-2OO| 37. On 17.11.2005, the respondent Nos' f io 4 it C'C C'A'No' 12O of 2O13 hled a Suit (O.S'No' 115 of 2006) before the learned XIII Additional Chief Judge (F-fc), City Civil Court, Hyderabad' against the appellants seeking partition of the Suit Schedule 'A'and 'B' properties as per their shares of the 2 groups and for return of the title deeds as well as for mesne Profits. 38. On 28.03.2013, the Trial Court passed a ireliminary decree for partition partly allowrng the prayers of the plaintiffs (the respondent Nos- 1 to 4 in C.C-C'A-No 12O of 2013) holding 'that the plaintiffs are entitled to partition of the Schedule ,A, and B, properties according to the extents of land covered under their respective fsale Deeds and also entitled to partition of the constructed area in the same ratio in the Schedule 'B' property and directing the defendant Nos'l and 2 (Irnage Developers and C.V' Rao) to return the Title Deeds of the plaintiffs in I respect of the Schedule 'A' and 'B' properties' i 39. Challenging the judgment dated 28'03 '2013 ' the defendants in O.S.No.115 of 20O6 hled the C'C'C'A'No'120 of 2013 (Partition Appeal) I

15 before this oourt on 1 I .09.2013. The respondents filer1 ()r,rss -objections in the said A.p oea I 40. A co-rrr,linate Bench of this court passed an ad ir terim order in the Partition A.pp:al (c.c.c.A.No. 12o of 2o131on oir.1 1.2o 3 suspending the impugned jr-ulgment and decree d,ated 2g.o3.2013 Th: respondents filed I.A.No.il of 2'013 on 13.11.2013 for vacating the siid ad interim order. 41. Issues r.rncer the GPA Apoeals 1. The Gr:nera[ Power of Attorneys dated,24.1 1.199.] cx ecuted by the respondr:n [:, in favour of the appellant No.2/C.V. Rao \Vhe lrer the appellant No. l/lmage [srrelopers has locus to chailenge the respondents' cancellation of the CpAs? ii. 'Whetl er the GPAs were coupled with irLtercst and were herrr:,: irrevocable? 2. Whethe,r the Development Agreements are voirl in vier.ir of failure of considerzrticr and are sham and nominal documents? Issue 1[i] - \1.'helhCr the appellant No. elopers has locus to challe e the re!l)ttndents' cancellati on of the GPAs. i) 42' The statenr':.rt made in the praint in o.S.No.!rO g2'. of 1997 by ti.e appellant/Ima.g,' I):vclopers is that the cpAs referreci to ht, r)evelopment 1

t6 Agreements authorized the plaintiff (appellant /Image Developers) to deal with development and sale of the Schedule A' property and execute necessary documents in favour of the intending purchasers' The respondents countered this position in theig 'Written Statement stating that the appellant/Image Developers did not have locus to challerige the cancellation of the GPAs since the GPAs were executed in favour of C.V.Rao in his Personal caPacitY. 43. The GPA executed by N. Subash in favour of C.V.Rao should be seen with reference to the GPAs executed by C'V' Rao in favour of the appellant/lmage Developers as well as the otheri GPAs exequted by C' Sesharatnamma (appellant No.3 in the Partition Appeal) I in favour of C.V.Rao as also the GPA executed by M/s'Image ance Private Limited for C.V. Rao 44. A perusal of these documents would show that the terms and recitals of the GPAs signed by the respondents were specifically to authorize c.V.Rao, as the Managing Director oi tt. .pptllant/Image Developers, to deal with the property described in the GPA executed by N.Subash in his personal capacity' In other words' the authoritSr was granted to C.V.Rao in personam' In contrast' the terms and recitals of the GPAs signed by C.V. Rao show that the GPAs grynted authority to the appellant/ Image Developers (the sole plaintiff in O'S'Nos'2080' 2081'

77 2082 a::d 2iJtl3 oi 19971. It would be clear from the ternLs of the. GpAs signed by thr: rt:r;pondents that the GpAs were exe(ute,l in favour of C.V.Rao and 11 rl not vest any authority in the appellant/Image Developers. 45. The issu.r' es; to whether the GpAs executed by the clefendants were in favour of tht: l/Tanaging Director of the plaintiff (Image .)evelopers) or in an indiviclual r:,rpacit5r was duly framed by the Trial Co rrt. The Trial Court answerr:d ihe issue in favour of the responder, ts / r lsf6nfl2n15 [y holding thar 'he GPAs were execuled in favour of C \ . Rao in his individual ca.pi1ci1r, and that a contrary finding was not pc,ssible in view of the specifr,: ,,vor ding of the GpAs. 46. There ls .': material on record which wourd per:;uzrcre us to differ with the viev'tal<rrn by the Trial court. The Deeds ,rf canc.:llation of the GPAs dated ilo .t)7 -7997 reinforce this view as thr. sirid Deeds of Cancellation sF,er:i fically mention as under: "pp lterebg remoue and cancel all the potuer.s and authoities giuen by m,z tt Si C.Venkatesuar Rao............" 47. Further', tlre :overing letter dated 2o.r1.rgg7 senr to c.V.Rao with regard to can<:e llition of the GpAs shows that it u,as , rcldressed to

plaintiff (appellant/Image Developers) cancellation of the GPAs' 18 for the reasons stated I r had no locus to challenge the - C.V.RaoandthattheGPAswerespecificallygiventoC.V.Raobutnotto the aPPellant llmage DeveloPers' 48. We therefore find that the Trial Court correctly held that the 49. The issue whether the Trial Court could have decided on the merits of the case after it found that the appellant/ plaintiff (Image Developers) i did not have Iocus standi to file the Suits is answered against the I in the following appellant/Image DeveloPers paragraPh. 50. It is evident from appellant/Image issues including DeveloPe I the impugned common judgment that the t rs invited the Trial Cgurt to decide on the that the I GPAs were irrevocable on account of the interest created under the Development Agreements dated 24.11'1993' The appellant/Image Developers also sought for the consequential relief of injunction in the batch of Suits concerrun5 the DeveloPment r (b) of the Plaints' Agreements which would be evident from the p Further, during the PendencY of the the aPPellant/lfilage of status quo on the Developers also sought and obtained an order specific plea for restraining the respondents from interfering wlth the develoPment or sale of the suit schedule Prop rtiCS as Per the Suits e I I I I

19 Development {greements. It is therefore clear that the a;:pellant /.knage Developers tersr;rded the Trial Court to enter ir_rto the merits of the dispute and h.ncr cannot now turn around to argLre tlrat the Trial court was preclude<l fi om deciding appellant/ Inra 3e )revelopers. on the other.contentir;ns :aised by the 5 1 . Under crrcl: r . XIV Rure 2 of rhe code of crivir prc ce crure, l 90g (c.P.c), Suits; .',, rrving preliminary issue of jurisdrction or a bar under any law can br: <irtcided on the basis of the issue rarsc,l if I preliminary issue is framr:d ir-r -.his regard. Under Order XIV Rulc 2(12) ,r1 the C.p.C., a preliminary issue is limited to questions of jurisdiction of trre Court or a bar to the Srrit ,:reated by any law for the trme berng in force. Significantly, ttLe issue of locus stand.i of the appellant/ im:rgre Developers was not framr:d as a preliminary issue in the preser:.t brLtch of Suits and does not fall un,:ler any of the categories of Order XIV Rr.rle 2(21 of the C.P.C. A prelinrjnirry issue also cannot arise out of a cl sputed question of fact' It is settlr:rl that even an issue of bar under a s ,atu -e cannot be decided as a pr,_-lirrinary issue if it is a mixed queslion of I rw and fact: Mongia Reoltg & .Ett,,itduell (p) Ltd. u. Manik Sethij. t (2022) 11 SCC 5 zt2

20 52. Therefore, the appellant's contention that the Trial Couft was precluded from deciding the merits of the case after hol{ing against the appellant on the question of locus, is rejected' GPAs were couoled with interest and were. hencq Issue 1 (ii| - Whether the irrevocable ? 53. The plaintiffs case was that the GPAs were coupled with interest and were hence irrevocable. However, the respondents/defendants denied the same in the Written Statement wherein it was averred that I the GPAs were revocable as they were not couple-d. with any interest' The respondents/ defendants a'lso declared thati the "Development Agreements" executed between the respondents and the plaintiff were void due to failure of consideration and were sham and nominal documents since they were never acted upon 1by the parties' The respondents further the plaintiff/Image stated that the GPAs were not executed in favour of Developers for the PurPose of facilitating the Development Agreements' 54 ThemostrelevantdocumentinthisregardisaletterfromC.V.Rao to N.Subash dated 10'09' 1996 (Ex'B166 Appeals), which 1n 9PA I l I I speci{ically states the following: ".....Moreouer, the deuelopment ogreements are only nominol unregi.stered documents and the moneg transfer and retran'sfer I I

