Bombay High Court
M/S. Star Apparels Pvt. Ltd vs Parampreet Singh Bindra on 21 August, 2008
Equivalent citations: AIR 2009 (NOC) 1365 (BOM.), 2009 (1) AIR BOM R 698 2009 A I H C 1878, 2009 A I H C 1878, 2009 A I H C 1878 2009 (1) AIR BOM R 698, 2009 (1) AIR BOM R 698
Author: Roshan Dalvi
Bench: Roshan Dalvi
1
IN THE HIGH COURT OF JUDICATURE
AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO.258 9 OF 200 7
IN
SUIT NO.49 3 OF 200 7
M/s. Star Apparels Pvt. Ltd. ...Plaintiffs
Vs.
Parampreet Singh Bindra
alias King Bindra & Ors. ...Defenda nt s
Mr. D.D.Madon , Sr. Counsel with Mr. V.V.Kanade ,
Ms. D. Khare i/b. Shralkar & Co. for Plaintiffs
Mr.P.K.Samda ni , Sr. Counsel a /w. Mr. Kamal Khata &
Mr. H.C. Mehta and S. Nasradaria, Ms. Deepti Shah
i/b. Mehta & Co for Defendan t No.1
Mr.F.E . D'Vitre, Sr. Counsel with Mr. Ramesh Tiwari
i/b. B. Dandekar for Defenda nt Nos.3
Mr. V.R. Dhond i/b. M/s. Prakas h & Co for Defenda nt No.7
CORAM: SMT.ROSHAN DALVI, J.
DATED: 21 ST AUGUST, 200 8
JUDGMENT
1. The Plaintiffs have essentially sued for specific performance of the Agreement / M e mor a n d u m of Understa n di ng (MOU) dated 18 th May, 2006 entered into ::: Downloaded on - 09/06/2013 13:42:38 ::: 2 between the Plaintiffs and Defenda nt s 1 and 2. The Plaintiffs have challenged the termination of that agreement. The Plaintiffs also seek a declaration that the MOU dated 30 th Ju ne, 2005 between Defenda nt No.3 and Defenda nt No.1 is valid and subsisting, and for an order that Defenda nt s 3 to 6 specifically performed the said MOU. The Plaintiffs have further sought the declaration that an agreement dated 26 th December, 2007 between Defenda nt No.3 and Defenda nt No.1 is void, and further that an agreement dated 29 th Jan u a ry, 2007 between Defendan t No.1 and Defenda nt No.7 is also void. The Plaintiffs have applied for ancillary reliefs with regard to those agreement s and in the alternative for damages.
2. The Suit property is the land bearing CTS No.82 at village Malegaon, Tal: Andheri, Mumbai.
3. The relations hip between the parties to the aforesaid agreement s must be first understood. The Plaintiffs have entered into an agreement with Defenda nt No.1. Defenda nt Nos.1 and 2 are not the owners of the suit property. The Defenda nt No.3 (The Trust) (Defendant s 4,5 and 6 are the Trustees of the Defendant No.3 Trust) are the owners of the suit property. The Trust wanted to sell its property at CTS No.82. The Trust required to take permission from the ::: Downloaded on - 09/06/2013 13:42:38 ::: 3 Charity Commissioner for such sale under Section 36 of the Bombay Public Trust Act (BPT Act). The Trust, however, had other properties of the Trust near CTS No.82. From amongst those properties a property bearing CTS No.61 did not belong to the Trust. That property was encroached upon. The encroach m e nt s came to spill on to the Trust properties adjoining CTS No.61. Whereas the Trustees decided to sell CTS No.82, they desired to purcha se CTS No.61 from the owners of that land, so as to include it within their other lands, free from encumb r a n ce s that it held.
ig Conseque n tly, the Trust wanted a composite deal - to sell CTS No.82 and to purcha se CTS No.61 free from encum br a n ce s or encroach me n t s.
