BRIEF SUMMARY ON THE LITIGATION BETWEEN

John Peter Fernandes, Appellant

AND
RamakantRamchandraGhanate
& Mrs. Saraswati R. Ghanate, Respondents

The brief facts are as under:

The Appellant, Mr. John Fernandes working with

Breach Candy Swimming Bath Trust at Bhulabhai
Desai Road, Mumbai 400 026 since the year 1986.
He also worked there as Bar man-cum-waiter and
other capacities for about 16 years with British
Dy. High Commission, American and Belgium
Consulate personnel and resigned vide Certificate

dated 5th August, 2002 issued by the above Trust

and the resume.

He gave up his job as bar man-cum-waiter in the

Breach Candy a Swimming Bath Trust on or
about

5.8.2002

in

order

to

start

his

own

Restaurant business. Accordingly he was looking

out for a place to start the Restaurant business
and through a common friend named Mr. Subodh
Halankar, came in contact with the

aforesaid

Respondents, Mr. & Mrs. Ghanate (mother & son).

Incidentally the said Mr. Halankar was employed
as a Store Keeper with Breach Candy Swimming
Bath Trust.

The Respondents represented that

they are the owners of Shop No.2 & 3 situate on

Ground Floor of Shree

Samarth Nivas, bearing

C.S. No.6, of Dadar Naigaum Division, standing

on the land bearing Municipal Plot No. 383-1,

JagannathBhatnakar Marg, Mumbai 400 012,
admeasuring about 600 carpet ft. built up area.
They further represented that they are running
restaurant business in the name of KHANA
KHAZANA and expressed willingness handover the
said shop No.2 & 3 together with the business
KHANA KHAZANA (hereinafter referred to as said
shops with business) and further expressed their
willingness to permit the Appellant to run the said
shops

with

business

on

an

agreement

for

conducting. They further stated that they would

take a deposit of Rs.1,00,000. as security deposit
and a monthly rent of Rs.35,000 the appellant
showed his acceptance to the Respondents and
within a few days thereafter

offered to make

necessary payment towards the security deposit

and rent.

However, the said The Respondents

hiked their offer to Rs.40,000. Monthly rent and

pay a deposit of Rs.2,00,000.

As the Appellant

was without any job and had to have some means

of livelihood for the upkeep of his family agreed to
the hiked deposit and rent. He also agreed

to

enter into agreement for conducting with the

Respondents on payment of the requisite rent of
Rs.40,000 and deposit of Rs.2,00,000. The said
Respondents however, again changed their mind
and informed the Appellant that he does not want
to let the said shops with business on any
agreement to conduct but would offer the same
on an outright sale and further informed that sale
price would be 35 Lakhs.

The Appellant being

without a job was in dire need of having a means

of livelihood requested the Respondents to give
him some time to consider the latest offer for the
outright sale of the said shops with business.
Thereafter The Appellant made efforts to generate
funds from various sources, i.e. family and friends
and financial institutions. The Appellant was able
to

collect

informed

Rs.15,00,000
the

respondent

to

16,00,000.

about

the

and
same.

Thereafter appellant negotiated with The New

India Co-operative Bank Ltd for a loan of Rs.23 to
25 Lakhs and informed the respondent about the
same. The respondent insisted that the appellant
must first make substantial cash payment of
Rs.11 to 12 lakhs and also insisted that the
Complainant must show loan sanction letter for

the balance amount of Rs. 25,00,000.- approx.

from a bank before any agreement for sale could
be entered. The appellant accordingly on the
advice

of

Respondents

opened

an

account

No.1825 on 11th August, 2003 in the name of

Khana

Khazana with New India Co-operative

Bank Ltd and thereafter requested the respondent

to furnish him with the papers and documents
concerning the said shops and business premises
being Shops No.2 & 3 in Sai Samartha Niwas,
Jagannath Bapat Marg, Parel, Mumbai 400 012
so that the appellant could take all necessary
steps to get the required loan sanctioned, make a
loan application, etc.
4

The Appellant also requested the appellant to

provide the following documents and papers to

enable the appellant to apply for bank loan and the

same were provided by the respondent.
a Municipal registration certificate under shop and
Establishment No.FS-Iv/00067.
b Photocopy of the Municipal Registration Certificate
under Bombay Shops and Establishment Act
bearing No.FS-IV/000690.
c Photocopy of the Police License No.701 of
Bhoiwada Police Station.
5

The appellant accordingly raised funds by taking

loans from his various relations & friends and
paid various sums aggregating Rs.11,50,000 to
the respondent and spent another Rs.5,00,000
towards stamp duty, registration, search report,
valuation report and loan processing charges.