22 Kumar Kar2. Tr1e dictum in M. John Kotaiah u. A.Diuakar3, that- if the interest created is in the proceeds arising after the exercise of the power' then the agency cannot be said to be irrevocable' was followed by Delhi High Court in Rogal Orchi'd Associated Hotek-!'riuate Limited u' Kesho Lal Goyala. P. Venkata Raui Kishore u JMR Deuelopers Put Ltd's ' cited on behalf of the appellant llmage Developers' does not fit into the facts of the present GPA Appeals since no issue was framed in that case on whether the agency was coupled with interest' i 58. The finding of the Trial Court on this issue' ,namely' that the GPAs I executed by the defendants were not coupled with interest and cancellation of the GPAs was therefore valid' iegal and binding' hence I cannot be faulted either on facts or in law i 59. It is relevant to mention that the Trial Court relied on section 202 il of The Indian Contract AcI, 1872 as well as sections 2O3 - 206 of the I said Act to arrive on the aforesaid decisions' rl tht ttitl Court also r,l referred to several decisions in this regard to arrive at the view that the GPAs were not coupled with interest and were hence revocable' , AIR 2014 Cal 92 (FB) 3 (1984) 2 APLJ 74O 4 2O2O SCC Online Del 1708 s 2022 SCC Online TS 3387 ll L I Ir.Irl lt I il ,ill rl It il

a1 Issue 2 - Wlleuq! the Developme nt Asreements arc) void in view of failure of consideratior-r itnd are sham and nominal documents ? 60. The p,laintitTs in O.S.No. ll5 of 2006 (N. Surraslr and others) provided a tal-,rr?.r.ed statement in paragraph 'B of rhe plairrt to show the manner in u,hir:lt the money was routed to the responrlent s, accounts to create an impt'e,r;r;.on of consideration being paid brrt thal ro money was paid in actual fa:t by the plaintiffs in O.S.No .2082 o: matters. 'lh e, clefendants (M/s.Image Developers O.S.No.1 15 ,rf .2( 06 disputed the said contention Subash) in their r:spective Written Statements. of the piaintiffs (N. 61. LearneC li,:nior Counsel for the respondenrs ,plaintiffs in o.S.No.l15 cf 2[)o5 and defendants in o.S.No.2oB?, of 199,7 and batch) has made dcr_ailec submissions on the routing of funds b}, -he appellant No.2/C.V. Rao be.trveen December, 1994 _ January, lgg5 rvlrich included several circurti,rr; transactions through c.v. Rao's tnrste,l employees, Rajeshwar Ra. a.d Sanjay. By these transactions, O.,/. Rao first deposited the amolrnts into the accounts of the responctent; (N. Subash and family) b-rt r'rrk back the money immediately there after in order to create an illusrorr rf transfer of consideration under the l)evelopment Agreements. I 9'17 and batch anrl others) ln

24 62. We have carefully gone through the Chart submitted tr' y the respondents to demonstrate how the funds were circuitotlsly deposited in the respondents' accounts and then withdrawn by the appellants and we do not frnd any reason to disagree with the co.ntention ofthe respondents (N- Subash and family) that there was a total failure of consid6ration under the Development Agreements which rendered the said Development Agreements void under section 25 of The Indian Contract Act, 1872. 63. Section 25 of The Indian Contract Act, 1872 provides that an agreement without consideration is void '-t"lt""] the agreement is in i writing and registered or contains a promisP to compensate for .l something done or it is a promise to pay a debt barred bv limitation law' I Moreover, the first proviso to section 92 in The Indian Evidence Act' 1872 I would also be relevant in this context since it provides for invalidation of a document including for failure of consideration' I ! The "Round-TtiPP ins" done bv the appellant No.2 (C.V. Rao) and others 64.LearnedSeniorCounselfortherespondentshasgivena I painstaking account of the manner in which tnelfunas were routed by the appellant No.2/C.V. Rao and two others for;giving the impression that the aPPellants made PaYments to thei resPondents whereas the i

appellants, in rctual fact, withdrew each and every trJenry given to the respondents on tte very next day. 65 The st.ar e,rr t:nt below consists of a few instances of the recurring pattern of the t-it. sactions: (i) The appell:nt Nos.1 and 2 (lmage Developers aed C.V. Rao) deposited rn amount of Rs.1|,94,OOOI- uid.e 2 cheques dated 09.72.1\191 in the Andhra Bank account of the res,pondent No.2 (N.Vija1.zr l,rLkshmi). A sum of Rs.10,00,000/- was rv thclrawn from the ArLdhra Bank account on 20.12.7994 b.y Rrrjes.var Rao, who was an emnloyee of the appellant No.2/C.V Rac,. .ll Le withdrawal was elTectei by citing ,,accounting purposes,,. Tt e amount of Rs.IO,OC',0({)/- withdrawn on 20.12.1994 t,as ther eafter routed several t:me s to the accounts of other responclents to feign transfer of con:;irlr:::irtion. This would be evident from the fitct that after payment tr; the respondent No.2, the accounl ba lance of the appellan.. \r,.1 (Image Developers) -in the Ban1.: of Baroda was approx:LrLrLr r ly Rs.3O,OOO/- and payments to all other respondents were marle lr-om the Andhra Bank account of the appellant No. 1 (lmage D,:.,'e lopers) which had a balance of Rs | ,l )O I ., prior to the deposit o'Flr 10,O0,OO0/- from the respondent No.2,s tccount.

26 o (ii) Ort 24.t2.1994, trre respondent No 1 received an amount of Rs.11,95,O00/- in his Andhra Bank Accounl uide two cheques dated 09.12.1994 drawn on the Andhra Bank account of the appellant No'1' On 24'12'1994' an amount of Rs'1O'00'OO0/- was withdrawn from the bank account of the respondent No'1 by Sanjay, an employee of the appellant No'2 ' uide two separate cheques. The statement shows that the entire amount deposited in the respondent No.l,s account was fulry withdrawn uide two separate transactions including orr 24 '12 'l'994 and later routed back to the Andhra tsank account of the appellant No'l (Image Developers) The cash withdrawals ot 24'12,'1994 arrd 3O '12'1994 were also routed back to the Andhra Bank account of the appellant No.1 (Image Developers) after depositing the same in the personal Secured Overdraft (SOD) of the appellant No'2' (iil) ort 24.r2.rgg4, the respondent No.3 (N.Ravindra Kumar) received Rs.11,96,00O/- in his Andhra Bank account uide two cheques dated 09.12' 1 994' Onthat very day' an amount of Rs' 1O'OO'O0O/- was withdrawn by Sanjay' an employee of the appellant No'2/C'V' Rao, from the Andhra Bank account of lthe respondent No'3' Ther6fore, the entire amount deposited in lthe respondent No'3's Andhra Bank account was fully withdrawn ort 24.12.1994 and was t i I

27 later rc,lt':r:rl back to the Andhra Bank ac<:ou.t ol the appellant No. 1/ Ir-ragr Company. An amount of Rs.lt),OO l/ _. in the form of cash r.,r,as \iithdrawn on O5.O1.1995. (iv) On 2.+.12.1994, the respondent No.4 (B.Ratna Kumari) received Rs.4,i'2.O )('l - uid.e cheque dated 09.12.1 994. On i,,O.t2.t994, an amourlt ol Its.4,72,0OO/- was withdrawn in cash by Rajeswar Rao, who u, as :irr employee of the appellant No.2/C.V.ilao. using bearers cheque. F[,:nce, the entire amount deposited ;n trre respondent No.4's ac c:r,rrnt was fully withdrawn and was then partly routed back 1o ttrr: appellant No. l/lmage Developers and t:een deposited to the ar:<.orrnt of the appellant No.2. 66. The par,.icr_ lars given by the respondents of the ,,rcund tripping,, or, in other rvc rcts . the circuitous routing of funds from the appellants to the respondenrri and back to the appellants, wo rlcl lead to the inescapable withdrawn colliriusion that an amount of Rs.lt0, O t),000/_ was by tlre appellant No.2 and his emplo.rees by way of cheques/cash u L:r j transferred back to the accor.rnt of rhe appellant No.1/lmage I)e'e,lrpers out of the total funds of Rs 4O,57.COO/- claimed to be paid bv tlrr: rLppellant No. I /Image Developers to the rer;pondents as consideration