4. The Plaintiffs have had nothing to do with any agreement in that behalf with the Trust.
5. The Trust initially entered into an MOU on 30 th Ju ne, 2005 Exhibit- A, to the Plaint, with Defendan t No.1 (Whereas the Defenda nt No.1 is the Proprietary Concern, Defenda nt No.2 is the partner of sole Proprietor of Defenda nt No.1).
6. Under the MOU, the Trust agreed to enter into a Development Agreement with Defenda nt No.1 granting Defenda nt No.1 the absolute right of development of CTS ::: Downloaded on - 09/06/2013 13:42:38 ::: 4 No.82 under the said MOU. The aforesaid arrangeme n t s with regard to the Survey Nos.82 as well as 61 were to be a part of the Development Agreement. The Trust agreed to enter into the Development Agreement within 30 days of receipt of the permission of the Charity Commissioner for sale of the land. The Developers agreed to obtain vacant possession of the CTS No.61 for the Trust and develop CTS No.81 for which they would pay a consideration of Rs.2.30 Crores in four installment s mentioned therein. The relationship between the parties under the Development Agreement were to be on principal to principal basis. Time was to the essence of the MOU subject to two extensions of three mont hs each for Defenda n t No.1 to carry out their obligations with regard to CTS No.61. Upon signing the Development Agreement between the parties the MOU was to stand relinquished.
7. It is seen that this constitutes the initial negotiations between the owners, Defendant No.3 and the initial Developers, Defenda nt No.1. The Plaintiffs have prayed for specific performa nce of this agreement by and between Defenda nt No.1 and Defenda nt No.3.
8. Entering into the Development Agreement for CTS No.82, would require a later sale by transfer to the Co-
::: Downloaded on - 09/06/2013 13:42:38 ::: 5operative Society, which would come upon the said plot.
Defenda nt No.3 were stat utorily required to obtain permission for such sale from the Charity Commissioner.
This, they obtained under judgment dated 26 th July, 2006 passed by the Joint Charity Commissioner, Mumbai, Exhibit- D, to the plaint. The said order permitted sale of CTS No.82. It allowed transfer of the vacant plot of CTS No.61 upon a consideration of Rs.2.30 Crores and gave time for the usage of the sale proceeds.
9. Defenda nt Nos.3 and 1 have negotiated until December, 2006 by ultimately entering into the Development Agreement. The draft of their agreement for development came to be prepared in November, 2006. It appears that, the Defenda nt No.1 did not himself desire to develop; he was to create rights in other developers, who would finance the project. The Defenda nt No.3 were interested in having their unique contract for release from encum br a n ce s of CTS No.61 alongside the sale of CTS No.82. If the Defendant No.1 was not to himself develop the project, Defendan t No.3 were to allow some other Company or partners hip or such other entity, in which Defendant No.1 would have control and stake to develop it, so that there end in obtaining the release of CTS No.61 and the sale of CTS No.82 would contempor a neo u sly to be achieved.
::: Downloaded on - 09/06/2013 13:42:38 ::: 610. The draft Development Agreement between the Defenda nt No.3 and defenda n t No.1 of November, 2006, part of the Exhibit- R to the plaint, shows how the parties were to deal with the aforesaid two Survey numbers upon the aforesaid consideration. Though, therefore, the ambit of the MOU was maintained in the Development Agreement, which the parties had agreed to enter into, the actual mode to obtain that end was negotiated, drafted and later modified. The draft of November, 2006 showed that the hutme nt s would be removed from CTS No.61 within 36 months with an extendable period of further 12 mont hs. The Defenda nt No.3 as the owners were to have a lien on 15000 sq. ft. on constr ucted area of CTS No.82 until the hutme n t s were removed and for their alternate accommoda tion under Clause 4.2 of the said draft of November, 2006. Further, the Developer was to compens ate the owner in case of refusal to rehabilitate hut me nt owners under Clause 4.3 of the said draft agreement. CTS No.82 upon which the Defenda nt No.1 was to constr uct and was to be handed over after the aforesaid obligation, with regard to CTS No.61 was performed under Clause 5.2 of the said draft agreement. Defenda nt No.3 allowed Defendant No.1 as the developer to grant sub- development of the property and assigned his rights and entitlement s to a third party, subject to that third ::: Downloaded on - 09/06/2013 13:42:38 ::: 7 party being liable to fulfill the aforesaid obligations with regard to CTS Nos.61 and 82 under Clause 6.1 5 of the said draft agreement. The Developers had the right to sell the units and form a Co- operative Society upon development of plot No.81 under Clause 8 of the said draft agreement.