Ultimately

the

Agreement

for

Sale

date 6th October, 2003, executed and registered.

The respondent has attended the office of the

Sub-Registrar of Assurance at Old Custom House,

Mumbai and executed the said Agreement for sale
dated 6th October, 2003 for himself and also on
behalf of his mother Mrs. Saraswati Ramachandra
Ghanate.

Meanwhile

the

appellant

with

help

of

his

Chartered Accountant, Mr. Kiran Kothari had

made an application to the New India Co-operative
Bank Ltd., for the required loan

submitting

therewith a) Valuation Report dated 7th June,

2003 by M/s YardiPrabhu Consultants Pvt. Ltd.,
b) Legal opinion dated 11th June, 2003 of M/s.
Bina Rao & Co, Advocates & Solicitors, in respect
of the said shops with business, c) the title
certificate of the property i.e. said shop No.1 & 2

issued by Advocate M.C. Hegde dated

3-2-2003

d) as required by the Bank.

8

The

Appellant

also

deposited

his

Insurance

Policies of assured value of Rs.8,50,000.- with the

Bank, being policy No.s 908737921, 908738731,
907000381, 907233320 & 901765867. The bank
also required three guarantors for the repayment
of loan and which the appellant provided i.e. Mr.
Simon Fernandes, Mr. Gurudatta Manohar Shinde
and Mr. Rajesh Bhagwat Koli.
9

As stated above the appellant put all his efforts

and incurred expenses and finally got the loan of
Rs.25,00,000
sanction

sanctioned

letter

bearing

and

obtained

loan

No.NI/BNW/704/2003

dated 2nd July, 2003. This sanction letter inter

alia mentioned that the Complainant can avail

the medium term loan for purchase of suit

shop with business by executing a registered
Mortgage

Deed

of

Hotel

premises

and

hypothecation of kitchen equipment, furniture

and fixtures on the terms and conditions
mentioned therein.

No sooner the same was

received the appellant showed the same to the

respondent and his mother Mrs. Saraswati R.
Ghanate as demanded by the Respondents as
pre-condition

to

enter

into

the

said

agreement.. The Appellant further apprised the

respondent that in order to get the loan disbursed
to the respondent it was necessary to prepare a
draft agreement to sell and get the same approved
by the authorities of the New India Co-op. Bank

Ltd. The respondent on his behalf and on behalf

of his mother Mrs. Ghanate co-operated in getting
prepared a draft agreement in respect of the said
shops with business and the same was shown to
the bank authorities and obtained the approval of
the Bank.

The bank authorities, particularly

Mr. B.A. Salvi, Branch Manager explained to

the appellant and the respondents that as a
pre-condition for the disbursement of the loan,
the Agreement to sell must be duly executed
and

registered

and

thereafter

the

said

agreement to sell must be lodged with the

Bank and complete other formalities to enable
the Bank disburse the loan directly to the
respondent.

Both

the

appellant

and

the

respondents
mutually

consented to this arrangement and

settled

and

approved

the

draft

agreement and the same duly executed stamped

and registered with Sub Registrar of Assurances,
Mumbai.

The

respondent

accompanied

the

appellant to the office of the Sub Registrar and

executed the agreement by signing before the
Registrar for himself and as Power of Attorney
holder of his mother Mrs. Ghanate. The said
Agreement was registered under Serial No. BB-2-E
09219 of 2003 with the Registrar of Assurances,
Mumbai.
10

By the time agreement was signed and registered

the Appellant had incurred a total sum of
Rs.15,26,686/-.

11

Thereafter the respondent tried to get to the Bank

so that the loan amount could be disbursed to
him and his mother after completion required
formalities such as lodging the duly registered
agreement

dated

6th

October,

2003

and

hypothecation of kitchen equipment, furniture

and fixtures with the New India Co-op. Bank Ltd.
Unfortunately

the

respondent

continuously

avoided to approach the Bank. Ultimately the

Bank was compelled to cancel the loan and
despite repeated pleadings of the appellant to
revalidate the loan. Later it was learnt that the
respondent had in fact visited the Bank and had
the loan cancelled.
12 The Office of Sub Registrar of Assurances
registered the transfer of the shops in the

name of the appellant and issued Index II, on

9th January, 2004.

Till date the property

stands in name of the appellant. In the latest

Index II issued on 10th December, 2015 also
indicates the name of the appellant as the
owner.