2a 67. Further, the balance amount of Rs.10,57,O0O/- was withdrawn in cash by the appellants. A sum of Rs.1,O0,0O0/- was withdrawn in cash from the Andhra Bank account of the respondent No'l on 28'12'1994 and a total amount of Rs.7,61,OOO/- was--withdrawn from the bank accounts of the respondent Nos.l, 2 and' 4 in between 30'12'1994 - 3l.l2.lgg4. The remaining amount of Rs'1,96,000/- was withdrawn from the bank account of the respondent No'31on O5'O1'1995' The StatementofSoDaccountoftheappellantNo.2maintainedwithAndhra Bank shows that an amount of Rs.5,oo,0oO/- in cash was deposited therein by Rajeswar Rao on 31.09.1994' The deposit slips are part of the t, record. The statement of SOD account of the resPondent No'2 shows that an amount of Rs.4,91,511/- was transferred to the account of the appellant No.1 on the same day' The appellant No'1/Image Developers has not shown any material to deny that the appellant withdrew Rs.30,OO,O0O/- from the respondents' accounts thlough the employees of C.V. Rao. There is also no pleading in defence of the respondents' argument of routing the funds in the manner stated above' It is settled I that no amount of evidence can be appreciated in the absence of pleadings: Bondar Singh u' Nihal Singh6 ' I I 68. Moreover, during cross-examination of the appellant No'2/C'V' I Rao in o.S.No.1 i5 of 2o06, the appellant No.2 admitted that Sanjay alld 6 (2003) 4 SCC 161

29 Rajeswar Rao u'ere employees of Image Chit Funds Ltct., a Comparry run by the familv nr,t'nbers of the appellant No.2. Howe ver, in the cross_ examination of (l "/. Rao in o.S.No.2o\2 ol 1997, c).v. Rao admitted that the signatu:-e s c n the reverse of the cheqrres rnacle b.; Sanjay and Rajeswar Rao *'t:r'r: indeed their signatures. Further, clrrrin g adjudication of o S.No.l l 5 :rf 2006, the appellant No.2, when corrfro.Lted with this testimony, rvas; ,rrable to give any satisfactory state me.t alrart from bare denials. 69. The T'rial lourt relied on the testimony of t he appellant No.2/C.V.Ra,: arrl the fact of there being a corlple[e .failure of consideratiorL u, ler the Development Agreements. co-rsidering the material placed ,;n record and the evidence given ty .he appellant No.2/c.V. R.o i'r the Suits of 1997 and 20o6, w- hc,ld that the Trial court came to the correct conclusion with regard to the Development Agreements bein1l r oid due to failure of consideration. 70. It was statecr in the praint rrled in o.S.No. I 15 .f 2i)06 that the Development Agr,.-':ments were nominal and sham and wer. never acted upon. This $'as rr,)untered by the defendants in the suit b1 way of bare denials and s,t:Lte c. that the Development Agreements rvere executed in 1993 and stamp rluty was also paid for each Developrnen, Agreement.

30 The defendant No.1/Image Developer also stated that registration of the Development Agreements was not compulsory in 1993' 7t The objective behind the execution of the Development Agreement would appear from the letter addressed by C'V' Rao to N'subash', dated to.os. tsso wherein, aS Stated above, C.V. Rao made a categorical statement that the Development Agreements were " nominal unregbtered documents" and the monetary transactions between the appellant No.1/Image Developers and N.Subash and his family members was only for accounting purposes since the latter did nort actually receive any consideration. The relevant extract of the letter has been set-out in the earlier section of the judgment Other reasons why the Development Aqreements are questionablq 72. Clause 1 of the Development Agreements clearly specifres that the development would be in accordance with Annexure-I thereto' However' I no such Annexure was produced by the parties ' Clause 4 of the I Development Agreements provide for consideration in future' The conduct of the respondents, however, as narrated above' shows that there was complete failure of any such future consideration' i 73. Contrary to Clause 2 of ttre Development Agreements' the building permits and sanctioned plans for construction on the Schedule A' and ,

11 'B' properties ri'e re obtained in the name of the lancl )\ rn,lrs and .not in the name of tec appellant No.1/lmage Developers. Thr: sa'ctions for the Schedule A' pr. rerty were obtained in the name of :hr: erstwhile rand owners prior to e'xecution of the Sale Deed-s.in lavour ,rf the parties. sanctions fcrr rh: Schedule 'B' propert5z, which rvere so rght after the execution of rr:spective registered sale Deecls, were greLnte.l in the name of c.v Rao rrrd ('lher land owners. Further, contrary to clause 2 of the Developmenl .\greement, the construction and excav,etiorr activities in the properties \{(re entirery at the personal expensc .f tlre landowners and no arrroltrrt s; were ever spent by the appellanl Ng.1/Image Developers. 'l-he r:spondents spent approximately Rs.61i,52,00O/_ for the construction a,:ttr i t5z as against Rs. 1,04,73,g2 1/_ spenr by the appellant No.2/C.V.Rao an,l his family members until stoppag,: of constmction owing to dispul.el; hetween the parties. 74. The appelle ,ts in the partition Appeal rety c n the Financial Statements cf tlLt appellant No.l/Image Deveropers tc cr,arm that the Company bore the cost of construction on the propt:rties. However, the Financial Rep.rts filed by the appellant No. 1/rmage treveropers in october-Decembe r, r996 for the Financial years r993-14. 1994-95 and, 1995-96 were afrt::. the disputes arose between the parties. Hence, these documents drl n.o I support the case sought to be rr acle out by the

appellants. Admittedly, construction in both the properties was slopped pursuant to the order of sfatus quo passed OS.No.2O82 of 1997 & batch, dated 25'11'1997 by the .Trial Court in the appellant No. l/Image Developers was -Jrot involved in any other project aside from the Schedule A' and 'B' properties' Despite the'same' the Financial Statement of the appellant No. 1/Image Developers continued to show purchase of material beyond 1997-98' I 75. Relevant documents in this regard are part of the Document Compilation and include the plan for Municipal approval for the Panjagutta (Schedule 'A' property) and for the Yellareddyguda (Schedule I 'B'property)' The documents include the building permission application submitted by C.V. Rao for the Schedule 'B' property and the Declaration d.aled 24.12.1992 issuecl in favour of C'V' Rao for the Schedule B' property. Building permissions for both the lschedule 'B' and A' properties dated 23.O4 1996 and 03'01 1992' respectively' show that the permissions were not in the name of Image DeveloPers but were in the name of C.V. Rao It is also admitted that 76. The doubtful nature of the aforesaid Financial Statements is also clear from,the fact that, in 1998-99' a steel purchase expenditure of I Rs.18,92,122/ - has been shown, which approximately amounts to 165 I tonnes of steel. The fact remains that no steel fwork whatsoever was

conducted in eit:re r Schedule 'A' property or Scheduk: 'B' pro':erty at this point of time. Tht: appellant No.2/C.V. Rao also sigtred on.lrehalf of the appellant No.1/lmage Developers as Managing Director zLltl-tt'ugh he was not appointed to th: said post on that date. 77. The Trial Clorrrt in the impugned judgment date<l 28.O3.2013 passed in O.S.lrlo . L5 of 20O6 found that the letter dztted 10.09.1996 (Ex.B166) was sig'rsd by C.V. Rao and an identical Inding v'as recorded by the Trial Cotut in the common judgment daLtccl 23 O2.2OOL in O.S.No.2082 of L99i' and batch with regard to the sarnc l3tte - 78. As staterl rll-'c ve, the letter records that as per the tLntle rstanding of the appellant l\o.2i, the Development Agreements are norniurLl and sham including for the fil,:t that they were not acted upon. 79. It is als;o re [:vant that C.V. Rao was shou'tt a:s I h e Managing Director of the appellant No. 1 /Image Developers in the I )evelopment : Agreement, where,ls C.V. Rao admittedly did not holcl thzLt position as on 24.11.1993. Tl-re Iiorms wherein C.V. Rao signed as Director as on 13.12.1993 and ll2.l2.1994 are part of records. (1.V. Rar> signed as 'Managing Director' on 26.05.1998 in Form No.8. The depor,ition/ cross- examination ol C '/ Rao on permits and sanctions not bt'ing in the name of the appellant \c.l/lmage Developers and the fact- thrrt C.V. Rao was

34 not the Managing Director of the appellant No. l-Company at the time of signing of the Development Agreement are on record- ' -:. C.C.C.A.No.72O of 2013 - "Partition Aopeal'j - 80. The Appeal arises out of the judgment passed by the XIII Additional Chief Judge (FTC), City Civil Court, Hyderabad, dated 2a.O3.2O13, in a Suit (O.S.No.115 of 2006) frled b51 N. Subash and others i against M/s. Image Developers Private Limited, C-V.Rao and others' 81. The plaintiffs (N. Subash and others) filed the Suit for. the following reliefs: (i) (i0 for partition and allotment of individual shares of plaintiff Nos' 1 to 4 amounting to 35.01% of the vacant lland as set out in the Scheduie A' of the property and for separate possession to the plaintiffs individually in accordance with their respective Sale Deeds as mentioned in the Plaint. I for a consequential direction to the defendant Nos l ar.d 2 for return of the 4 Sale Deeds in respect of the Schedule 'A' proper[r at Panjagutta. l I (iii) for partition of the Schedule 'B'property by metes ald bounds and specifically, the coliective share of the i plaintiffs amounting to I 47 .g5% of all the land and building set out in Schedule B' property and for allotment and separate Nos.1-3 collectivelY. session to the Plaintiff ,,]