11. The parties further negotiated and arrived at the final Development Agreement on 26 th December 2006, which was also executed between Defenda nt No.3 and Defendant No.1. The aforesaid terms came to be modified. Conseque ntly, the obligations with regard to CTS No.61 were agreed to be performed by Defenda nt No.1 within 24 month s with a further extenda ble period of 12 mont hs from the date of that agreement. (the period of 36 months came to be reduced to 24 month s for that purpose) . The Defendant No.3 were to have a lien on 16478 sq. ft. built- up area to be constr ucted on CTS No.82 (the area of 15000 sq. ft. came to be increased accordingly) . The parties agreed that Defenda nt No.1 would be entitled to transfer the benefits of the agreement or assign any rights or grant sub- development rights in the suit property to any Firm or Company in which Defenda nt No.1 was a part ner, member or Director, and Defenda nt No.1 would remain person ally liable to comply with the obligations with regard to CTS No.61. (Hence, mere sub- development rights came to be changed to the grant of such ::: Downloaded on - 09/06/2013 13:42:38 ::: 8 rights only to a Firm or a Company constituted or incorporated by Defenda nt No.1 along with his personal liability continuing thereun der) .
12. It can be seen that the initial MOU dated 30 th Ju ne, 2005 culminated in the Development Agreement dated 26 th December, 2006 between the Defenda nt s 3 and 1.
13. It appears that Defenda nt No.1, from the very inception, had considered having a sub- developer or a financer for his project. That being the scheme of development, Defenda nt No.3 were amena ble to having the project sub- developed or financed by a third party, but took care to keep the obligation of the Defenda nt No.1 in the said project alive for the entitlement of the owners, to the vacant plot under CTS No.61 alongside the development and sale of the plot under CTS No.82.
14. The Defenda nt No.1 negotiated inter alia with the Plaintiffs. It is, under such circum st a n ces, the Plaintiffs came into the picture.
15. The initial docume nt of the Plaintiffs, is the MOU executed on 18 th May, 2006 Exhibit- C, to the plaint. This was about a year after the MOU came to be executed ::: Downloaded on - 09/06/2013 13:42:38 ::: 9 between Defendan t No.3 and Defenda nt No.1, to agree to enter into a Development Agreement. Conseque ntly, to enable Defenda nt No.1 to enter into such Development Agreement, he entered into the MOU with the Plaintiffs. Under the MOU dated 18 th May, 2006 Defendan t No.1 agreed to allow the Plaintiffs to develop and utilise the plot of land at village Malegaon, Tal: Andheri, Mumbai (the survey number of the plot is not stated). This agreement was subject to the fulfillment of the conditions mentioned in the MOU, executed by Defendan t No.1 with Defendan t ig No.3 (which was dated 30 th Ju ne, 2005). Under the MOU between the Defenda nt No.1 and the Plaintiffs, Defenda nt No.1 was to get the ULC permission to constr uct the bound a ry wall, get the approval of the Charity Commissioner for the property to be developed (CTS No.82), enter into agreement with encroachers on the nearby plot (CTS No.61) (both the CTS number s are not stated in the MOU) and make out a marketa ble title to the said property.