13

The appellant thereafter contacted the respondent

and asked him reasons for avoiding compliance
terms of the aforesaid loan sanction letter.

On

persistent requests of the respondent, bluntly

told the appellant that he would sell the said
shops with business for a sum not less than
Rs.40,00,000.
shocked

at

the

The Appellant was then shell

treacherous

tactics

of

the

respondent. The Appellant had was without any

job and exhausted all his resources by payment

Rs.11,50,000.- and other expenses on agreement
for sale and was under heavy loans. The appellant
and his family was reduced to penury; it was
difficult for him to feed his wife and two minor
children.

The

appellant

was

disappointed,

frustrated and appeared to him that the world had

come to an end for him. However, once again he
desperately approached the State Bank of India,
Parel Branch, with his application to State Bank
of India on 29th October, 2003

The bank

authorities after a scrutiny of his application and

after site inspection of the said Shops with
business

vide

its

letter

dated

04-3-2004

recommended a medium term loan of Rs.30 lacs

and working capital limit of Rs.0.75 lacs to enable

him to pay the balance consideration. Incidentally

this loan was higher than the previous loan of
Rs.25,00,000 by Rs.5,75,000.

Once again the

respondent was back at his old game of hide and

seek and avoided to come to the State Bank of
India as well. The respondent thus again failed
to honour his obligations to approach the Bank
to complete the bank formalities to enable the
bank to disburse the loan.
14

The Appellant was further shocked to learn from

State Bank of India, Parel Branch, Mumbai that
the respondent had in fact visited the along with
a few persons to the office of State Bank of India
and informed that the appellant never wanted to
sell the said shops with business to the appellant
and the respondent further warned the Bank

officials that if any loan is granted to the appellant

there was no guarantee that the said loan will be
repaid as the respondent was determined to
prevent the appellant from the running the said
shops

with

business.

It

appears

that

the

respondent even showed a document to the

alleged to have been executed by the appellant to
the effect that the appellant himself did not want
to purchase the said shops with business. The
appellant was even more shocked to learn that the
Respondents No.1 & 2 had with the help of the
aforesaid fabricated document had also let the
said shops No.2 & 3 to Lucky Wines and Jalaram
Eletronics.

15

It is an admitted fact before the Ld.

Arbitrator.
The appellant

finally

systematically

swindled

realized
by

the

that

he

was

Respondents.

Therefore in the month of August, 2004 filed suit

No.2412 of 2004 in the Honble High Court of
Bombay and took out a Notice of Motion No.2347
of 2004 for interim reliefs inter alia seeking
appointment of Court Receiver. The Honble High
Court was pleased appoint Court Receiver in
respect of the said shops with business vide copy
of the order dated 30th August, 2004 passed by
His Lordship Mr. Justice V. M. Kanade in Notice of
Motion No.2347 of 2004 in the said suit. The
aforesaid Motion came up for final hearing when
the Honble Court was pleased dispose of this
Motion by an Order dated 4th March, 2005 passed
by His Lordship Mr. Justice D. K. Deshmukh.
16 The Respondent by filing Appeal No.322 of 2005
challenged the above order dated 4th March,
2005 and the said appeal was disposed off on

mutual consent of the parties to refer the

matter to Arbitration. By a consent order dated
15th April, 2005 passed by their Lordships Mr.
Justice A.P. Shah and Mr. Justice S.J. Vazifdar,
the matter was referred to Arbitrator Mr. D. D.
Madon for his arbitration. The appellant filed
his Statement of Claim dated 15th July, 2005
before the Ld. Arbitrator inter alia seeking
specific performance of the agreement dated 6th
October,

2003,

seeking

directions

to

the

Accused No.1 & 2 to handover vacant peaceful

possession of the said shops with business by
accepting

Rs.25,00,000

and

other

reliefs.

Subsequent to stamping and registered the

Agreement for Sale, the Revenue authorities
had put the name of the appellant in respect of

the properties and issued Index II. Till date the

appellant is shown as the owner of the said
properties.
17 The Respondent filed their reply and for the
first time relied on an alleged declaration
dated 19th December, 2003 falsely claiming
that the same has been declared and signed by
the

Complainant

allegedly

expressing

his

unwillingness to purchase the said shops with

business. The original of the said declaration is
with the Respondents. A copy of the same was
received by the Appellant for the first time on
or about 30th June, 2005 during the Arbitration
proceedings.

