Bombay High Court
Rohit A. Kapadia And Sandhya R. Kapadia vs Perviz J. Modi on 14 July, 2016
Author: Revati Mohite Dere
Bench: V. M. Kanade, Revati Mohite Dere
app.564.15.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 564 OF 2015
IN
SUIT NO. 603 OF 2005
1. Rohit A. Kapadia,
2. Sandhya R. Kapadia,
both of Mumbai, Indian Inhabits,
residing at 12-B, Paradise Apartments,
44, Nepean Sea Road, ...Appellants
Mumbai - 400 036 (Orig. Plaintiffs)
Versus
Perviz J. Modi,
having her address at C-32, 3rd Floor,
C-Block, Darshan Apartments,
Mount Pleasant Road, ... Respondent
Mumbai - 400 006 (Orig. Defendant)
Mr. Iqbal Chagla, Sr. Counsel a/w Mr. Pradeep Sancheti, Sr. Counsel, Mr.
Robin Jalsinghani, Mr. Ajit Shukla, Ms. Heenal Desai, Mr. Yash Kapadia
i/b M/s. Dhru & Co. for the Appellants/Plaintiffs
Mr. Joseph Kodianthara, Sr. Counsel a/w Mr. Ricab Chand I/b Mr. Rakesh
Sawant for the Respondent/Defendant
CORAM : V. M. KANADE &
REVATI MOHITE DERE, JJ.
RESERVED ON : 3rd MARCH, 2016
PRONOUNCED ON : 14th JULY, 2016
JUDGMENT (Per Revati Mohite Dere, J.) :
1. This appeal is directed against the judgment and order dated 9 th June, 2015 passed by the learned Single Judge of this Court in Suit No. 603 SQPathan 1/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc of 2005 by which the appellants' suit came to be dismissed. The two short questions that essentially arise for consideration in the present appeal are :-
(i) whether or not there was a concluded contract in terms of the correspondence exchanged by emails between the appellants/ plaintiffs and the respondent/defendant, in particular, emails dated 19th and 20th December, 2004?
(ii) whether the unsigned Memorandum of Understanding (MOU) which is at Exhibit `O' to the Plaint could be said to be a concluded contract and as such valid, subsisting and binding on the respondent/defendant?;
2. For convenience, hereinafter, the appellants will be referred to as `plaintiffs' and the respondent as the `defendant'.
3. Few facts which are necessary to decide the said controversy are as under :
The plaintiffs were looking to buy a flat at Nepean Sea Road/Malabar Hill area in or around August 2004. Accordingly, the plaintiffs' broker one Mr. Jayesh Shah informed the plaintiffs that a flat SQPathan 2/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc belonging to the defendant was available for sale and that he could arrange for a meeting with the broker/representative of the defendant. Pursuant thereto, a meeting was arranged at Hotel President at Mumbai in or about August 2004, where the Plaintiffs met Mr. Jayesh Shah-the Plaintiffs' broker, one Mrs. Villoo Kapadia - the defendant's sister and Mr. Salim Merchant - defendant's broker. At the said meeting, as the plaintiffs expressed their desire to purchase the property being Flat No. C-32, 3 rd Floor, Darshan Apartments, Malabar Hill Co-operative Housing Society, Mount Pleasant Road, Mumbai (hereinafter referred to as `the suit flat' for the sake of brevity), the defendant's sister - Mrs. Villoo Kapadia gave the plaintiffs, the email address of the defendant and her husband, who were residing in Canada at the relevant time. Pursuant thereto, correspondence was exchanged between the plaintiffs and the defendant (through her husband Mr. Jamshed Modi) via emails. Through the emails, the price for purchase of the flat was negotiated and the parties mutually agreed on a price of Rs. 3.33 crores. The plaintiff No. 1 by his email dated 19 th December, 2004 (Exhibit `P-1') offered to buy the suit flat for Rs. 3.33 crores and the said email was acknowledged by the defendant through her husband by an email dated 20th December, 2004 (Exhibit `P-2'). In the said SQPathan 3/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc email, the defendant's husband expressed his happiness upon having reached an agreement on the price. By the very same email, the defendant also agreed to give possession of the suit flat to the plaintiffs, by the end of February, 2005.
Thereafter, a series of emails were exchanged between the parties i.e. the plaintiffs and the defendant, with respect to the modalities for completing the said transaction. The plaintiffs emailed a draft Memorandum of Understanding ("MOU") to the defendant in terms of the alleged concluded agreement for sale of the suit flat. The plaintiffs asked the defendant to go through the said MOU and to make track changes in it, if required.
Thereafter, the defendant and her husband flew down from Canada to India. A meeting was held on 1st February, 2005 at the plaintiffs' residence, which was attended by the defendant, her husband Mr. Jamshed Modi, Mr. Rakesh Sirsalewala (Tax advisor of the defendant and her husband), the Plaintiffs, their family members and their solicitor Mr. Shriraj Dhruv. At this meeting, the defendant and her husband had brought a copy of the draft MOU, sent by the plaintiffs, with certain track SQPathan 4/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc changes made in it. All the terms and conditions stipulated in the draft MOU (Exhibit `O') were discussed and finalized between the parties, including that the plaintiffs would pay 10% of the price as earnest money to the defendant, instead of keeping the same in escrow. In the said meeting, the defendant informed that she would now hand over possession of the suit flat by the end of March, 2005, instead of February 2005 as agreed earlier.
The plaintiffs requested a few days time to consider whether the said variation was acceptable to them and ultimately, the said variation was accepted by the plaintiffs. On 8th February, 2005, after a telephonic discussion between the 1st plaintiff and Mr. Rakesh Sirsalewala, the plaintiffs forwarded a final revised MOU, incorporating the changes as discussed and finalized, to Mr. Rakesh Sirsalewala, through their Advocate's email dated 8th February, 2005 (Exhibit `D-7'). On 9 th February, 2005, Mr. Rakesh Sirsalewala, informed the plaintiffs on telephone, that the defendant was having second thoughts about the deal and that the first plaintiff should call the defendant next morning with regard to the same.
On 10th February, 2005, plaintiff No. 1 visited the defendant's residence and offered to pay 10% of the earnest money for the suit flat, before the MOU was executed. At this meeting, the defendant informed the first plaintiff that SQPathan 5/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc as some members of the Society were trying to sabotage the transaction, she was having second thoughts about the deal and whether or not to proceed with the said transaction. On 11th February, 2005, the defendant telephoned the first plaintiff and informed him, that they have decided not to go ahead with the transaction.
Pursuant to the aforesaid, the plaintiffs by their advocate's letter dated 11th February, 2005 (Exhibit `P-11'), interalia, called upon the defendant to specifically perform the concluded contract for sale of the suit flat. A letter dated 12th February, 2005 was also addressed by the plaintiffs to the Secretary of the concerned Society to confirm as to whether the apprehensions of the defendant regarding certain Committee Members, intending to sabotage the concluded contract, were correct and requested for the names of the said persons.
The defendant, by an Advocate's letter dated 28th February, 2005, replied to the plaintiffs' Advocate's letter and denied any concluded contract as alleged.
Pursuant to the aforesaid, the plaintiffs filed Suit No. 603 of 2005 in this Court, praying therein, that the concluded contract in terms of SQPathan 6/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc the unsigned MOU, being Exhibit `O' to the plaint, be declared as valid, subsisting and binding on the defendant, amongst other reliefs. Certain interim prayers were also sought i.e. that the defendant be restrained from creating any third party rights in the suit flat. Upon the plaintiffs' depositing an amount of Rs. 30 lakhs in Court, the defendant was restrained by an interim order from creating third party rights in respect of the suit flat.