16. The consideration agreed between the parties was to be of Rs.9.50 crores for transfer and assignmen t of the said plot. Rs.51 lakhs was to be paid initially on execution of MOU against the security for repayment, if so required to be repaid by depositing with the Solicitor of the Plaintiffs. The letter of allotment of one flat of the value of about Rs.60 ::: Downloaded on - 09/06/2013 13:42:38 ::: 10 lakhs was to be held in escrow, and on the execution of a Promissory Note by Defenda nt No.1. Hence, it is seen that the initial payment of Rs.51 lakhs was not by way of earnest amount unconditionally given. For the initial payme nt also the parties contemplated the mode of its repay me nt and the security for that purpose. Consideration as required for an agreement to sell an immovable property did not pass. The execution of the Promissory Note suggested that the amount of Rs.51 lakh s paid by the Plaintiffs was treated as a deemed loan from them.
17. The balance amou nt of Rs.8.99 Crores was to be paid by the Plaintiffs to Defenda n t No.1, upon Defendant No.1 fulfilling all the conditions under the agreement and the execution of appropriate docume nt s in favour of the Plaintiffs. This amou nt was payable within 45 days by the Plaintiffs after all the conditions were fulfilled. The period of payment for 45 days was to be extended and if within that period the Defenda n t No.1 would not be able to fulfill the condition they would be liable to pay the Plaintiffs interest at 12% on Rs.51 lakhs paid and secured. Hence, an extended period of 90 days wa s given for complying with the conditions by the Plaintiffs. If the conditions could not be complied, the amount would carry interest. The amount of Rs.51 lakhs was itself paid as security for its repayme nt by way of allotment of flat and execution of a Promissory Note. If the amount had to ::: Downloaded on - 09/06/2013 13:42:38 ::: 11 be repaid after 90 day s of the agreement, it would be repaid along with the interest at the agreed rate.
18. The period of three mont hs allowed to the Plaintiffs to make payment upon the Defendan t s carrying out the five conditions mentioned in the MOU expired on 17 th August, 2008. Under the last clause of the said MOU the parties agreed that the terms, which required to be deliberated, would be discussed and finalised with consent of their respective Solicitors igand further Memorand u m s may be executed from time to time. Hence, the parties did not take the aforesaid MOU as a final Agreement between them .
19. It is this MOU, that the Plaintiffs essentially seek to specifically enforce. This MOU is subject to the earlier MOU between Defenda nt No.1 and Defendant No.3. The Plaintiffs have not paid any consideration under the MOU - and not even earnest amoun t - except a loan against security repayable with interest at 12%. Defenda nt No.1 has not performed all the conditions mentioned in the agreement.
The parties in fact negotiated further.
20. The owners, Defendant No.3 allowed the Plaintiff's Attorneys to publish a public notice by their letter dated 22 nd ::: Downloaded on - 09/06/2013 13:42:38 ::: 12 September, 2006 Exhibit- E , to the plaint. That public notice was to be given for the purpose of clearance of title of CTS No.82. Such permission was given also to the Defendan t No.1 under Clause 3.4 of the final Development Agreement dated 26 th December, 2006.
21. The Plaintiffs gave the required public notices. These public notices Exhibit- F, F1 and F2 , to the plaint, specifically show that the Plaintiffs are negotiating to purcha se the property of the Trust under CTS No.82.
ig The notices have been given on 29 th September, 2006. The negotiations were going on. Defendant No.3 was aware that Defenda nt No.1 is negotiating to obtain finance / s u b- development rights .
22. The negotiations did not fructify. On 5 th October, 2006 the Attorneys of Defenda nt No.1 wrote to the Plaintiffs setting out the negotiations between the parties and the fact of several modifications having taken place between them, thereafter. They stated in the said letter that it was "finally agreed" that the Defendan t No.1 would form a Limited Company and enter into a development agreement with the Trust and immediately thereafter, the Plaintiffs would purcha se the entire share holdings of Defenda n t No.1 Company. This was in terms of the requirement of ::: Downloaded on - 09/06/2013 13:42:38 ::: 13 Defenda nt No.3 to allow a third party to take over sub-
development rights subject to Defendant No.1 being made personally liable. The letter further states that the Plaintiffs agreed to pay Defenda nt No.1 the entire agreed consideration on or before 30 th September, 2006, failing which on 1 st October, 2006 the MOU and all further underst a n di ngs would stand cancelled, irrevoked and Rs.51 lakhs deposited by the Plaintiffs with Defenda nt No.1 would be forfeited. The Defenda nt No.1 formed a Private Limited Company and obtained a certificate of Incorporation on 5th September, 2004. The Defenda nt No.1 also claimed to have sent a draft Development Agreement to be entered into by them with the Plaintiffs (which is not produced by any party in Court). The Attorneys of Defenda nt No.1 gave notice to the Plaintiffs, that, as orally agreed in further negotiations, the Plaintiffs failed and neglected to deposit the entire consideration in escrow with their Solicitors by 30 th September, 2006 and hence, the MOU dated 18 th May, 2006 stood cancelled and Rs.51 lakhs stood forfeited. The letter, therefore, show s negotiations carried on between the parties, as they had envisaged and incorporated in the last clause of the MOU dated 18 th May, 2006 .
