Adnan Sami case: Bombay High Court refuses to decide on ownership of flats

Although Pakistani singer Adnan Sami was granted relief against the order of the family court, the Bombay high court has refused to go into the ownership issue of the five disputed flats at Oshiwara saying that "validity of acquisition of the flats" will be decided by Directorate of Enforcement (ED).

A division bench of justices VK Tahilramani and AK Menon, on December 22, had stayed the order of family court which directed Sami to pay Rs5.3 crore to

ex-wife Sabah Galadari, a citizen of UAE, towards repayment, compensation and Meher (money given by husband to wife after marriage) and also surrender his duplex flat at Andheri.

The judges had also directed him to deposit Rs71.43 lakh within eight weeks with the registrar general of the HC. "The amount, if deposited, be invested by the Registry in a Nationalised bank in a fixed deposit initially for a period of one year and to be renewed subsequently for further period subject to result of the appeal."

Sami had purchased eight flats in one building, Oberoi Sky Garden Cooperative Housing Society Ltd, on December 29, 2003. the agreement for the same were signed on January 16, 2004.

Sami and Galadari were first married on September 15, 2001 and divorced on April 18, 2004. They later remarried as per Shariat law on April 5, 2007.

This shows that the flats were purchased during the period of co-habitation.

The society issued Share Certificates to Sami on March 31, 2008. Of these, Sami transferred five flats in the name of Galadari on May 12, 2008, by way of gift deed.

The judges have not made reference to the other three flats which are not a matter of dispute.

The family court, in April, had restrained Sami and his family from entering these flats and directed him to hand over their possession to Galadari.

The HC has allowed Sami and his family to reside the flats observing: "In the meantime it will not be correct to dispossess the Appellant (Sami) pending such final adjudication (of his appeal)."

However, the HC has restrained him or any of his agents to create third party rights.

The judges have also restrained Galadari from creating third party rights in the flats by the virtue of gift deed executed in her name.

The HC has, however, not gone into the issue of ownership of the flats saying that the same is being probed by the ED.

"However, there is something more fundamental that pervades claim to title and possession (of the flats), namely, the Enforcement Department contention that the flats could not have been purchased by the Appellant (Sami) in the first place owing to his status as a Pakistani citizen and the fact that the property is allegedly purchased in violation of the Foreign Exchange Management Act, 1999 (hereinafter referred as "FEMA Act"). The authorities have already taken steps in this behalf and has confiscated the flats," noted the HC.

The HC has further said that till the ED decides on the issue, it would not go into the issue of the ownership of the flats.

The judges have clarified that "the direction will be subject to final outcome of the proceedings adopted against the Appellant and flats under the FEMA."

The HC observed: "The matter is now pending before the Appellate Tribunal. It is only subject to final outcome of that adjudication that the Appellant could be considered as legitimate purchaser of the flats. If acquisition is found to be void the Appellant would have no title to the flats. Needless to mention no valid gift deed could have been executed in favour of the Respondent. The issue therefore of ownership ought not be gone into at this stage pending final adjudication on validity of acquisition of the flats by the Appellant in the first place."

As regards to the Rs5.3 crore "lent" by Galadari to Sami between April 8, 2007 and August 16, 2008, the HC has said it would have to be decided at the time of appeal.

Galadari had admitted during her cross-examination that of these, Rs4.1 crore were spent on interior decoration of the five flats. "There was no loan agreement in writing and a loan could not be given on the basis of oral understanding... That in the absence of writing the Respondent 's contention would be untenable especially in the light of the provision of the section 25 of the Contract Act," observed the HC.

The judges have also observed that the compensation of Rs1 crore awarded by the family court towards the domestic violence and meher and litigation expenses appear to be on an ad-hoc basis.

"No evidence was pointed out to us which would justify this assessment. It appears to be an ad-hoc figure arrived at by the Court. Likewise the amount of Rs10,00,000/- awarded towards Meher is also subject matter of dispute. We do not consider the amount awarded towards compensation, Meher and litigation expenses, the quantum such as non payment of which will prejudice the Appellant in material terms at this point," said the judges.