The defendant filed her written statement. It was contended by the defendant, that there was no concluded contract, as alleged by the plaintiffs. It was further contended that it was always intended that the parties would be bound only by an agreement in writing, which was never done. The learned Single Judge of this Court framed the following issues :
"(1) Whether the Plaintiffs prove that at the Meeting held on 1st February 2005, the draft MOU (Exh. 'O') was discussed and the terms thereof finalized, agreed and accepted by the parties as set out in Para 5 of the Plaint?
(2) If the issue No.1 is answered in the affirmative, whether the Plaintiffs prove that the contract entered into between the Plaintiffs and the Defendant is capable of specific performance?
(3) Whether the Plaintiffs prove that they were and are ready and willing to perform their part of the contract for the purchase of the suit property?SQPathan 7/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 :::
app.564.15.doc (4) What reliefs?"
After the aforesaid issues were framed, the defendant filed Chamber Summons and sought to amend the written statement. The said Chamber Summons was allowed, pursuant to which, paragraphs 23A and 23B were added to the written statement.
Thereafter, the learned Single Judge, vide order dated 9 th April, 2013 framed additional issues, consequent to the amended written statement. The additional issues framed were as under :
"3(a) Whether the Plaintiffs prove that they are entitled to a decree of performance?
3(b) Whether the Defendant proves the hardship as alleged in paras 23A and 23B of her amended written statement?
3(c) Whether by reason of the alleged hardship, discretion to grant specific performance should not be exercised?
3(d) In the event of the Court not granting specific performance in favour of the Plaintiffs, whether the Plaintiffs are entitled to compensation in lieu of specific performance."
It was recorded in the order, that issue No. 3(d) relating to compensation in lieu of specific performance would be decided only in the SQPathan 8/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc event of the Court not granting specific performance in favour of the plaintiffs.
The plaintiffs, in support of their case, examined PW 1 -
Mr. Rohit Kapadia (plaintiff No. 1). The defendant examined her husband Mr. Jamshed Modi (DW-1) and their Tax Advisor Mr. Rakesh Sirsalewala (DW-2).
The learned Single Judge, after hearing the parties, was pleased vide judgment and order dated 9th June, 2015 to answer all the issues in the negative and was pleased to dismiss the Suit with no order as to costs. The plaintiffs, aggrieved by the aforesaid order, have filed the present appeal.
4. Mr. Chagla, learned Senior Counsel for the plaintiffs submitted that the correspondence i.e. exchange of emails between the parties, in particular, the emails dated 19th and 20th December, 2004, clearly reveal that there was a concluded contract between the parties i.e. the plaintiffs and the defendant, inasmuch as, the price was fixed, the property was identified and the date of possession was finalized. He submitted that the written contract or agreement was only a formality and was not a term of the bargain. He SQPathan 9/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc relied on the said emails exchanged between the parties in support of his submission. He submitted that what the parties intended was to bind themselves till a formal agreement was entered into. He submitted that all the three per-requisites of a binding/concluded contract were present in this case and that the MOU which was to be entered into subsequently, was only a formality. He submitted that the small/minor details in the MOU were not of such a nature that they could not be sorted out between the parties or by the Courts. He relied on the following judgments in support of his submission;
Kollipara Sriramulu vs. T. Aswatha Narayana 1;
Rameshchandra Lalbhai & Anr. vs. Chinubhai Lalbhai 2; Gostho Behari Sirkar vs. Surs Estates Ltd.3 and Trimex International FZE Ltd. vs. Vedanta Aluminum Ltd.4. According to Mr. Chagla, it is well settled that, it is a question of construction, whether the execution of a further document in writing between the contracting parties is a condition or term of the bargain or whether, it is a mere desire of the parties as to the manner in which the transaction already agreed to, will go through. According to the learned Senior Counsel, given the said legal position, if the parties were desirous that they would be bound only upon signing an MOU, they would 1 AIR 1968 SC 1028 2 AIR (31) 1944 Bombay 76 3 AIR 1960 Calcutta 752 4 (2010) 3 SCC 1 SQPathan 10/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc have made it known in the emails which were exchanged between the parties on 19th and 20th December, 2004 i.e. when an offer was made and when the offer was accepted, resulting in a concluded contract. He submitted that entering into an MOU was never made a condition of the bargain. He relied on certain parts of the cross-examination of Mr. Jamshed Modi (defendant's witness) in support of his submission. According to the learned Senior Counsel, once a concluded contract was arrived at by exchange of emails, subsequent correspondence and conduct was irrelevant and not admissible, in order to determine whether or not the emails gave rise to a concluded or binding contract. Accordingly, he prayed that the impugned judgment and order be quashed and set-aside and that a decree of specific performance be granted in favour of the plaintiffs.
5. Per contra, Mr. Kodianthara, learned Senior Counsel for the defendant vehemently contended that no interference was warranted in the impugned judgment and order of the learned Single Judge. He submitted that the emails exchanged between the parties, cannot be construed, by any stretch of imagination, to be a concluded contract. He submitted that what was clearly understood by and between the parties, was that the contract SQPathan 11/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc would come into existence only after entering into an MOU (written contract/agreement). He relied on several portions and parts of the emails/correspondence, to highlight the intention of the parties, that the parties were to be bound only on signing of a written contract/MOU.
According to Mr. Kodianthara, the plaintiffs cannot be permitted to abandon their case and/or relief sought for in the plaint and set up a totally different case on the basis of an alleged antecedent contract arising out of an exchange of emails, in particular, emails dated 19 th and 20th December, 2004. He submitted that all the emails exchanged between the parties will have to be read as a whole, to understand what was intended by the parties.
The learned Senior Counsel also relied on the evidence led by both, the plaintiffs and the defendant in support of his submission to show the intention of the parties. He submitted that the MOU (Exhibit `O'), which is admittedly an unsigned document cannot be said to constitute a concluded contract and as such a specifically enforceable contract. He submitted that admittedly, no consideration was paid by the plaintiffs to the defendant. He submitted that even the balance of convenience and hardships are clearly in favour of the defendant, inasmuch as, subsequent thereto, the plaintiffs purchased a flat for their daughter. He submitted that the defendant and SQPathan 12/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc her husband are senior citizens, above 70 years of age. According to the learned Senior Counsel, considering the harsh winters in Canada, the defendant has decided to stay in Mumbai in the suit flat, which is the only residence she has. He accordingly submitted that the appeal be dismissed with costs in favour of the defendant. Mr. Kodianthara relied on several judgments in support of his submission; Ganesh Shet vs. Dr. C.S.G.K Setty & Ors.5; Kollipara Sriramulu vs. T. Aswathanarayana (supra); Rickmers Verwaltung GMBH vs. Indian Oil Corporation Ltd. 6; Kalpataru Properties Pvt. Ltd. vs. Majithia Nagar Co-operative Housing Society Ltd.7 and K. Narendra vs. Riviera Apartments' (P) Ltd.8.
6. We have heard learned Senior Counsel for the plaintiffs and the learned Senior Counsel for the defendant at length and with their assistance, have gone through all the relevant documents and evidence of the witnesses. Having given our anxious consideration to the submissions and the material on record, we are firmly of the view that the appeal is sans merits and ought to be dismissed.