(i") (") 35 [or ir:r.,ment of Rs.227,72,Og0/- together with inrer est Qj2 72% p.a., fo' tlr: period from 17.ll.2OO2 to 17.li.2t1OS towards mesne prol t s. br- ,t direction to the defendants ,lcc.ru nts of mesne profits. to rende- lnre and correct ("i) lbr I ,leclaration that the deed of hypothecatiorr rlated 23.05.199g t:x,:cr I !:d by the defendant No. I in favour of ck:fr.ndant No.g in respr:rr 6f Schedule ,B, property with buildinl.ls constructed therecl with leasehold rights, is not valid ar-rd Irot binding on plaint II Nos.1 to 3. (vii) f,tr :r lirection to defendants No. 1, 2 and g t. r,:( .rrn the 6 sale deecl; n respect of Schedule .B, propert.,r in favour of plaintiff llos I t,r 3. 42. The Trial ,lourt framed 26 issues primaril,l. with regard to the plaintiffs' entitlerr:nt for partition of the Schedule ,A, and ,J, properties; consequentia reli:f of injunction against the deft:ndernt \os_ 1 and 2 (Image DeveloFers and c.v. Rao); return of the 4 SzLlc .)eecls of the Schedule 'A' propt:ty; partition of the Schedule .8, prrper ty and for a direction on thr: rl:fendant Nos.1, 2 and g (Image l)eve lop<.rs, C.V. Rao and the AndhrzL l):.adesh State Financial Corporation L mit,:d) to return the 6 Sale Deecls irr respect of the Schedule 'B'property ro the plaintiff Nos.1 to 3. Tht: Trial Court also framed the issrte .vhether the Development 'r\greernents between the, plaintiff No. 1 (N. iiubrrsh) and the defendant No.2 (Ct.\,.Rao) were admissible and were acted rpon by the

36 parties thereto. lssue No' 18 was whether the Suit is maintainable without invoking the Arbitration Clause in the Development Agreements 83. The Trial Court recorded several findings including that the plaintiffs and the defendants intended to develop the property but executed the Development Agreements for avoiding Capital Gains Tax and that the defendants are trying to take advantage of these documents for effecting fraudulent transfers- The ,Trial Court concluded that considerationdidnotpassundertheDevelopmentAgreementsandthat the Development Agreements were hence proved to be sham documents' TheTrialCourtalsoconcludedthatthesuitpropertieswereleasedorrtto i third parties under the registered Sale Deeds and that mesne profits cannot be granted to the plaintiffs pending demarcation of the shares of the properties in question' I i 84. In essence, the Suit was partly a]lowed l by holding that the plaintiffs and the defendant Nos'2-6 and 9 are entitled to partition of the Schedule A' and 'B' properties according to the extFnt of the land covered under the respective SaIe Deeds and were also entitled for partition of the constructed area in the same ratio in the Schedulg 'B' property' The Trial Court also held that the plaintiffs were entitled for declaration that the Deed of Hypothecation dated 23'O5' 1998 executed, by the defendant No'1 in favour of the defendant No'8 is not valid' ,] l I I I ! I t

37 85. The undisprrted facts in the present Partition Apl;ea1 (CCCA.No.l20 of 2O13) are ttre same as those in CCCA.Nos.77, 80, fi 1 and 82 of 2OO2 (GPA Appeals t. 3oth the Appeals have common issucs, such as the nature of the [],: relopment Agreements i.e., whether thev are shaqn and nominal in r.a,,r rr : in view of failure of consideration. 86. The issues; in the present Partition Appeal arc as follcrws 1. Whel-her the Development Agreements dated 24.11.1993 were executerl br:trveen the appellants (lmage Develop<:rs Lnd C.V. Rao) and the rt:s 1;,rndents/ N.Subash and Family. (i) \J/ltet : er the Development Agreementsi w€,re ,:apable of convcyrng .itle to immovable property. (ii) ty1-rr:.1 ',.. the Development Agreements are voirl owing to failure ,r' consideration and are nominal and sham docum,:.r t s . (iii) \I/het.rer the appellants can rely orr th e l,.rbitration Claus;c ir, the Development Agreements especially ar a belated stage ol firral arguments in the present Appe al. 2. WhettLer tt r: respondents are entitled to mesne profits? 3. Whethel rcasonable costs should be imposed on the appellants in both, the Cil,A Appeals and the Partition Appeal. ,

38 Issue 1 (i) Whether the Development Aqreements were caoable of conveylnR title to immovable properW? 87. The statements made by the respondertts / plaintiffs in O.S.No.115 of .2006 were that the Development Agreements are neither enforceable nor admissible since the Development Agreements were nominal and unregistered documents. This was controverted by the defendant No. 1/lmage Developers in its Written Statement lwherein it was stated i that registration of the Development Agreements was not compulsory. I 88. We have considered the material documents in this context, namely, the Development Agreements executedl by N.Subash, Image Developers, the individual Sale Deeds i, fauou. of N.Subash and C.V.Rao, the sanctioned plans and the approvalsigiven by the MCH for both the Schedule A'and 'B'properties , 89. The cross-examination of C.V.Rao (DW-1) in,O.S.No.115 of 2006 as I well as in O.S.No.2082 of 1997 and batch is crucial in this regard since C.V.Rao deposed that the plaintiff in O.S.No.2O82 of 1997 and batch I (lmage Developers) acquired ownership rights of the property by virtue of the Development Agreements.

39 90. The Trlal (lr:rt framed three issues in this regarl. Isrsue No.l was whether the plrtit'r : ffs are entitled to partition and sepa:-ate possession of Schedule A' prort :rty as prayed for and for separate possr:ssion?; Issue No.3 on wht:ther the plaintiffs are entitled.Jo peLrtition and separate possession of 'B' schedule property; and Issue No.9 on whether the Development Agre e,ments between the plaintiff No.I anC dcfendant No.2 were acted upon and whether they are admissible. 91. The Trial (--crrrt found that both the parties create,d tlLe documents to avoid Caprte.l (.: ns Tax and that the Development Agrr:ements were not capable of -ri tnsferring title and hence cannol. bc trerrted as valid documents. 92. In this cc,rrirr;<t, lsra Fatima u. Bi.smilla BegumT and .It.,,uer Chand. u. Pukhraj Suranat r:lied upon by the appellants' do not assist their case. In the former decir;,.on, the erstwhile High Court of r\ndlrrzr pradesh held that when an .r\ilreement of Sale had _been admitted in evidence, admissibility rrf tl-Lt same cannot subsequently be disputed t;y raising the ground of inadt:<luate stamping. In the second case. thr: Supreme Court held that when tri'. hundies had been admitted in eviderLce, admissibility of the same cilr n,r - also be subsequently disputed by raisi.,,1 the ground ? 2006 (4) ALT :2 16 8 AIR 1961 SC t655,

40 of inadequate stamping. Section 54 of The Transfer of Propert5z Act, 1882 read with section 17 of The Registration Act, 1908 makes unregisterqC Development Agreements incapable of conveying any title. The decisions cited by the appellants involve Agreeme4ts of Sale which do not require registratron. 93. The pleadings, documents and the evidence/depositions indicate that an unregistered document cannot convey title to the immovable property and least of all, any possessory claim, nght, title or interest over the immovable property even if the Development Agreements are taken to be Agreements ol Sale. Hence, the Trial Court correctly found that the properties held by both the parties should be allowed to remain in the position since the plaintiffs/respondents I herein and the I defendants / appellants had ProPortionate shares in the properties according to their Sale Deeds. Issue 1(ii} - Whether the Development Agreements are void owins to failure of consideration and are nominal and sham documents ? 94. The relevant pleadings in this regard can be found in paragraph 8 !l of the plaint in O.S.No. 115 of 2006, which stat{ the manner in which il money was routed through the respondents' accounts to create an il impression of consideration being paid witho ir uI any money actually It i1 Lr ;ill ilIt I