23. The further negotiations showed a quant u m difference in the mode of payment of consideration. It showed the ::: Downloaded on - 09/06/2013 13:42:38 ::: 14 simulta neo u s act of Defenda nt No.1 as required by Defenda nt No.3 in their separate negotiations. The public notice which the Plaintiffs required to give and which were permitted by Defendan t No.3 on 22 nd September, 2006 came to be given on 29 th September, 2006 a day before the oral negotiations between the Defenda nt No.1 and the Plaintiffs were to culminate into the payment of consideration, for obtaining the development rights by the Plaintiffs.
24. The Plaintiffs Attorneys, ig by their letter dated 19 th October, 2006 Exhibit- H, to the plaint, suggested further modifications of the deal. Plaintiffs, offered to deposit entire consideration with their Solicitors with irrevocable instr uction s to release them in favour of Defendant No.1 upon the completion of the trans actions and also offered to obtain the ULC clearings, if it could not be obtained by Defenda nt No.1, as agreed in the MOU dated 18 th May, 2006. The further modifications suggested by the Plaintiffs show the continuance of the negotiations and are inconsistent with a completed contract before that date.
25. By a further letter of the Plaintiff's Attorneys dated 13 th November, 2006 Exhibit- I-1 , to the plaint, the Attorneys enclosed a fair draft of the proposed MOU for the approval and comment s of the Defenda nt's Attorneys. The letter ::: Downloaded on - 09/06/2013 13:42:38 ::: 15 stated that the "final docume nt s" would be executed within two days after the MOU is finalised. The fair draft is not annexed to the said letter in the plaint. The affidavit of Defenda nt No.1 shows that, under that draft, the consideration was increased and Defendant No.1 was obliged to form a Limited Company. The terms between the parties, therefore, came to be modified again. This itself show s that the earlier MOU dated 18 th May, 2006 was not the final agreement. The Attorneys of Defenda nt No.1, by their letter dated 14 th November, ig 2006, Exhibit- I-2 acknowledged receipt of the draft of the proposed MOU. They stated in that letter that inspite of "Fresh" negotiations, and several modifications there was no agreement between the parties and the proposed MOU was required to be further discus se d and finalised. They requested a meeting on 16 th November, 2006, so that the MOU could be executed by 17 th November, 2006, since Defenda nt No.3 Trust was pressing hard for execution of their Development Agreement with Defenda nt No.1.
26. The affidavit of Defenda nt No.1 shows that even the said modifications did not fructify. In fact further correspondence shows that meetings were held on 16 th November, 2006 and 24 th November, 2006 between the Attorneys of the Plaintiffs and Defendan t No.1, but the agreement remained elusive.
::: Downloaded on - 09/06/2013 13:42:38 ::: 1627. An E- mail is shown to have been sent by the Attorneys of Defendant No.1 to the Attorneys of Plaintiffs on 16 th November, 2006, part of Exhibit- R, to the plaint, annexing the draft Development Agreement between Defenda nt No.3 and Defendan t No.1.