5 AIR 1998 SC 2216 6 (1999) 1 SCC 1 7 Appeal (Lodging) No. 464 of 2014 8 (1999) 5 SCC 77 SQPathan 13/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc
7. At the outset, we would like to consider, what was the plaintiffs case? Was the concluded contract sought on the basis of the unsigned MOU (Exhibit `O') purportedly finalized in the Meeting of 1 st February, 2005 or was it based on the correspondence, i.e. exchange of emails between the plaintiffs and the defendant, in particular, emails dated 19th and 20th December, 2014? and whether now, in a suit for specific performance, the plaintiffs can be permitted to fall back and enforce an alleged antecedent contract based on emails, when infact, the prayer is for declaring concluded contract on the basis of the unsigned MOU (Exhibit `O') to the plaint? In order to decide the said controversy, we would like to refer to the prayers in the plaint. The substantive prayers sought by the plaintiffs in the plaint are :
"(a) this Hon'ble Court be pleased to declare that the concluded contract in terms of the unsigned MOU being Exhibit 'O' to the Plaint, arrived at between the plaintiffs and the Defendant is valid and subsisting and binding on the Defendant;
(b) the Defendant be ordered and decreed to specifically perform the said concluded contract contained in terms of the unsigned MOU being Exhibit 'O' to the Plaint and for the said purpose do all acts, deeds and things and execute all necessary documents, papers, applications etc.;
(c) this Hon'ble Court be pleased to grant a permanent injunction restraining the Defendant by herself and or through SQPathan 14/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc her servant, and or agents from in any manner selling, alienating, encumbering, transferring, disposing off, parting with possession and/or creating any third party rights, in respect of the suit property, more particularly, described in Exhibit A to the plaint in four of any person or persons other than the plaintiffs;
(ci) without prejudice to the aforesaid, in the event of this Hon'ble Court holding that the plaintiffs are entitled to specific performance, but in exercise of its discretion, decline to grant the same, the defendant be ordered and directed to pay the plaintiffs such compensation in lieu of specific performance, as may be determined by this Hon'ble Court."
8. A perusal of the plaint reveals that in Para 3, the correspondence exchanged between the plaintiffs and the defendant has been set out. Relevant portions of paras 4, 5, 6 and 10 of the plaint reads thus :
"4. Towards the end of January 2005, the Defendant and her husband Mr. Jamshed Modi came to Mumbai and a meeting was held at the residence of the Plaintiffs in the evening of 1 February 2005 for the purposes of finalizing draft MOU and the modalities for completing the aforesaid transaction. ..........."
"5. At the meeting held on 1 February 2005, the draft of the MOU was discussed between the parties and all the terms and conditions of the said MOU were finalized agreed and accepted by the parties including that the Plaintiffs would pay 10% of the price as earnest money to the Defendant instead of keeping the same in escrow. The Defendant suggested that she would be in a position to hand over possession only by the end of March 2005 instead of the agreed time of end of February 2005. The Plaintiffs objected to the said variation and requested the Defendant to stick to the agreed time of February 2005. The Defendant however insisted SQPathan 15/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc that such a variation was required by them because of some difficulties of their own. The Plaintiffs requested a few days time to consider whether the said variation was acceptable to the Plaintiffs. Ultimately, the 1st Plaintiff in a telephonic conversation with the husband of the Defendant agreed to possession being given by the end of March 2005. On 8 February 2005, after a telephonic discussion between the 1st Plaintiff and the said Rakesh Sirsalewala, the Plaintiffs forwarded a final revised MOU incorporating the above changes to the said Rakesh Sirsalewala by their Advocates email dated 8 February 2005. The Plaintiffs have also engrossed the final revised MOU and the same is ready for execution. Hereto annexed and marked Exhibit `N' is a copy of the said email dated 8 February 2005. Hereto annexed and marked Exhibit `O' is the engrossed MOU."
"6. In the circumstances, the Plaintiffs submit that there is a concluded contract for the sale of the suit property between the Plaintiffs and the Defendant whereby the Defendant has agreed to sell to the Plaintiffs the suit property for price of Rs. 3.33 Crores on the terms and conditions contained in the MOU being Exhibit `O' hereto. The execution of the MOU was only a formality."
"10. The Plaintiffs accordingly submit that there is a valid and concluded contract for the sale of the suit property by the Defendant to the Plaintiffs in terms of the unsigned MOU being Exhibit `O' hereto. The Plaintiffs have always been ready and willing to complete the said concluded transaction but the Defendant has evinced her desire to renege from the same. The Plaintiffs submit that the said concluded contract is binding on the Defendant and the Defendant is bound and liable to specifically perform the said concluded contract. ............. "
9. In the light of the averments and reliefs sought in the plaint, the question before us, is whether there are any inconsistencies in the pleadings and arguments and whether a new case is sought to be pleaded, as contended by Mr. Kodianthara, learned Senior Counsel for the defendant.
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10. Mr. Chagla, learned Senior Counsel for the plaintiffs submitted that there were no inconsistencies as alleged. He relied on paras 3.3, 3.4 of the plaint to show that there was a concluded contract by exchange of emails. The portions on which reliance was sought are reproduced below:
"3.3. ........ by his email dated 19 December 2004, the 1 st Plaintiff confirmed that the Plaintiffs would buy the suit property for a price of Rs. 3.33 Crores. ......................"
"3.4. By an email dated 20 December 2004, the Defendant acknowledged the 1st Plaintiff's email dated 19 December 2004 and recorded the fact that an agreement was reached between the Plaintiffs and the Defendant. By the said email, the Defendant also assured the Plaintiff that subject to her husband being given medical clearance, she with her husband would be reaching Mumbai during January 2005 and that she will be giving possession of the suit property by the end of February 2005. The Defendant further instructed the Plaintiffs to fax the draft Agreement to her daughter's office facsimile number during the days and times specified in the said email. It was suggested by the Defendant that she would sign the necessary documents and refax the same back to Mumbai. It was further suggested that the Plaintiffs may, in her absence, give the Cheque for purchase price to the said Mrs. Villoo Kapadia. Hereto annexed and marked Exhibit `C' is a copy of the said email dated 20 December 2004.
By her further email dated 21 December 2004, the Defendant requested the Plaintiffs to first email whether the Plaintiffs were faxing the Agreement, and if so, the necessary communication may be given by the Defendant to her daughter. Hereto annexed and marked Exhibit `D' is a copy of the said email dated 21 December 2004. By his email dated 22 December 2004, the 1 st Plaintiff informed the Defendant that he would be emailing/faxing the necessary Agreement by 9 January 2005."SQPathan 17/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 :::
app.564.15.doc Mr. Chagla also relied on paras 4 and 5 of the affidavit of evidence of the 1st plaintiff (PW 1). The relevant portion of the affidavit of evidence on which reliance was sought, reads thus:
"4. I say that thereafter I started communicating with the Defendant through her husband Mr. Jamshed Modi through emails. In or around November 2004, ourselves and the Defendant reached an Agreement on price Rs. 3,33,00,000/-. Thereafter, upon the request of the Defendant, I confirmed in writing by my email dated 19th December, 2004 that I would buy the Suit flat at a price of Rs. 3,33,00,000/-."
"5. I say that the Defendant by her email dated 20 th December, 2004 confirmed that an Agreement and stated "I am indeed happy that we have reached agreement on price". By the said email it was further informed that the Defendant would try to reach Mumbai from Canada during January, 2005, that she would handover possession of the Suit Flat to ourselves by end of February, 2005............"
(Emphasis supplied) He submitted that PW 1 had reiterated the same, in his answer to Question No. 48 in cross-examination. Question No. 48 and its answer reads thus :
"Q. 48 Is it true that the basis of your suit is the draft MOU sent by your solicitor to the defendant's Chartered Accountants containing the alleged agreement stated to be arrived at on 1 st February 2005?