4t having pass;e,1 )etween the appellants and the rr,5po,16"rr,". .- The discussion anrl a ralysis under this sub-head has already treen dealt with in the first llecti,n of this judgment - GpA Appezrls - an I is not being repeated in th:s s.ction 95. In Sarict., tlumar JabuaL u. Kushal Constructiot,.s', the issue was resolved on thr' 1r'rms of a compromise recorded by rr L.k Adalat and whether the cc'ml,romise can be stayed by filing of ir Sr-rit challenging the Award. The l{i1g.r court for the State of rerangana rrerd that a party cannot turn a"ound to question the non-registration ,tf a Development Agreement aft,:: traving executed the terms of c.omJrronris€. In the present case, h.'vever, the Development Agreements are unregistered documents uhLr'h 'vere incapable of conveying any right, tir.le or interest on the appellanr.: in the immovable properties. Apart lr tm failure of consideration, lhe Development Agreements were also nerrer acted upon. Naraganrao ,Io(tr t'tji Gowand-e public Trust u. stote of h|aharashtrato involved a DevelcJ,*ent Agreement entered into betwee;r th,e land owner and the GovernmerLt which vested certain benefrts on the la rd owner. In the facts of tLrat <:rLse, the land owner had availed ol'the be,efit and had hence acted rLporL the Development Agreement. In the 1tres,:nt case, the Development A1;r.,''ns615 were never acted upon inr:rsding for taiiure of s C.R.P.No.763 of 2t))O, dated_ 26.06.2020 to (2016!. 4 SCC 44:i

42 consideration where every penny paid by the appellants as consideration was taken back at the behest of the appellant No.2/C.V'.Rao' The Trial Court has given a specific frnding that there indeed was a total failure of consideration. The appellants have also relied on chairman, state Bank of India u. M.J. Jamesl l on acquiescence which does not have any application in the facts of the present case. Issue 1 {iii} - Whether the aooellants can relv on the Arbitration Clause in the Development Aqreements especiallv at a belated stase of fina,l I i The Trial Court found that the partition Sui! was maintainable and 'l I partly allowed the suit by holding that the plaintiffs were entitled to I mandatory injunction and directed the defendant Nos' 1 and 2 to restrain i the original Sale Deeds in respect of the Schedule '$'and 'B'properties' I 97. The conduct of the appellants/defendants during the course of the trial of the Suit (O.S.No. 1 15 of 2O06) as well as the earlier Suits in O.S.No.2082 of 1997 and batch makes it clear that the arguments in the present APpeal? 96 appellants/defendants waived their right to be referred to arbitration' The appellants failed to take any steps under section 8 of The Arbitration andConciliationAct,lgg6('the1996Act')tohavlthepartiesreferredto I I l1 (20221 2 SCC 301 , i I i I I I

43 arbitration a,.c t le reliance on the Arbitration clause at ,-he hnal stage adjudication irL')t)24 is vexatious, to say the least. 98. In any evert, the Trial Court found that the p,arties ,,r ere entitled to seek partition a rd separate possession of 'the Sch,:dule A, Td .8, prciperties u.der -heir separate and individual ritle Deeds e nd settled the issue that the Suit frled by the respondents was marnta nat,le. 99. ln Booze 4-lt.en Hamilton vs. sBI Home Finance Ltrl-.'2 the Supreme Court consirlerr:d the position on hling of a suit by a party to an arbitration agr.enrent against the other parties ancl helrl thrrt the scheme of rhe Arbitratior and conciliation Act, 1996 and section g thereunder clearly indiczrtr: tlrat the application for reference to irrbi r ration under section 8 sho,l<l be made at the earliest and a pa:t). ,,vho willingly participates in thr: Suit cannot subsequently turn aro.nd and say that the parties shc.lc. be referred to arbitration . Booz Al1,:n (r.;upra) placed emphasis on thL. c.nduct of a party where the conduct woulcl amount to waiver of the p,211y''5 right to seek reference to arbitra.li ort rn sukanya Holdings (P) ],ttl. \r.s. Jagesh H. pandgotz, the Supreme Co,rrt held that the parties n,3ed r rllt be referred to arbitration wherre no r,:ference was sought prior t. fiting of the first statement on the substance of the dispute. A s'irLglc Bench of the carcutta High cc urt in Lindsag t2 {20771 5 SCC] 53il 13 (2003) 5 SCrl 531

44 Intematbnal Priuate Ltmited Vs' Laxmi Nituos Mittalr+ placed emphasis on the conduct of the defendants in relying on the arbitration clause after the parties had participated in a protracted litigation in Court' 100. trn any event' the fact of the GPA Appeals and the Partition Appeal taken together would show that the appellants waived their right to have the lrb in the Partition Appeal referred to arbitration rn vrew of the appellant No' 1/lmage Developers {iling O'S'No' 2082 ol 1997 and batch praying for relief with regard to the very same Dqvelopment Agreements containing the arbitration clause' i i 101. The parties have indeed been locked in a prf,tracted litigation from 1997 for 27 yearsand have undergone fufl-fledged trials in different Courts The appellants have however raised the issue of arbitration only at the state of hnal arguments in the present Appeal' I 102. In Rajasthan State lndustial DeueloP'ment " ':*",t:"' Corporation u' Dttmond & Gem Deuelopment Corporatton 'O" t:':1 "" by the appellants does not apply to ttre nresefrt case since in that decision the Supreme Court held that a writ cor1ld not have been frled where an ahernative remedy of arbitration and t statutory appeal was available to the petltioner' In the present case' thE appellants did not frle t t I I ,o ,OrO SCC Online Cai 1 rs (f,013) 5 Scc 47O 658

45 any referen.e .,rder section 8 of the 1996 Act and herce waived the remedy of arbitrz lion 103 The abc,r't: t:ircumstances persuade us to hold that the appellants cannot nor,r, r: se the bogey of arbitration or argue that th,: Suit was not maintainable ;. view of the arbitration clause rn the Development Agreements 1o4. The issue raised with regard to the examinat:ron ,f tlre signature of C.V. Rao (D.V/ 1' on Ex.A174 i.e., the letter dated tO.O!.r.1996, under section 73 of rh': Indian Evidence Act, rB72 ]nas been e xamined with regard to thr: riocr.rment in question as well as the lau.. ()ur view is as follows: 105. Insofar z,s the judgment dated 2a.o3.2or3 in o.fi.No.115 of 20o6, which has lerl t, r he Partition Appeal is concerned, we aav(r already held that the Devel,rprrent Agreements were sham and nornrnel documents. The Tria,l c.urt gave ' a specific finding that there was a failure of consideratior: u nder the Development Agreemer:ts anr1 the entire transaction r,rra s only for accounting purposes, which v.,as supported by C.V. Rao's lt:t't.er being Ex.Al74. The conclusio's in tJre impugned judgment in t}-re Partition Appeal indicate that tne Deveropment Other relevant_i,rxx-les

46 Agreements being adjudged as sham and nominal documents was an independent hnding and not dependant on the signature. of C.V. Rao on Ex.Al7 4 or the veracity of the document. 1O6. Admittedly, the signature of C.V. Rao on the said documept was compared and tested with his admitted signatures on record in accordance with the requirement under sectiot 73 of The Indian I Evidence Act, t872. The Trial Court placed the burden on C'V' Rao to prove that the signature on trx.Al74 /letter dated; 1O'O9' 1996 only after holding that the Development Agreements were sham and nominal I documents, and only thereafter proceeded to corppare the slgnature of l C.V. Rao with the admitted signatures of C.V. Rao which were on record' lO7. Thiruuengadam Pitlai u. Nauaneethammauf rclied upon by the I appellants considered the comparison of a disputed thumb impression under section 73 of the Indian Evidence Act, 1872, where the Court specifically found that the thumb impression was smudged and vague and that the eourt should hence not speculate by lcasuaf perusal. In the present case, however, the Trial Court compareq the signature of C'V' Rao with several other admitted signatures wh'ich were on record' The comparison- was also made at the request of, cournsel appearing for the I parties. ro 12008) 4 SCC 530

47 S. Siuadas t'. .St,tt,z of Kerala)7 involved a criminal rrial $rh, rre it was held that the concerr.cd Trial Court had compared signature s in a casual manner and ro1 given any opportunity to the accused to I ebut the Trial Court's conr:lusions. The detailed trial which was undertaken in the present case i nr,'c lved a different standard of proof anc evi lence was led at the reque:;t 01 ,)sunsel appearing for the parties. 'fhe Triz I Court in fact reached the stutrt: conclusion with regard to C.V.Rao's sigr Lature in both the Suits i.e., r).S.No.2OSO of 1997 and batch and O.S.lrlo 115 of 2O06. 108. Therefrtre. Ive do not have any doubt tl-rat the letter dated 10.09.1996 (li-x.,\174) was indeed written by ,1.V. Itr.o '(D.W.1 in O.S.No.115 of !l{)06) and unequivocally stated that the Development Agreements 'wr:rr: only nominal documents for accounting purposes and the plaintiffs r n .he Suit (N. Subash and others) dic nc t receive any consideratiorr tlnc er the said Agreements. lO9. Bharat I,etrileum Corporotion Ltd. u. N.R. Vo.irar,tanit9 considered the general 1>ropc sition that one additional fact mav L,e sr rfficient for a judicial prececlen, to become inapplicable to tht: facts of the case. Vidhgodhar L'. .\/Ie kraole was cited for the propositron that if a party to a Suit does no: .1pFear in the witness box, a presurnptic,n n.ay be drawn t7 2023 LiveLaw (Ke - 57 18 2004 (8) SCC :;79 ts (79991 3 SCC I;-73