28. On 28 th November, 2006 the Plaintiff's Attorneys once again wrote to the Attorneys of Defenda nt No.1, setting out certain terms orally agreed between the parties in several meetings the parties had during that period. This letter shows entirely modified terms between the parties. The Plaintiffs were to pay Rs.1.40 Crores to the Trust and Rs.4.40 Crores as loan to Defenda nt No.1, upon Defenda n t No.1 fulfilling their obligations in relation to the deal, being the execution of the Development Agreement with the Trust, and the Assignment Agreement with the Plaintiffs to be kept in escrow along with an appropriate Loan Agreement and a Power of Attorney. The Plaintiff's Attorneys called upon Defenda nt No.1 to perform those obligations and complete the deal. They annexed xerox copies of Demand Drafts to be given by the Plaintiffs in favour of Defendan t No.3 as well as Defenda nt No.1.
This sho w s that admittedly, there were further negotiations between the parties, though the contents of this ::: Downloaded on - 09/06/2013 13:42:38 ::: 17 letter have been denied in the letter of Attorneys of Defendant No.1 dated 13 th December, 2006, Exhibi t- N, to the plaint. It can be seen that if they were as stated, they would result in a completely different and modified agreement with the Plaintiffs. The initial MOU dated 18 th May, 2006 which the Plaintiffs seek to enforce was completely given a go-by. A further assign ment of the agreement, along with agreement and power of attorney were to be executed instead.
29. The Attorneys of Defenda nt No.1, by their letter dated 28 th November, 2006 to the Plaintiffs' Attorneys recorded two meetings held between the parties on 16 th November, 2006 and 24 th November, 2006 and stated that, no finality could be arrived at between the parties. The Attorneys ultimately concluded that the parties were not able to negotiate material terms and retur ned the initial amou n t of Rs.51 lakhs paid by Plaintiffs, at the time of the execution of the MOU dated 18 th May, 2006 along with interest as agreed thereon as per Clause 4 of the said MOU. The negotiations between the parties was stated to have stood withdrawn and terminated. A cheque for Rs.52,71,025 / - of Defenda nt No.1 came to be sent to the Plaintiffs.
30. Defenda nt No.1 accepted initial payment of Rs.54 lakhs from Defenda nt No.7 on 25 th November, 2006, that was the ::: Downloaded on - 09/06/2013 13:42:38 ::: 18 day after last meeting with the Plaintiffs on 24 th November, 2006 which did not culminate in any agreement. Conseque n tly under the letter dated 28 th November, 2006 Defenda nt No.1 retur ned the initial payment made on security with interest thereon.
31. The Plaintiffs' Attorneys, of course , retur ned the said cheque along with the letter dated 31 st November, 2006 and insisted that there was a binding agreement between the parties.
The letter does not show, which was that agreement that remained binding between them and which the Plaintiffs sought to enforce.
32. By further letters dated 7 th December, 2006 and 15 th December, 2006, Exhibits- M and O, to the plaint, Plaintiffs' Attorneys stated that the Plaintiffs have learnt that Defenda nt No.1 was trying to sell off the property to a third party committing breach of the agreement between Defenda nt No.1 and the Plaintiffs.
33. Alongside the negotiations between Plaintiffs and Defenda nt No.1, Defenda nt No.3 and Defendant No.1 also negotiated for development of the property of Defendant No.3. These negotiations, which were conseque n t upon the ::: Downloaded on - 09/06/2013 13:42:38 ::: 19 initial MOU between Defenda nt No.3 and Defenda nt No.1 dated 30 th Ju ne, 2005 culminated in the draft Development Agreement of November, 2006, which came to be finalised between them under the Development Agreement dated 26 th December, 2006, Exhibit- P, to the plaint. The negotiations between Defenda nt No.1 and the Plaintiffs during November, 2006 remained inconclusive.
34. Whilst the draft Development Agreement between the Defenda nt No.3 and Defenda n t No.1 were being considered by and between those parties, and during which period the meetings with the Plaintiffs resulted in an impasse, Defenda nt No.7 came to be considered for being granted the development rights. A day after the last meeting with the Plaintiffs, Defenda nt No.1 accepted the earnest amou nt of Rs.54 lakhs from Defenda nt No.7.