Ans. The basis of my suit is that agreement is arrived at when we identified the property and agreed for a price. ......."
He thus submitted that it was being consistently contended (even during oral arguments) that there was a concluded contract on the SQPathan 18/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc basis of the emails exchanged between the plaintiffs and the defendant.
According to Mr. Chagla, the emails show that all the three essential elements i.e. `price', `identity of property' and `time for performance' were agreed upon, and hence, the said correspondence would constitute a concluded contract in the eyes of law.
11. Mr. Kodianthara, Senior Counsel for the defendant contended that the plaintiffs' case was for specific performance of the unsigned MOU (Exhibit `O') to the plaint. He submitted that the relief claimed was consistent with the pleadings and therefore, the plaintiffs cannot now come up with a new case, claiming specific performance of a concluded contract on the basis of exchange of correspondence/emails.
12. We have perused the material in this regard. When the plaint was filed, it was specifically prayed on the basis of the averments in the plaint, as under -
"(a) to declare that the concluded contract in terms of the unsigned MOU being Exhibit `O' to the plaint, arrived at between the plaintiffs and the defendant is valid and subsisting and binding on the defendant;SQPathan 19/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 :::
app.564.15.doc
(b) the defendant be ordered and decreed to specifically perform the said concluded contract in terms of the unsigned MOU being Exhibit `O'."
A perusal of the averments in the plaint, more particularly paras 4 to 6 also reveal that what was sought to be enforced was the unsigned MOU (Exhibit `O'). The reference to correspondence exchanged through emails made in para 3, clearly appears to be, to place on record the chronology of events, that led to the finalization of the MOU (Exhibit `O').
There is not a single averment in the plaint, pleading a concluded contact on the basis of the correspondence exchanged between the parties through emails or an oral agreement. Even the evidence on record of the witnesses does not show that the correspondence exchanged between the parties i.e. emails constituted a concluded contract. As to what was intended by the parties, we intend to deal with the same, a little later.
13. The Apex Court in the case of of Ganesh Shet vs. Dr. C.S.G.K. Setty & Ors.9, had an occasion to deal with a similar issue. In that case, the plaintiff had filed a suit for specific performance of the agreement of sale dated 25th January, 1984 entered into at Delhi and for possession and 9 AIR 1998 SC 2216 SQPathan 20/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc for permanent injunction restraining alienation by defendants, of the suit property therein. The defendant in his written statement had contended that although there was correspondence between the parties, negotiations had not reached the final stage and hence there was no concluded contract. The trial Court, after considering the evidence held; that a contract was concluded at Delhi between the parties on 25 th January, 1984 for Rs. 5,00,000/- as per Exhibit `P-3' draft; that the said agreement was not materially altered later; and that the sale deed was agreed to be executed by 30th June, 1984. The defendant appealed in the High Court and the High Court reversed the decree and dismissed the suit. In appeal, the Apex Court formulated four points that arose for consideration:
"(1) Whether there was a concluded contract between the parties on 25.1.1984 at Delhi when plaintiff and PW 2 (Mr. Kalyankar) met the 1st defendant at his Delhi residence?
(2) Having not agreed in the High Court to amend the plaint and plead that there was a concluded contract at Bangalore on 28.4.84 and having thus refused to seek for a relief for specific performance of an agreement dated 28.4.84, whether the plaintiff could contend that there was an agreement of sale dated 28.4.84 at Bangalore?
(3) What are the legal principles applicable to suits for specific performance under section 20 of the Specific Relief Act, 1963 where there is variation between pleadings and evidence in regard to the date or other terms of the contract? To what extent can relief be given under the heading 'general relief in suits for specific performance under Order 7 Rule 7 CPC?SQPathan 21/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 :::
app.564.15.doc (4) Alternatively, whether, on the plaint as it stands, and the prayer made therein without seeking amendment, the plaintiff can get a decree for specific performance of an agreement dated 28.4.84 said to have been concluded at Bangalore?"
The plaintiffs urged before the Apex Court, that the plaintiffs must be given the relief in respect of the agreement, which according to him, had concluded at Bangalore on 28th April, 1984 and that specific performance could be granted in respect of such an agreement. It was observed, that though the plaintiffs were given an opportunity to amend the plaint, the same was not accepted. It was urged on behalf of the plaintiffs, that without amendment of the plaint, plaintiffs could ask the Court to construe the pleadings liberally, even if there was no specific reference to a contract being concluded at Bangalore on 28th April, 1984. It is in this light of the matter, that the Apex Court has observed in Paras 15, 16, 17 and 35 as under :
"15. The question is whether, when parties have led evidence in regard to a contract not pleaded in the evidence, relief can be granted on the basis of the evidence and whether the plaintiff can be allowed to give a go-by to the specific plea in the plaint. Is there any difference between suits for specific performance and other suits?
16. It appears to us that while normally it is permissible to grant relief on the basis of what emerges from the evidence - even if not pleaded, provided there is no prejudice to the opposite party, such a principle is not applied in suits relating to specific SQPathan 22/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc performance. In Gonesh Ram v. Ganpat Rai, AIR 1924 Cal 461, the Calcutta High Court has considered the same question. There the agreement pleaded was not proved but plaintiff wanted to prove an antecedent agreement based on correspondence. It was held that the plaintiff, in a suit for specific performance, could not be permitted to abandon the case made out in the plaint and to invite the Court to examine whether a completed agreement may or may not be spelt out of the antecedent correspondence. In that connection Sir Asutosh Mookerjee observed:
"The Court would not in a case of this description permit the plaintiffs to depart from the case made in the plaint as the Court discourages, as a rule, variance between pleading and proof. The test to be applied in such cases is whether if the variance were permitted in favour of the plaintiffs, defendants would be taken by surprise and be prejudiced thereby................. This rule is applied with special strictness in cases of specific performance of contracts. In Hawkins v. Maltby, (1867) 3 Ch A 188, one contract was alleged and another was proved, with the result that the bill was dismissed. No doubt where there has been part performance, the Court may struggle with apparently conflicting evidence rather than dismiss the suit. This appears to have been the view adopted by Lord Cottenham in Mundy v. Jolliffe, 5 My & Cr 167 : (1839) 9 LJ Ch 95. In the case before us there is no question of part performance".
17. A.N. Ray (as he then was) in Md. Ziaul Haque v. Calcutta Vyapar Pratisthan, AIR 1966 Cal 605, referred to the special rule applicable to suits for specific performance and also relied upon Hawkins v. Maltby, (1867) 3 Ch A 188. The learned judge observed (Para 31 of AIR) :
"In Nil Kama's case 19 Cal WN 933 : AIR 1916 Cal 774, it was said that when a plaintiff alleged a contract of which he sought specific performance and failed to establish in the Court would not make a decree for specific performance of a different contract. Reliance was placed on Hawkins v. Maltby, reported in (1867) 3 Ch A 188.SQPathan 23/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 :::
app.564.15.doc .......Emphasis was rightly placed on the aspect of the plaintiff's case pleaded that there was an agreement in the month of August and that the plaintiff failed to prove that case and the plaintiff having completely abandoned that case of agreement in the month of August, any attempt on behalf of the plaintiff to make recourse to May agreement would be to have a decree for specific performance of an agreement which was not the agreement of the parties according to the plaintiff".
The above special principles applicable to cases of specific performance can be also gathered from standard works under the England (English) Law, where the above English cases and other cases have been cited."