48 that the case set up by the party is not correct' In the present case' N.Subash as D.W.l duly entered the witness box and gave a detailed deposition on all the applicable facts in the four Suits underlying the GPA Appeals which involved identical isgues and commonality of evidence. N.Subash/D.W. 1 was also cross-examined by the appeilants' Hence, Vidhyadhar lsupra) does not have any application to the facts of the present case. Issue 2 - Whether the res ndents are entitled to mesne rofits? 110. We disagree with the appeilants' contentiol that the plaintiffs are not entitled to mesne prohts since the plarntiffl (respondents herein) claimed to be in joint Possesslon' 5of 111. A bare perusal of the Suit filed by the respondents (O'S'No 11 t 2OO6) shows that the plaintiffs have calculated and paid Court fees under sectio t 24(al of The Andhra Pradesh 'Court-fees and Suits Valuation Act, 1956 (1956 Act) for the relief of t"f" ot Sale Deeds and I the consequential relief of recovery of possession'of the Schedule A' and I 'B' properties. Section 24(al ol the 1956 Act stipulates that where the prayer is for a declaration and possession of tfteintoRt'ty to which the declaration relates, the fee shall be computed on the market value of the I I movable ProPertY or 3/4th of the market value of the immovable property I : l I I t

49 or on Rs.30O/- ir'hichever is higher. The respondents .iled O.S.No.115 of 2006 on the ex6:tr:ss premise that the respondents had ber.n ousted from the possession ol the Schedule 'A'and .El,properties and ilr cordingly paid the Court fee necessary to claim recgvery of por;session. The respondents / pl zLi ntiffs therefore rightly claimed m.sne profits along with recovery of pro55,- ;5ior. 112. Sectioe '.).'' '.21 of The Code of Civil procedure, 1c)C,8 defines the expression " mes,r'.,t profits" meaning those profits which the person in wrongful possessionrof such property actually receivecl ,rr might with ordinary diltf,r:nce have received therefrom, together u,ith interest on such profits Tre profits would exclude those due fr,rn_. rmprovements made by the perscrn who was in wrongful possession. ()rdcr XX Rule 12 of the c.P.c eml owers the court to pass a decree for ;rossession and mesne profils rvh.ere a Suit is frled for recovery of Possession of immovable propc.tty and for mesne profits. I13. The appr:llarLts have discounted the evidence which was recorded with regard tt nt,",;ne profits at the hearing of the Srrit r. corrtending that the issue of mesr',: profits should be relegated to furt.-rcr evidence and enquiry. We fir.rl that the evidence includes crosrl_e xif mination of C.V.Rao admitlirrll to the use of Schedule ,E}, propert ", for. commercial renting in the ex <:lusion of the respondents and phrrtogr-aphs of the

50 Schedule 'B' property establishing the use of the suit propegQr for commercial renting as admitted by c.v. Rao. The evidence also includes certified copies of Lease Deeds showing rental income from similar properties in the same area which was-.- also proved by witness testimonies and detailed computation of mesne profrts wherein - rental value of the Schedule ,B,property was calculated in a reasonable manner accounting for the respective shares of the land owners in separate floors l and parts of the building on the Schedule 'B' property' i 114. Therefore, we are of the view that the respondents' entitlement to I mesne profits was duly established. We may alsq add that any delay in I payment of mesne profrts would be to the appellapts' distinct advantage I which the Trial Court faited to take into account. I We, accordingly, hold that the respondents in the Partition Appeal i'e', plaintiffs in O'S No'115 of 2Ci06 are entitled to mesne profits and that the Tria'l Court erred in holding to the contrary in the impugned judgment' I sonable costs should be imposed on the apoellants Issue3-Whqtherrea in both. the GPA Appeals and the Partition ApPeal? 1 15. This issue pertains to both the GPA as well as the Partition Appeals. il ii I t I

51 1 16. Learn,:i S;r .ior counsel appearing for the resporcre.Lts in both the GPA Appeals ar.rl the Partition Appeal has placed a r:omprehensive sequence of eirr,'nts including a collation of docket orders ,rassed by co- ordinate Bencles and a record of the proceedings in thr: Appeals. 117. In surnrn.ul,, the sequence shows that the judlgme rt and decree impugned in tr-r-' )artition Appeal (c.c.c.A.No. t2o af 2c 1 3) was passed in favour of th<: resrp,rndents on 28.O3.2013. The partitio. Appeal was filed on 1 1 .o9.20 I l'i. l. co-ordinate Bench of this court peLsse I an ex parte interim order irr the Partition Appeal on 06. 11.iro1:, suspending the impugned judgrrLt nt. The respondents filed a Vacate petrti,tn along with cross-objectio n -c r)n r2-1r.2or3. The partition AppeeLl w,ls adjourned thereafter and tirgred with the GpA Appeals on 04.1,.2.2C13. 118. The GI)A Alrpeals as well as the partition ApPears rv< re adjourned from 09.12.20' 3 o 06.12.2023 i.e., for the next ten yeilrs ,)n the prayer for adjournrrrc'-rt s made on behaif of the appella.ts. -rrre appellants sought more thar fifteen adjournments in this period. .I1re appellants have not disptrl.r rl the sequence of events. The pr-oce::ding sheets recording the :rrl j. r,rrnments are in any event part of the records. The appellants in f:rr', sought for an adjournment even on 26,(,3.2024 alter the matters vzerr. rlaced before the Hon,ble The Chief Justice for listing before an apr)ronriate Bench on 3r.or.2o24. The Appears were fina y

JZ heard on 25.06.2024. Therefore, hearing of the present batch of Appeals has been delayed for over two decades 1 19. In Ramrameshtlari Deui u. Nirmalo Deui2o, the Supreme Court observed that once an ad-interim injunction is granted' the plaintiff or thb petitioner is likely to . make effort to ensure that the injunction continues indefrnitely. The Supreme Court thus expressed its concern over dilatory tactics employed after a party obtains an interim order of : injunction and held that heary costs should be imposed for unnecessary I adjournments. India2t 2006 4 Again in Salem Aduocate Bar Association u- Uninn of SCC 44, the SuPreme the conduct of unscrupulous parties taking advantage of costs not being awarded in appropriate cases 12O. In the present case, the hearing of the Appeals has been delayed for twenty-two years (or for ten years, at best) i'el' from the time of the I appellants' obtaining interim suspension of the impugned order in November,2013. It is all the more significant that the appellants have I Court , noted I enjoyed interim protection for eleven years inf the I without any such protection in the GPA App;als respondents have suffered the effect and conseqrrences of the interim order in both the GPA Appeals and the Partition Appeal by reason of the zo (2Otr ) 8 SCC 249 ,' (2005) 6 SCC 344 Partition APPeal Therefore, the II

53 order dated (;1--1')..2or3, whereby the co-ordinate B.nc.h directed that the GPA Appeals; should be tagged with the partition Aprpea[. 121' This c)ourt .s hence of the view that this is . fit cas: for award of reasonable (:os1 ri 10 be paid by the appellants in both tl-re GpA Appeals and the Partitro, r\ppeal to the respondents. The quantum of costs is on account of thc r i n clisputed delay in hearing of the two s,:ts < ,f app6a1" ,116 the effect of th,: :;rrme suffered by the respondents. Conclusion: 722. In the r:onrmon judgment d.ated 23.O2.2O()l in ().S.Nos.20g0, 2081,2082 rLnd :()83 of 7997, which is impugned in rhe ilpA Appeals, the Trial court hcrd that the appellant/Image Develope rs croes not have locus to quesitiorr r he validity of the cancellation of th: said GpAs and cannot mainta;n ;he Suits for declaration and consequential perpetual injunction. Thr: 'f:lal Court further held that the GpAs .."\.er( ,,ot coupled with interest ani zrre revocable and that. the Developntenl Agreements are nominal docrrnrents and were not acted upon by the oarties. 123. In view ol t)-r: analysis and discussion in the foregoinSr paragraphs of this judgrne n -. this court holds that the Trial c.rrrt came to unimpeachable cor clusions which would not justi$r any rnter ference.