35. Defenda nt No.1 and Defenda nt No.7 entered into a joint Development Agreement on 29 th Jan u a ry, 2007, Exhibit- Q, to the plaint. Defenda n t No.1 is shown as a principle developer thereto. Defenda nt No.7, a part ners hip firm, are shown as co- developer. The agreement between Defenda nt No.3 and Defenda nt No.1 to have a sub- development for development of CTS No.82 while keeping Defenda nt No.1 personally liable to get the obligations in respect of CTS ::: Downloaded on - 09/06/2013 13:42:38 ::: 20 No.61 complied were recited and agreed between the Defenda nt No.1 and Defenda n t No.7. Defenda nt No.1 was to have 60% share in the development as the principal Developer and Defenda nt No.7 were to have 40% share therein. They would have joint obligations in respect of the development of CTS No.82 and be responsible to remove slum dwellers from CTS No.61 within 12 mont hs of the execution of the Joint Development Agreement.
Consideration amount s came to be paid in six equal installment s before the execution of the said docume nt, the first of the amoun t having been paid, as aforesaid, on 25 th November, 2006 after the last of the uns ucces sful meetings between Defenda nt No.1 and the Plaintiffs.
36. A reading of the agreement s between the various sets of parties being Defenda nt No.3 and Defenda nt No.1, Defenda nt No.1 and the Plaintiffs and Defenda nt No.1 and Defenda nt No.7 shows that from the inception, Defenda nt No.3, who are the owners of the land required a unique development of their land under which they would sell CTS No.82 and obtain vacant possession of CTS No.61.
Defenda nt No.3 knew and accepted that for such development, Defenda nt No.1 was not to be the only contracting party. Defendan t No.3 allowed the Plaintiffs to give public notice for clearance of the title of CTS No.82.
::: Downloaded on - 09/06/2013 13:42:38 ::: 21They allowed Defendant No.1 to sub- contract, their right by a sub- development agreement or a joint development agreement provided that the Defendan t No.1 remained personally liable. Negotiations between the two sets of parties - Defendan t No.3 and Defenda nt No.1, Defenda nt No.1 and the Plaintiffs moved simulta neou sly. The initial MOU between Defenda nt No.1 and the Plaintiffs came to be modified from time to time by both the parties orally as well as in writing. Various meetings came to be held between them from time to time until 24 th November, 2006.
ig Nothing
materialised. Defendan t No.7 came into the picture from
25 th November, 2006. The initial payment made by
Defenda nt No.7 was not conditional as was the payment of the Plaintiffs. It was, as would be accepted in a Development Agreement - as earnest money paid before an agreement could be executed, which could be enforced by the parties.
37. Though the Plaintiffs have sought specific performa nce of their initial MOU dated 18 th May, 2006, in this Suit, the Plaintiffs Attorneys' letters sent from time to time to the Attorneys for Defenda nt No.1 did not spell out the requireme nt of specific performa nce of that agreement. In fact their letter dated 30 th November, 2006 did not show which was the binding agreement and their letter dated 28 th November, 2006 showed new modified terms. The position of ::: Downloaded on - 09/06/2013 13:42:38 ::: 22 the parties can be better illustrated in a column ar statemen t showing how two sets of parties dealt with the suit property simulta neo u sly.