"35. Applying the legal principles referred under Point 3 to the above facts it will be noticed - even assuming that a contract dated 28-4-1984 at Bangalore is proved, which in our view, is not proved - that this case does not fit into the exceptions stated by Fry on Specific Performance inasmuch as this is not a case where there has been part performance by delivery of possession. Nor can it be said that the variation between pleading and proof is immaterial or insignificant. Plaintiff has also refused to amend the plaint to seek relief on the basis of an agreement dated 28-4-84, keeping the plaint as it is."
After considering the material on record and the law in that regard, the Apex Court dismissed the plaintiff's appeal.
14. In the present case, the prayer is for specific performance of an unsigned MOU (Exhibit `O') to the plaint. Although, there are references made to correspondence exchanged through emails, there is no averment or SQPathan 24/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc prayer claiming concluded contract on the basis of the said emails. The reference to emails in the plaint, is only to place on record the chronology of events. As is evident from the record, no amendment of the plaint was sought. It is pertinent to note, that the evidence on record has also proceeded on the premise that the MOU (Exhibit `O') was a concluded contract. It would be apposite to reproduce the answers given by 1st plaintiff in his cross-examination, in particular, to Question Nos. 11, 15 and 16. The said questions and answers are reproduced hereinbelow :
"Q.11 what is the significance of the words "on completion of the signing of the agreement by both the sides'?
Ans. This was document draft which was to be signed by the defendant in Canada."
Q.15 Is it true that the draft of the first MOU was done by you without any involvement of the Defendant at that stage?
Ans. Yes Q.16 Is it true that you expected some changes to be made by the Defendant to the draft?
Ans. Yes"
The plaintiffs in their suit for specific performance now seek to rely on an antecedent correspondence i.e. exchange of emails, in particular SQPathan 25/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc emails dated 19th and 20th December, 2014 and claim that the same constitutes a concluded contract. Normally, it is permissible to grant relief on the basis of the material which emerges from the evidence - even if not pleaded, provided no prejudice is caused to the opposite side. This principle, however, as observed by the Apex Court is not applied to suits relating to specific performance. In the facts, we are of the opinion that the plaintiffs neither having pleaded concluded contract, on the basis of emails exchanged between them nor having prayed for a declaration of a concluded contract in terms of the said emails, nor having led evidence in that regard, cannot now in a suit for specific performance, claim declaration of a concluded contract on the basis of emails exchanged between them.
15. Even though we have recorded the aforesaid finding, we propose to examine whether the correspondence i.e. exchange of emails, in particular, emails dated 19th and 20th December, 2004, constitute a concluded contract, as is sought to be contended by Mr. Chagla, learned Senior Counsel for the plaintiffs. According to Mr. Chagla, there was a valid and subsisting written contract contained in the said emails, for sale of the suit flat between the plaintiffs and the defendant for a price of Rs. 3.33 SQPathan 26/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc crores to be performed (delivery of possession) by end of February, 2005.
Mr. Chagla contended that the three essential elements to arrive at a concluded contract i.e. price, identity of property and time for performance were agreed upon. He relied on certain portions of the emails in support of the same, in particular, the sentence in the email dated 20 th December, 2004 (Exhibit P-2), wherein, the defendant has stated that " I am, indeed, happy that we have reached agreement on the price." Per contra, Mr. Kodianthara submitted that it was too far fetched to even suggest, that there was a valid and subsisting contract disclosed in the emails dated 19 th and 20th December, 2014. He submitted that it was always intended and understood, that the parties would be bound only by a written agreement, signed by the parties, which was not done. He relied on the defendant's husband's affidavit of evidence which reads as under :
"It is true that there were exchange of emails between Mr. Rohit Kapadia and myself wherein based on my judgment the price suggested was broadly found to be acceptable. However the defendant had never expressly agreed on any aspect. The entire issue even as understood and indicated by Mr. Rohit Kapadia, was to be finalized through written Memorandum of Understanding and Agreement to be signed by the plaintiffs and the defendant."
The question before us, is what was intended by the parties? Was the execution of the MOU only meant to formalize the agreement already SQPathan 27/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc arrived at between the parties, on the basis of the correspondence i.e. exchange of mails, more particularly, emails dated 19 th and 20th December, 2004? Or as contained in the unsigned MOU (Exhibit `O') purportedly finalized in the Meeting of 1st February, 2005? Or whether the parties had agreed to bind themselves only by a signed contract/MOU and all further obligations were to be complied with only after the signing of the said contract/MOU?
16. In order to see what was the `intention' of the parties, it would be necessary to reproduce the relevant emails exchanged between the parties.
Vide email dated 31st August, 2004, the defendant's husband disclosed to the plaintiffs that they planned to sell their flat and expected Rs. 3.41 crores for it.
Vide email dated 4th September, 2004, the plaintiffs offered the defendant Rs. 3.20 crores for the suit flat. The plaintiffs in the said email stated :
"............... At any rate, I would earnestly request you that a meaningful dialogue can only be entered into between us either if SQPathan 28/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:32 ::: app.564.15.doc we meet in person or if we talk thru a person duly authorized by you to finalize negotiations across the table. I think the process of exchanging emails is not conducive to an immediate transaction.
I, for one, am very much in favour of a quick decision and a quicker conclusion. Whosoever purchases the apartment, whether myself (I hope) or someone else, is looking to some delay for the paperwork and an even longer hiatus to do up the apartment!! I would appreciate if you could see your way to an early reply."
Vide email dated 14th December, 2004, the plaintiffs sent the following email to the defendant :
"We are now approaching January 2005. You had indicated last that you could give possession only in the end of January.
Does this stand even today? I am considering another property also so it is rather important for me to know. I am sure the price should not present a difficulty for two of us.
I would appreciate an early reply from you."
Vide email dated 19th December, 2004, addressed by the plaintiff No. 1 to the defendant, the plaintiff has stated ;
" ........ As per your request, I hereby state, in writing, that I intend to buy your flat on the third floor in Darshan, for the price of Rs. 3.33 crores.
There is only one thing I ask for in return - - all cooperation on your end in expediting the sale of the flat to me and giving me possession.
To that end, I would appreciate if you could allow me to go ahead with drafting an agreement here in Mumbai, which I could send you in Canada for your signature. This would save us SQPathan 29/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc considerable time until the point that you are able to clear your medical formalities and fly here.
I would also request you to come here by end-Jan at the latest; and to take no more than a month to give us possession. In other words, I am quite keen to occupy the flat by the end of February 2005.
There is a hurry on my part because this is a flat for my daughter and my son-in-law, who are currently staying in temporary accommodation and are desperately in search of a permanent home to settle down in.
............. I would appreciate some written assurance from your end, too, that you will give me possession at the soonest, by February or earlier. ......................." (emphasis supplied) Vide email dated 20th December, 2004, the defendant's husband responded to the plaintiff No. 1's email dated 19 th December, 2004, as under :
"Thank you for your email of 19th Dec. I am, indeed, happy that we have reached agreement on the price.
.............. If convenient, please fax the draft agreement..............
On completion of the signing of the agreement by both sides, we would like to advise Villoo Kapadia ourselves and request her to hold the deposit cheque given by you and arrange for you to meet with the committee. We will request her to get in touch with you after the agreement is signed.
........................." (emphasis supplied ) Vide email dated 23rd December, 2004, the defendant's husband addressed the following mail to the plaintiff No. 1 :SQPathan 30/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 :::
app.564.15.doc "I note from your email of 22 nd Dec. that you will send the agreement by fax presumably, on 9th January.