54 124. Insofar as the judgment dated 28.O3.2013 in O.S.No. 115, of 2006 (impugned in the Partition Appeal) is concerned, the Trial Court decreed the Suit in part holding that the plaintiffs and the defendant Nos.2-6 and 9 are entitled for partition of the Schedule 'A'-and 'B'properties according to the extent of land covered under their respective Sale Deeds'and for partition of the constructed area in the same ratio in the Schedule 'B' property. The Trial Court granted injunction inrfavour of the plaintiffs directing the defendant Nos.1 and 2 to return th original Sale Deeds of e ti the plaintiffs in respect of the Schedule A' and fl' properties The Trial Court however declined the plaintiffs' prayer for mesne profits. lr 125. We are inclined to sustain the impugned judgment passed by the Trial Court in O.S.No.115 of 2006 to the extent of the conclusions arrived I at by the Trial Court save and except the issue o{ mesne profits. We are lr inclined to hold that the plaintiffs (respondents i1 the Partition Appeal) are entitled to mesne profits as prayed for in the $uit. , lt 126. CCCA.Nos.77, 80, 81 and 82 of 2OO2 and,CCCA.No.l2O of 2OL3 llt are accordingly dismissed save and except the lfinding with regard to 'lll mesne profits It is made clear that the respon I of 2Ol3 are entitled to mesne profits. The appe Appeals and the (Rupees Ten Lakh Partition Appeal shall pay s Only) to the respondents dents in C.C.C.A.No. 120 t: lr Ilants in both the GPA icosts of Rs.lO,O0,0O0/- I n four weeks from the t \ I I t

55 date of this j -rdrJrent. The payment shall be mede ihro:gh acceptable means inchrd ng bv Cheque or through RTGS. 127 I.A.N..( rt 2o13 (XOBJ No.13988 of 2o1rJ) i, cilcA.No.12o of 2013 is clis;pr>scc of in view of the judgment rr:ndcred by us in the Appeals. Interirn or j ers shall stand vacated and pend ing Miscellaneous Applications s.'r:tll stand closed. SD/-K.SRINIVASA RAO .,OINIT REGISTRAR I\ l //TRUE COPYII IJECTION OFF]CER To 1. The First Sierrior ,livil Judge, City Civil Cou( Hyderabad 2. The Xlll Addl C;trief Judge, City Civil Courts Hyderabad 3. One CC to tVIi s l]nnam Law Firm, Advocate (OPUCI dOnu CC to S'i/ P Hemachandra Advocate [OPUC] 5. One CC to S-i i q Achuthanand Advocate IOPUC] 6. Two CD Cop e,; AA,/PSL In the above batc,h :f ,\ppeals, Costs of Rs.10,00,000/- (Ten Lakhs), the Appellants Paid to the Respr: n J :nts, as per the directions of the Hon'ble High Court in Judgment dated l0 01 :>-025, in the above batch of appeals Vide Crrst Memo USR No 26991/2025. Yt-

4 I f4 Er \ .r _*il.:,r ' .-i'

HIGH COUF:I- DATED: lctlt:)1t2025 .. i it- i rr.I .i € a^ ( i_ APN Ni: - -,t. -".'t .1'_,\' .,_- ;' COMMON .,lt,I](3El\/ENT CCCA.Nos.T;2, 80, B1 & g2 of 2OO2 And l.A.No.6 of ,2013 (XOBJ No13988 of 2013j lN / AND CCO,^. No 120 Of 2013 DISMISSINC} ,\L I- THE APPEALS, EXCEPT THE MESNE: [)F'CFITS tN CCCA No: 1ZO OF 2013, AND lA.NO.€i tff: 2013, (X_OBJ NO139g8 Of= ZOfSi lN CCCA NC, '12 -t OF 2013 tS D|SPOSED OFF WITH COSTIS ."1*b g jF.,w \o\ \

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD FRIDAY THE TENTH DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE JUSTICE MOUSHUMI BHATTACHARYA THE HONOURABLE SMT JUSTICE M.G.PRIYADARSINI crTY crvlL couRT APPEAL NOS: 77 80 81 &82 oF 2002 AND l.A.No.6 of 2013 (xoBJ No..13988 of 2013) cccA.No.12O ot 2013 ctw clvlL coURT APPEAL NO:77 ol 2002 Between: ...PLAINTIFF/APPELLANT AND CITY CIVIL COURT APPEAL NO: 80 of 2002 Between: t\//s lmaqe Developers P!,1. Ltd. rep by its, chairman and Managing Director 6:."vilHti,;r'-hio,slo VEni'ii'.i'i'"w9 ?99d .about 44 vears' occ Ei;Ji"ijii, ru" Frot rlo-i+n, Road No-2 Jubilee Hills, Hvderabad' N-Ravindra Kumar, S/o N.M. Choudhary,.aged 36 years, occ. Business, R/o Hi"i r.iii.ign, Road'No.14, Jubilee Hills, Hvderabad ...DEFENDANT/RESPONDENT Regular Appeal under Section 96 of C P-C against the Judgment and Decree dated23.02.200lmadelno.s.r.ro.zoeeof,lggTonth.fileoftheCourtoftheFirst Senior Civil Judge, City Civil Court Hyderabad' M/s lmaqe Developers Pvt. Ltd. rep by its, chairm,an and Managing Dire^ctor 3::venffi;;o"-"nio,sro V'ni'li"'i.r'via ?99d .about 44 vears' occ' ;G;#,ffi Pl"t r.ior'+n, noia ruo z Jubilee Hills' Hvderabad' ...PLAINTIFF/APPELLANT IN/AND

-7 AND N. Vijayal;rks;l rni, W/o N.M. Choudhary, aged about . y€ars, Occ. Housewife, R/o Plot No 'lt) 1, Road No..l4, Jubilee Hills, Hyderab,ad ... RESPON DENT/ DEFENDANT Regular A[ p,: ]l under Section g6 of C.p.C against _re Jrtdgnrent and Decree dated 23.02_20,11 nrir,le in O.S.No.20B.l of 1997 on the file of lhe (.:ourt of the First Senior Civil Judge, rl ty Civil Court Hyderabad. ctw ctvtl co UF'J_,lPPEAL NO: 1of2O02 Between: M/s lmage Dr: r,:lopers pvt. Ltd. rep by its, Chairman anrl M;rnaging Director C..Venkate:;wz ra Rao,S/o Venkatramayya aged aborrt 4,4 years, Occ. Business Fl/c )lot No.144, Road No.2 Jubilee Hills, l_lyde.abad. ... PLAI I,ITIFF/APPELLANT AND 8 1. B. Ratnakurrrar , (Died per LR, Respondent No 2). 2. N. Ravindra K_r rrar, S/o, N.M.Choudary, Aged about 62 years, Ccc_ Business, R/o. Plot Nc .1tl I Road No.14, Jubilee Hills, HyderabaC (Respondent No 2 s t rouo.lt _o1 lecord as per LR of deceased Sole :lespondent as per court order rrareri )7'06.2023 vioe rn.rrro r oi iilzs in ccce No.r31 of 2002) Regurar App:err ,nder section g6 0f c.p.c against the Jucgme,nt and Decree dated 23.02.2001 nrade in o.s.No.20'0 0f 19g7 0n the fire of thr-, co.rrt of the First Senior Civil Judgr:, r)i1 Civil Court Hyderabad. ...DEFENDAI{T/R ESPONDENT

Between: lmage Developers Pvt' Ltd' rep by its' chairman and Managing Director C..VenkateswaraRao,S/oVenkatramayyaagedabout44years'Occ' Business, R/o PIot No'14A, Road No 2 Jubilee Hills' Hyderabad' ...PLAINTIFF/APPELLANT AND N. Subash, S/o. N.M.Choudary, Aged about 39 years, occ. Business, R7o. Plot No.'198, Road No'14, Jubilee Hills' Hyderabad' ...DEFENDANT/RESPONDENT CITY clvlL cOURT APPEAL NO:.82ot 2002 CITY CtvlL coURT APPEAL NO: 120 of 2O13 Between: 1 M/s. lmage Deve-lopers Pvt'Ltd " R9P-" bu its Managing Dreictor' "n iilc vL "ii" t-u -^ *I i, :,;: j#'f, ru: ';la "i33:o : 3 r U's' 30 cc B u s i n es s' R/o.Plot No..14-A, Ro ' E Yilffi l,'"-i '.if a? ":'ft " :i yf{l[1'fi1,l]3lii,;#33"1' It"d 3'T B u s i ness 3 C.Seshartnamma (Died)' - ; [[ ;E*;i1'S t ;i, -.j:. iitlll' 3 I ;li"}ofi n3: i',,1Tts."11 Nt'd 333 Ag ri cu rtu re ,ff .'ffi ["A,T,t?"t""1i-o,*J;['i:'i:iifl l*iYft gfifJ:'x"t3b353 o rr/'ls I m a s e F i n a n ce ?t *i',; : *:'r?',, lE y-% r! "Y"|'li"l?'-Xl [lff ft ;t'! : C Venkatramaiah' ageo ;;;#iiiii;' HvJerabao - 5oo 033 'S:f ,S**iiH,:?'ifr K;',i:^:*X"":-ft ::il3lab"E3oti'AY?'o'f:Bbt;f"*"' Regular Appeal under Section 96 of C P'C against the Judgment and Decree daled 23.02.2001 made in O'S No'2082 of 1997 on the file of the Court of the First Senior Civil Judge, City Civil Court Hyderabad' AND ...APPELLANTS/ DEFENDANTS

