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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.