I am rather worried on the following points:
1. My wife is expected to sign this agreement- will it already be signed by Payal? Who is the agreement between?
2. We understand then that a requisite deposit is to be made and such deposit is to be held in escrow?
3. After which an introduction is to be arranged with the Darshan committee (Malabar Hill Co-operative Housing Society) whenever they are to meet.
4. We would need time in town before giving possession and since we agreed to try and do so by end February, we see problems if we are not in Bombay by third week of January.
Since my appointment with the surgeon is scheduled for 31st December, we can really make travel arrangements only in January. Even this will be delayed while we wait to see what is in this agreement and whether it means it binds just Perviz as signatory.
I have tried to state very simply what is worrying us, ten thousand miles away and I would appreciate if you took my questions in that light. ................" (emphasis supplied) Vide email dated 26th December, 2004, the plaintiff No. 1 answered the queries raised in the aforesaid email by the defendant's husband as follows: (Plaintiff's answers are in capital letters) :
"I note from your email of 22 nd Dec. that you will send the agreement, by fax presumably, on 9th January.
I am rather worried on the following points :SQPathan 31/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 :::
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1. My wife is expected to sign this agreement- will it already be signed by Payal? Who is the agreement between?
I WILL BE SENDING YOU TWO DOCUMENTS:
THE FIRST WILL BE A MEMORANDUM OF UNDERSTANDING (MOU) WHICH WILL SPELL OUT THE BASIC FACTS OF THE AGREEMENT (PRICE, FLAT DETAILS, ETC) AND STATE THAT WE INTEND TO PURCHASE THE FLAT FROM MRS. MODI. I WILL SEND YOU TWO SIGNED COPIES OF THIS MOU.
AFTER REVIEWING THE SAME, PLEASE SIGN BOTH, KEEP ONE, AND RETURN ONE SIGNED COPY TO ME BY FED EX.
THE SECOND WILL BE A DRAFT OF THE ACTUAL AGREEMENT TO SELL THE FLAT AT DARSHAN. WE CAN DISCUSS ANY CHANGES YOU MIGHT SUGGEST OVER EMAIL/ FAX OR WHEN YOU ARRIVE IN BOMBAY.
THE AGREEMENT WILL BE SIGNED BETWEEN MRS. MODI AND ME (ROHIT KAPADIA).
2. We understand then that a requisite deposit is to be made and such deposit is to be held in escrow?
THAT IS CORRECT. AFTER RECEIVIG A SIGNED COPY OF THE MOU, I WILL PLACE A DEPOSIT IN ESCROW. I SUGGEST A DEPOSIT OF RS. 30 LAKHS TO BE KEPT IN ESCROW.
KINDLY SUGGEST THE NAME OF ANY EMINENT SOLICITOR OF YOUR CHICE WHO CAN HOLD THIS AMOUNT FOR US. IF YOU WOULD SUGGEST A NAME TO ME OVER EMAIL, WE CAN INCORPORATE THE SOLICITOR'S NAME IN THE MOU.
After which an introduction is to be arranged with the darshan committee (Malabar Hill co-operative Housing Society) whenever they are to meet.
YES. HOW DO WE WORK THIS OUT AS YOU WILL BE IN CANADA? WOULD MRS. KAPADIA BE ABLE TO INFORM THE SOCIETY ON YOUR BEHALF AND REQUEST FOR AN SQPathan 32/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc INTRODUCTON? PERHAPS YOU COULD SEND A LETTER OF INRODUCTION BY COURIER ALONGWITH THE SIGNED MOU? WE NEED TO WORK OUT THE DETAILS ON THIS.
4. We would need time in town before giving possession and since we agreed to try and do so by end February, we see problems if we are not in Bombay by third week of January.
.............................................
I COMPLETELY UNDERSTAND YOUR CONCERNS REGARDING THE PLANNING OF YOU TRIP WELL AS YOUR HEALTH. SINCE YOUR DAUGHTER WILL BE IN THE OFFICE ONLY ON JAN 9, I WILL COURIER THE DOCUMENTS TO YOU EARLIER. KINDLY SEND ME YOUR PREFFERED MAILING ADDRESS, AS WELL AS THE EXACT SPELLING OF YOUR WIFE'S NAME AND HER POSTAL ADDRESS IN CANADA SO THAT I CAN INCORPORATE THE SAME IN THE AGREEMENT."
Vide email dated 3rd January, 2005, the defendant's husband sent the following email to the plaintiff No. 1, which was responded to by the plaintiff No. 1 on the very same day. Both these emails are reproduced hereunder :
"Dear Mr. Kapadia, I have been given medical clearance to travel by my surgeon when I saw him on the 31st.
I look forward to the MOU you will be faxing on the 3rd."
"Dear Mr. Modi, I am glad to know that your trip to India has been cleared by your doctor.SQPathan 33/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 :::
app.564.15.doc As per your last letter, you informed me that your daughter was only returning to work on January 9, I thought that I would fax you the MOU at that time.
You have also not replied to the queries raised by me in my last email to you, i.e. your address in Canada, etc. These details are necessary for me to prepare the MOU.
Please reply at the earliest so that we can have the necessary paperwork in place by Jan. 9.
Thanks and regards, Rohit Kapadia"
Vide emails dated 4th January, 2005, the following correspondence was exchanged between the plaintiff and the defendant's husband:
"Dear Mr. Modi, This is to acknowledge receipt of both your emails. We will not send any fax to Niara's office number anymore, but we will send a fax to her home number. The agreement is in the process of being prepared, and now that we have your wife's details, it should be ready in a few day's time. As soon as this happens, we will give you advance notice and then send a fax to you. You can expect news from us in a few days. Please go ahead with your travel plans to India.
Thanks and regards, Rohit Kapadia"
"Dear Mr. Kapadia, Thank you for your email of 4th Jan.SQPathan 34/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 :::
app.564.15.doc I note that the MOU will take some days to prepare and that you will advise when you are ready to fax it to my daughter's home fax number.
The delay is, indeed, unfortunate and we will make our travel plans after receiving and signing the MOU.
Please confirm receipt of the repeat of my email of 26th Dec.
We look forward to your comments regarding an eminent solicitor re. The deposit.
Regards,
Jamshed Modi." (Emphasis supplied)
Vide email dated 6th January, 2005, the plaintiffs forwarded the draft MOU to the defendant. The said email reads thus :
"Dear Mr. Modi, I am sending you the draft MOU by email. Kindly review the attached document, fill in the spaces marked with [*], suggest any changes you might have. I have turned on the "track changes"
feature in Word, so that any changes made by you are highlighted in red.
Once you return the corrected document to me by email, I will have it stamped, sign the same from my end and send you the same to you by courier for your signatures.
In clause 2.1, I have provided for the payment of a sum of Rs. 15 lacs. I cannot pay the same to you legally, as you are a non- resident and Reserve Bank permission is required. I have provided that I will keep the money in escrow. You may suggest a person with whom I can keep it in escrow. Neither Bomi or Dara (both being practicing senior counsel of the High Court) are likely to hold the money in escrow. I shall, of course, ask them on your SQPathan 35/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc behalf. In the meantime, would you also consider suggesting some eminent solicitor's name for this purpose?