I"',ill " i 5 i, ={3, } ffi "L1 11?" jgifl t'r".t,.if , ]': Ti ;r Biif B u s i n es s R/o 2. Smt.N.\/ij;:rya :rkshmi. Occ:Hous:l c lJ R/o 500 033, ,U # 8i:J',iy, olli i 3,, ..' ?il lij,lr,o ",.,"o?T1 H,X'Jilii:'"^ i;],l h:1". ffJ,?i jXgfi# ffi B:,f,r.""T,i:;,:i,ib ?3:, Business, B.Ratna K-rrnari..(Died per LR, Respondent No 3/ platrrtiff lrlo 3, Vide Court urder d:rte d r)t 06 2023, n.ru".i'"t 5dz5ilia"cilil:.1 or rir002) ' li::B sf il:l lf !x? rj f:yr :n-eq .; -:::::::'::,T:::::':: Main Road n,,.,"rr,JrrofiJ, tmage Trade Centre, yet,arei oV t,;l'ijJ, ir;Jrput, 6 Ilg4nari'r.[)adesh state Financiar corporation rr.i Fo^ r.,,,]^ i,^--. oirectbil ci:iilr r'il'rrn", Abids, Hyderao;o ooln Ltd . F ep. rry rts Managing (R- 5 and 6 a rrr not necessary parties in this petition) Regurar F,pr e2 Lrn(s1 section nu , . o .*runl;:Hlff.T::)::]:: dated 28.03'2013 naJe in o.s.No-1'15 0f 2006 0n the fire of the ccurt of the X, Addl Chief Judge,, {.)ity rlivil Courts Hyderabad. 1 Wo. Plot No J 4 l.A. NO:6 oF 2013 BJ. N 0.J) o: 13988 0F 2013) rN cccA. 00F2 013 NO.lrl Between: 1 |"i,iiili 5, ?{ i, }' ffi "i.l llil" j,gifl fffit..:3, J: ffi a Ef5,3 u s in ess R/o FrT,H"]Jl?fl n,,{,fl ,,",#,,i;,,U#FH.,iy,,olyi8,,"",,liiijnl,,o","";T1 H,XiI[f ift ,^ I I 5l; I - 31"; ilJ,? i 313 fi# flfi s:,fft".%?:,,":i3a tl 33 B u s i n e s s, B,X SllXllll;: ll I [l EB L: il ft fi:i i p,? T'sttx.,.tJJ1, ?,T! il,",, 3, V d e c o u ^ 4 ...CROSS OBJECTORSi/PLAINTFFS

AND 1 Iril/s. lmaqe Developers Pvt.Ltd.,, Rep by its- Managing -Dreictor' iiiilc.v!rlY"-.*"o nio, sro. v"liili,"*'Ln, isea . 59- y':'^ :t" Business' iii""p[i'N;.1.i-f,-noaa ivo z-, Lroir"" uittt, Hvderabad- 500 033' c.Venkateswara Rao, S/o. sri venkatramaiah, aged !8 y1s. ^o^c1c: Business H,;. pffi'N;.;;--n noao ruo. i, i,uiiLd nills, Hvdeiabad - 500 033 2 3. C.Seshartnamma (Died), - 4. K.pattabhiramaiah, s/o. K.Anjaiah, hindu,.aged aboulT2 YF^ 999 Agriculture R/o. Plot No. 14-A, n"io'uf i, l'jbitee nittslnvoerabad - 500 033 5. K.R.V.R.Mohan Rao, S/o' K Pattabhiramaiah' aoed about 46 yrs' occ Asriculture R/o. Plot l'i"'"i;-A: il";Jlr6"2' lJuie" fiills' Hvderabad - s00 033 uU';;,Iffi P"".5i:f, :fi "5tr'i',d:"i:"11I':"yJ;:':"Y"n*'l?:xli?"ff ful',: luOGe Hitts' HYderabad - 500 033 7. Kum, Chalasani Soumva' D/o C Venkate5v7312 Rao Aoed about 23 years' occ - student, nro proi'rio T+InlR;J N; '' J'bilee Hills; Hvd-500 033' ....RESPONDENTS/ DEFENDANTS 8. lssac Christopher, S/o-not known' =lged not known- Occ: not known O/o' Pr' No. 8-3-943 ano g+s 7 FIi,'ffi;; i'";; Centre' vettareddv Guda' Ameerpet' Main Road, Hyderabad l6 9. The Andhra Pradesh State Financial Corporation Ltd " Rep by its Managing " Oii!"mr Cf,irag Ali Lane' Abids' Hyderabad'001 (Respondents 8 & 9 are not necessary parties to this Memorandum of Cross Objections) Regular Appeals under Section 96 of C'P'C and Memorandum of Cross objectionsfiledonbehalfofCrossobjectors/Plaintiffslto4Underorder4l,Rule 22 oI the Civil Procedure Code' 1908' against the Judgment and Decree dated zL.o3.zolSmadeino.S.No.ll5of2006onthefileoftheCourtoftheXlllAddlChief Judge (FTC), City Civil Court at Hyderabad' Common Judgment and Decrees dated 23.02.2001made in O'S Nos'2083'208'1'2080 and 2082 of 1997 on the file of the First Senior Civil Judge, City Civil Court' Hyderabad' Regular Appeals and Cross Obiections coming on for hearing and upon perusing the grounds of appeals and Cross Objections the Judgment and Decree of

the Lower Cou 1 arguments of Ll/rj Nos.77,80,818, 82 of 20O2, and for appellants for the App:.,llants in CCCA.t,lo,120 ilrd the material papers in the case arrd Upon hearing the Unnam Law Firm, Advocate in CCCA of 2013 sri/P Hemachzrn.rra lrdvocate, and on beharf of the Respondents rn a, the appears & lA No. 6 of 2J'i\, XOBJ.No..t39BB of R.A.Achuthanancl, r\ ivocate. 2013 in CCCA trlo l:20 of 2013),Sri This Court doth l)rcler and Decree as follows: That the critl'z 1;1r;1 court Appear Nos. 77,80,81 & 82 f 2i.)02 be and are hereby disrnissed, confirming the common Judgment and decrees dated 23.02.2001 ol, .e First Senior Civil Judge, City Civil Coun, Hyrierabad ln O.S. No 20B3 ,rf rg97, O.S.No.20B1 of 1997, O.S.No.20B0 of 1997 and O.S.No.208,2,t, 1997.. 2 That the Citr (l'il Court Appeal No 120 of 2013 be and is; hereby dismissed, confirming , e .rrrlgrngnl in o.s.No.'1 15 0f 2006 dated 28 03.ir.13 0f the Xl, Additional clri* Judge (FTC), city civil court, Hyderabac save and except the issue .f rn.s;rre profit, accordingly LA.No.6 o,f 2013(XC,BJ .r3gg' of 2013) ln CCCA Nc .ljlil of 2013 is disposed off, in view of the juJgment in the appeals ( The respondc,n-. 1 to 4 in CCCA No 120 of 20.13/ Respont ient. /plaintiffs are entitled to I\4e;re profits as prayed for in the suit O.S.No .l 15 of 2006, On the file of the Xilt ,\ctrritional Chief Judge,(FTC) City Civil Courts, at F yderabad 1

To, 6. That Sole Respondents in CCCA Nos 77, 80,81 and 82 of 2002 who are the Respondents 1 to 4 in CCCA No 120 ol 2013' are entitled to costs of Rs.10,00,000i- (Rupees Ten Lakhs Only) to be paid by the Appellants in the appeals within four weeks through acceptable means (including by Cheque or through RTGS), towards costs of the appeals SD/.K.SRINIVASA RAO JOINT REGISTRAR //TRUE COPY// SECTION OFFICER 1. The First Senior Civil Judge, City Civil Court Hyderabad' 2. The Chief Judge, City Civil Courts, Hyderabad' 3. The Xlll Addl Chief Judge' (FTC) City Civil Courts Hyderabad 4. Two CD CoPies A-Av?SL k

CCCA.Nt>:; lT, BO, g1 & g2 of 2002 And t.A llct 0 of 2013 (XOBJ rvoiigea of 2013) lN / AND C) lCA.No .120 Ot 2013 DISMISSI I\II:) ALL THE APPEALS, EXCEPT |FIE IUESNE PROFITS ' lN CCCA \lo 120 OF 2O13,AND It Ig^6 CtF ito13,(X_OBJtOrseee oF 21013) rN cccA rrtc 120 or zote ii orsi,bsED oFF WITH Cot:i't'{i G 4K} HIGH C:OIJRT DATED 10t01t2025 COt\4tI/C,rIJ DECREE A-) l I I . lr i