Defend a n t No.1 and 3 Defend a n t No.1 Defend a n t and Plaintiff No.1 and 7
30. 6 . 2 0 0 5 MOU
18. 5. 2 0 0 6 MOU
26. 7 . 2 0 0 6 Order of Joint Charity Commissioner
22. 9. 2 0 0 6 No objection letter by Defendant No.3 to publish notices
29. 9. 2 0 0 6 Notices published by Plaintiff 5.10. 2 0 0 6 Letter of termination November, 20 0 6 13. 1 1 . 2 0 0 6 Draft MOU between Modified MOU Defendant Nos.1 and 3. submitted by Plaintiff to Defenda nt No.1 ::: Downloaded on - 09/06/2013 13:42:38 ::: 23 Defend a n t No.1 and 3 Defend a n t No.1 Defend a n t and Plaintiff No.1 and 7
16. 1 1 . 2 0 0 6 Draft MOU between Defendant No.1 and 3 emailed to the Plaintiff
16. 1 1 . 2 0 0 6 and
24. 2 2 . 2 0 0 6 Meetings 25.1 1 . 2 0 0 6 ig Earnest amou nt paid
28. 1 1 . 2 0 0 6 Rs.51,00,000 / - with interest refunded by DefendantNo.1 to Plaintiff and retur ned by Plaintiff
28. 1 1 . 2 0 0 6 Plaintiff offered to pay Rs.1.40 Crores and Rs.4 Crores to Defendant No.3 and 1
26. 1 2 . 2 0 0 6 MOU between Defendant No.1 and 3 ::: Downloaded on - 09/06/2013 13:42:38 ::: 24 Defend a n t No.1 and 3 Defend a n t No.1 Defend a n t and Plaintiff No.1 and 7 29.1. 2 0 0 7 Joint Development Agreement between Defenda nt 1 and 7
38. Therefore, there is no specific agreement between the Plaintiffs and Defendant ig No.1, that can be specifically enforced. When no specific agreement that can be enforced is shown, no relief of Specific Performance can be granted in the Suit. Conseque n tly, no interim relief in aid of the final relief can also be granted.
39. The Plaintiffs' seminal case, therefore, falls. Further rights created by Defenda nt No.1 must, therefore, be allowed to prevail. The Plaintiffs have failed to show any legal right to specifically enforce their agreement with Defenda nt No.1. It is incomprehe n sible how the Plaintiffs can specifically enforce an agreement between Defendan t No.3 and Defenda nt No.1 to which they were not parties. The agreement with Defenda nt No.7 results as a matter of course purs u a n t to the negotiations between the Plaintiffs and Defenda nt No.1 having failed.
::: Downloaded on - 09/06/2013 13:42:38 ::: 2540. Mr. Madon has sought to show how the earnest amou nt was sought to be paid by Defenda nt No.7 on 25 th November, 2006 before the final notice of termination given by the Attorneys of Defenda nt No.1 to the Plaintiffs on 28 th November, 2006, in which that fact is not mentioned.
Defenda nt No.1 were free to enter into any agreement with the third party, since their negotiations had failed with the Plaintiffs. So soon as any contract u al relations hip came to be made by Defendan t No.1, their Attorneys have retur ned the Plaintiffs' cheque with the agreed amoun t of interest.
There is no legal duty upon Defenda nt No.1 to disclose their further contract with any other party. Mr. Madon has also sought to show how and when agreement between the Defenda nt No.1 and Defenda nt No.7 was got registered and when the stamp duty was paid. Aside from seeing that all that was after the last meeting between Plaintiffs and Defenda nt No.1 on 24 th November, 2006, it becomes immaterial for this Court to consider those dates. Since there were no legal rights that the Plaintiffs could seek to enforce under their initial MOU with Defenda nt No.1 or upon the MOU between Defendan t No.3 and Defendant No.1, the acts that culminated into the final contract between the Defenda nt No.1 and Defenda n t No.7 need not be considered by the Court. The fact remains that the negotiations did not ::: Downloaded on - 09/06/2013 13:42:38 ::: 26 culminate into an agreement in favour of the Plaintiffs. The negotiations have culminated into the Joint Development Agreement between Defenda nt No.1 and Defendant No.7.
41. In fact I have been told that the Plaintiffs failed to obtain an ad- interim order of injunction and hence, the further agreement came to be made.
42. It is impossible to grant specific performa nce of the initial MOU dated 18 th May, 2006 to the Plaintiffs. All other agreement s follow accordingly.
43. It is, therefore, too late in the day to grant any injunction to the Plaintiffs also.
44. The Notice of Motion is, therefore, dismissed with no order as to costs.
(SMT. ROSHAN DALVI, J.) ::: Downloaded on - 09/06/2013 13:42:38 :::