Kind regards,
Rohit Kapadia." (Emphasis supplied)
17. The record shows that a copy of the MOU prepared by the plaintiffs and forwarded to the defendant was then forwarded by the defendant's husband to Mr. Sirsalewala (DW 2) under cover of the email (Exhibit P-14). The said email sent to Mr. Sirsalewala reads thus :
"Dear Rakesh, Am enclosing a draft Memo of Understanding prepared for/by the person who is interested in buying our flat. He had originally insisted on a Jan 31st completion date but we later agreed in exchange of emails that we wld do our best to give possession by end Feb. Accordingly, he was to prepare and has today emailed a draft MOU. Will send u my draft reply which I will email after receipt of yr comments. Our main pt is rejection of firm deadline and the deposit amt My questions for u are :
Is this a std. form or is Kapadia taking advantage of my ignorance to draft a one-sided memo ? He has been described to me as an eminent legal person. FEMA: Is permission really needed for non- resident to sell property? Does it take long to obtain clearance. Wld u be able to act on our behalf or do u know a specialist to expedite such application. Appreciate yr early response and full and frank comments.
Thks and regards,
Jamshed." (Emphasis supplied)
SQPathan 36/56
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18. Thereafter, vide email dated 8th January, 2005, the defendant's husband sought comments from Mr. Sirsalewala on several points enumerated therein. The relevant portion reads thus :
" .... This I will discuss with u, in person, when in Bombay, assuming the flat sale progresses favourably. A little background re our dealing with Mr. Kapadia:
We started email correspondence last year when Viloo put us in direct contact with him. He was silent from early November and then suddenly revived the matter mid Dec. asking if we cld give possession by end January as he wanted the flat urgently for his married daughter. We said we wld do our best to give possession by end Feb. Mr. K advised he wld draft a MOU. He has been described to us as a well known legal man and a decent person. So we assumed that the MOU wld be a fair, brief document stating the agreed terms of sale. Instead, we have what seems to me to be an aggressive and one-sided document. I have acknowledged receipt briefly and that we will go thru and send our comments. We do want to complete this sale by end of Feb but there are some points where I particularly need yr comments :
1. The deposit amt - is 10% of price the standard? In an earlier email Mr. K. had stated 30 lacs; in the draft mou it is 15 lacs. Shld be 33.3 lacs?
2. In the covering email he states he cannot pay the deposit to an NRO due to FEMA. This is surely wrong? The cheque/draft shld be in Perviz's name, to be held in escrow? We had been advised that if, for some reason, his offer/application is not approved by the committee, the deposit amt is ours? Is this correct?
3. We cannot agree to a specific 45 days deadline, for obvious reasons. E.g. we don't know when the Society will meet and when the sale is approved.
4. I assume FEMA is not a factor in the matter. Plse confirm.SQPathan 37/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 :::
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5. Is this a fairly std. Form of mou or are my impressions correct that it is biased?
6. If matters proceed in this manner, we wld possibly need some legal help for a suitable mou and the final sale document.
Wld u suggest/know a legal expert whom you cld recommend?
This email is simply to provide background info and express my worries in the matter. Thks for yr help. It is good to have u on our side.
Regards,
Jamshed." (Emphasis supplied)
19.
We may note here, that all the emails exchanged between the parties, will have to be read in the order and in the context it was sent and as a whole to understand the intention of the parties and not in isolation. In the email dated 19th December, 2004, the plaintiff No. 1 expressed his `intention' to buy the suit flat for Rs. 3.33 crores. The defendant's husband vide email dated 20th December, 2004 replied that he was happy that they had reached an agreement on the price. The words used in the said emails are significant. The plaintiff has used the word `intention' to buy the flat for Rs. 3.33 crores and not `agree to buy the flat'. Similarly, the defendant expressed his happiness on having reached an `agreement on the price' and not on agreement for sale. Vide email dated 20th December, 2004, the SQPathan 38/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc defendant's husband stated that they will do their best to give possession of the suit flat by the end of February, 2005. Can the plaintiffs be permitted to rely only on these two emails i.e. 19th and 20th December, 2004, to show a concluded contract, as price, identity of property and time were more/less fixed by these mails? Our answer is an emphatic `NO'. There is nothing in the said emails to suggest that either of the parties could not have backed out after 20th December, 2004. Apart from this and as noted earlier, all the emails will have to be read as a whole to show what was understood and intended by the parties. Infact, the emails dated 19 th and 20th December, 2004, when read in its entirety, do not, in any way suggest that the parties had by the said mails concluded the contract and that the execution of a formal document thereafter, was a mere formality. It is pertinent to note, that in the 19th December, 2004 email, the plaintiff No. 1 has interalia informed the defendant as under :
"To that end I would appreciate if you could allow me to go ahead with drafting an Agreement here in Mumbai, which I could send you in Canada for your signature."
(emphasis supplied) The defendant's husband vide email dated 20 th December, 2004 asked the plaintiff to send the draft agreement. He has further stated that SQPathan 39/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc after the document was signed by both sides, he would advice the defendant's sister to hold the cheque (deposit) and to arrange for a meeting with the members of the Society. It is pertinent to note, that vide email dated 23rd December, 2004, the defendant's husband in his email to the plaintiff No. 1, has noted that though the draft MOU would be presumably sent on 9th January, 2005, however, he had reservations on certain points which he spelt out in detail in the said email. The plaintiff No. 1 vide email dated 26th December, 2004 answered the queries and explained that the transaction involved two stages (a) the MOU containing the basic facts of the agreement and (b) the actual agreement to sell. The plaintiff No. 1 had disclosed that two signed copies (by the plaintiffs) would be sent for the defendant's signature, who would sign the MOU after reviewing the same and thereafter, return one copy to the plaintiffs. The draft of the actual agreement for sale was also to be forwarded by the plaintiff No. 1 to the defendant and if the defendant intended to suggest changes, the same could be suggested by email/fax when the defendant arrived in Mumbai. It was clarified that the Agreement for Sale would be signed by both the parties. Suggestion of the defendant as to the identity of the escrow agent was also sought. From the aforesaid i.e. the communication dated 23 rd SQPathan 40/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc December, 2004 sent by the defendant raising several queries and the response dated 26th December, 2004 of the plaintiffs, we can safely conclude that the parties never felt that they were bound by a concluded contract. The subsequent emails also do not in any manner, suggest or throw light on the nature of transaction, suggesting a concluded contract.
Infact, the email dated 9th January, 2005, sent by the plaintiff No. 1 to the defendant's husband enclosing a draft MOU, clearly asks the defendant to review the draft MOU and suggest changes. It appears from the said email that the draft, after correction, was to be stamped, then signed from the plaintiffs' end and then sent again to the vendor for signature. It also appears that the payment of deposit - payment /escrow was also not finalized by this date. Vide email dated 23 rd December, 2004 addressed to the plaintiff and email dated 8 th January, 2005, addressed to Mr. Sirsalewala (Defendant's Tax Advisor), the defendant's husband raised several queries and expressed his reservations and sought their response/advice/comments.
The defendant's husband in his email dated 8th January, 2005 to Mr. Sirsalewala after stating "assuming the flat sale progresses favourably,"
has raised several issues and sought his advice i.e. on the deposit amount, deadline to handover flat, FEMA issue, whether the MOU was biased, etc. SQPathan 41/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc From the aforesaid correspondence exchanged between the parties i.e. plaintiffs and the defendant; and between the defendant and Mr. Sirsalewala, it appears that the defendant had serious reservations, with regard to the terms to be set out in the MOU. From the correspondence i.e. emails, it is clear that there was no concluded contract as alleged between the parties and that the agreement contemplated by both, was a signed MOU, to be followed by an agreement. It is also evident from the correspondence, that the plaintiff was proposing the terms and that the same were not completely accepted and agreed by the defendant; and that the defendant had several apprehensions/questions. The emails clearly show that the intention of the parties was to bind themselves by a signed document.