18 The

Appellant

filed

his

affidavit

in

lieu

of

examination in chief dated 23rd July, 2005 and

was cross examined dated 23rd July, 2005, 24 th
August,

2005,

31st

August,

2005

and

1st

September, 2005. In his cross examination, the

Appellant inter alia denied making the alleged
declaration dated 19th December, 2003 and
denied signing the same before any advocate or
notary.
19

The Respondent filed his affidavit in lieu of

examination in chief dated 29th August, 2005 on
his behalf and on behalf of Accused No.1 and was
cross examined on 13th September, 2005 as RW-1.
It is pertinent to note that the Accused No.2
during his cross examination even admitted to
have the loan cancelled by visiting the Bank.

(Answer to Question No.45) The Respondents

also sought to prove the aforesaid declaration
dated 19th December, 2003 with the help of
affidavit dated 27th September, 2005 and 28th
September, 2005 respectively of Notary Mr. D. S.
Prabhu and Adv. Mahendra Kumar H. Singh, the
Notary who notarized the said Declaration and
advocate who claimed to have identified the
person signing on the said declaration. The
aforesaid Notary was cross examined as RW-2
and advocate as RW-3.

Both RW-2 and RW-3

failed to identify the Appellant though was

present before the Arbitrator throughout the
arbitration proceeding on 30th October, 2005.
The Ld. Arbitrator was pleased to pass an
Award dated 3rd February, 2006.

By filing an

Arbitration

Petition

No.275

0f

2005

by

the

Accused No.1 & 2 the said award was set aside by

an order dated

and the said order is also

challenged by the Appellant by preferring an

Appeal No. Appeal No.475 of 2009, which is
pending before the Division Bench of the Honble
High Court.
20

The Complainant states that

Respondents have

fabricated the aforesaid declaration dated 19 th

December, 2003 with the help of the Respondent
No.3 & 4. The Respondents have used the
aforesaid declaration to prevent the State Bank
of India from sanctioning and disbursing the
loan to the Respondents No.1 & 2 and the
Respondent in turn have used the same as an
excuse to avoid discharge of their obligations

under the Agreement dated 6th October, 2003.

The Accused No.1, 2, 3 & 4 have fabricated a false
declaration dated 19th December, 2003; they have
given false evidence on oath in court proceedings.
The

Respondents

possession

the

No.1

said

&

false

have

in

declaration

their
dated

19thDecember, 2003 and used the same to deprive

the the Appellant of the said Shops with business
and misuse and misappropriate the amounts
worth Rs.11,50,000. and also induce/convince
third parties to take said shops with business on
rent even during the pendency of the judicial
proceedings. The Accused No.1 & 2 are earning
Rs.1,00,000/- approx. by way of monthly rent
by letting the said shops to third parties. The
Respondents have done so despite the fact the

matter is pending before the Honble High Court

and Notice of the same is given to the Sub
Registrar and Collector of General Stamp Office,
vide letter dated 26th June, 2007. It is therefore
would be in the interest justice that the Appellant
be suitably compensated as per provisions of
Section 357 of the Criminal Procedure l Code,
1973) for the heavy loss and injury caused to the
Appellant by the Respondents No.1 & 2 by
depriving the Appellant

of said shops with

business on the one hand and on the other hand

attempting

to

misappropriate

an

amount

exceeding Rs.11,50,000.- paid by the Appellant in

good faith to the Respondents No.1 & 2 towards
part payment of consideration of Rs.35,00,000.for the said shops with business.

21

Under the aforesaid facts and circumstances

despite the pending civil case in the Honble
Court,

the

committing

Respondents
offences

can

under

192,196,197,199, 200, 209,

be

sections

tried

for

34,191,

463, 464, 467,

468,471, 474 of the Indian Penal Code (45 of

1860).

Note :

The fabricated Affidavit-cum-declaration dated 19 th

December, 2003 and evidence given by the Notary &
identifying Advocate can be used for proceeding
against

Respondent

No.2.

The

Police

when

approached took unduly long time and finally asked

the Appellant to approach the Ld. Arbitrator and get
an order to proceed in the matter. However as the
Ld. Arbitrator is not court and cannot give order or
direction to Police Machinery. By the very nature of
offences i.e. fabricating a document, using the same
for cancelling the loan, producing the document in a
proceeding, making false statements on oath, is a
serious crime not only against Appellant but also
against the society- the police machinery can move
in to investigate and punish the accused i.e. RW-1 &

2 and take help RW-2 and RW-3 as witnesses.

Appellant has tried for one year but police response
has been negative.

A direct approach to get

direction from top police officers may help.

Civil action takes too long time with possibilities of
Appeals. A criminal action has better chances of
bringing the offender to justice and or some kind of
just stettlement.