20. Coming to the evidence on record and at the cost of repetition, it would be useful to make reference to the plaintiffs' cross examination at pages 162 to 165 of the compilation of documents, Volume-I, in particular answers to question Nos. 11, 14, 15 and 16. The same read thus :
"Q.11 what is the significance of the words "on completion of the signing of the agreement by both the sides'?SQPathan 42/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 :::
app.564.15.doc Ans. This was document draft which was to be signed by the defendant in Canada."
Q.14. What is the significance of a reference to "the actual agreement to sell" in the last paragraph of the first page of exhibit P4?
Ans. This was because the agreement was first to be in an MOU which would be signed in Canada by the Defendant, the deposit amount would be kept in Bombay with a person that he might suggest and an agreement of transfer i.e. actual transfer of the flat would be in the second document."
Q.15 Is it true that the draft f the first MOU was done by you without any involvement of the Defendant at that stage?
Ans. Yes Q.16 Is it true that you expected some changes to be made by the Defendant to the draft?
Ans. Yes"
21. It is thus evident, that even according to the plaintiffs no such antecedent contract even arose, as is now sought to be contended. Infact, Exhibits P-2 to P-4, emails (pages 95 to 100 of the compilation of documents, Volume-I) are relevant in this regard. In Exhibit P-2, email dated 19th December, 2004, the plaintiffs interalia informs the defendant as under :
"To that end I would appreciate if you could allow me to go SQPathan 43/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc ahead with drafting an Agreement herein in Mumbai, which I could send you in Canada for your signature."
(Emphasis supplied) To the aforesaid email, the respondent by Exhibit P-3-email dated 23rd December, 2004 writes to the plaintiffs as under :
"I note from your email of 27 th December that you will send the Agreement .............. I am rather worried on the following points:
(1) My wife is expected to sign this Agreement will it already be signed by Payal? Who is the Agreement between .................... while we wait to see what is in this Agreement and whether it means it binds just Perviz as signatory."
(Emphasis supplied) To the aforesaid email, the plaintiffs through Exhibit P-4-email dated 26th December, 2004 has replied as under :
"1. My wife is expected to sign this agreement- will it already be signed by Payal? Who is the agreement between?
I WILL BE SENDING YOU TWO DOCUMENTS:
THE FIRST WILL BE A MEMORANDUM OF UNDERSTANDING (MOU) WHICH WILL SPELL OUT THE BASIC FACTS OF THE AGREEMENT (PRICE, FLAT DETAILS, ETC) AND STATE THAT WE INTEND TO PURCHASE THE FLAT FROM MRS. MODI. I WILL SEND YOU TWO SIGNED COPIES OF THIS MOU. AFETR REVIEWING THE SAME, PLEASE SIGN BOTH, KEEP ONE, AND RETURN ONE SIGNED COPY TO ME BY FEDEX.
THE SECOND WILL BE A DRAFT OF THE ACTUAL AGREEMENT TO SELL THE FLAT AT DARSHAN. WE CAN SQPathan 44/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc DISCUSS ANY CHANGES YOU MIGHT SUGGEST OVER EMAIL/ FAX OR WHEN YOU ARRIVE IN BOMBAY.
THE AGREEMENT WILL BE SIGNED BETWEEN MRS. MODI AND ME (ROHIT KAPADIA).
2. We understand then that a requisite deposit is to be made and such deposit is to be held in escrow?
THAT IS CORRECT. AFTER RECEIVIG A SIGNED COPY OF THE MOU, I WILL PLACE A DEPOSIT IN ESCROW. I SUGGEST A DEPOSIT OF RS. 30 LAKHS TO BE KEPT IN ESCROW. KINDLY SUGGEST THE NAME OF ANY EMINENT SOLICITOR OF YOUR CHICE WHO CAN HOLD THIS AMOUNT FOR US. IF YOU WOULD SUGGEST A NAME TO ME OVER EMAIL, WE CAN INCORPORATE THE SOLICITOR'S NAME IN THE MOU.
3. After which an introduction is to be arranged with the darshan committee (Malabar Hill co-operative Housing Society) whenever they are to meet.
YES. HOW DO WE WORK THIS OUT AS YOU WILL BE IN CANADA? WOULD MRS. KAPADIA BE ABLE TO INFORM THE SOCIETY ON YOUR BEHALF AND REQUEST FOR AN INTRODUCTON? PERHAPS YOU COULD SEND A LETTER OF INRODUCTION BY COURIER ALONGWITH THE SIGNED MOU? WE NEED TO WORK OUT THE DETAILS ON THIS."
22. It is pertinent to note that prior to all these emails, in Exhibit D-2 email (page 265) of the compilation of documents, Volume-2, the plaintiff himself has stated as under :
"I think the process of exchanging emails is not conducive to an immediate transaction."SQPathan 45/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 :::
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23. In Exhibit P-7, email (page 107) of the compilation of documents, Volume-1, the defendant has informed the plaintiffs as under :
"We will make our travel plans after receiving and signing the MOU."
24. Infact, vide email dated 6th January, 2005 (Exhibit D-7), the plaintiffs forwarded to the defendant the first draft MOU which reads as under :
"I am sending you the draft MoU by email. Kindly review the attached document, fill in the spaces marked with [*], suggest any changes you might have. I have turned on the "track changes" feature in Word, so that any changes made by you are highlighted in red."
25. It is thus evident from the aforesaid correspondence and the evidence on record that the parties had agreed to be bound only by a signed contract/MOU and all obligations were to be complied with only on signing of the said contract/MOU.
26. As is evident, the discussions in the email show that the parties were only trying to finalize the terms, so as to conclude the contract by signing the MOU. By no stretch of imagination, can it be said that the MOU, which was being worked upon by the parties, was a mere formality SQPathan 46/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc and that the parties were ad-idem on the fact, that there was already a concluded contract of sale with respect to the suit flat.
27. Having answered the aforesaid question, we now proceed to consider, whether the 1st February, 2004 meeting of the parties, held in Mumbai, in which the draft MOU was discussed and allegedly finalized, gave rise to a concluded contract ? According to Mr. Chagla, learned Senior Counsel for the plaintiffs, all clauses in the terms of the MOU were discussed and finalized at the meeting dated 1 st February, 2005. He contended that the defendant's husband - DW 1 in his evidence had admitted that a meeting was held on 1st February, 2005, in which, the defendant himself (DW 1), and their financial advisor Mr. Sirsalewala (DW
2) were present and that the terms of the MOU were discussed in detail. He relied on the evidence of DW 1 and his cross-examination thereon, with respect to the handwritten notations made on the draft MOU by DW 1, at the meeting. Learned Senior Counsel further submitted that DW 1 was attempting to prevaricate, by distancing himself from the finalization of the terms of the MOU arrived at, in the meeting of 1 st February, 2005. He submitted that PW 1 had in his evidence deposed that each of the points SQPathan 47/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc with respect to the MOU were discussed and finalized at the meeting and that the said evidence has gone unchallenged. He further submitted that based on the discussions, changes were incorporated in the draft MOU, which was forwarded by the Plaintiffs' Solicitor by email dated 8 th February, 2005 to Mr. Sirsalewala and that no communication/email was received from the defendant/DW 1/Mr. Sirsalewala, indicating that they had any objection to any of the clauses. He thus submitted that the documents and evidence on record shows that there was a concluded contract in terms of the unsigned MOU.
The said submission was vehemently refuted by Mr. Kodianthara, learned Senior Counsel for the defendant. He does not dispute the meeting dated 1st February, 2005. According to the learned Counsel, certain changes and suggestions were made in the meeting by hand. He submitted that after the meeting, plaintiffs agreed to forward a further draft incorporating the defendant's changes to Mr. Sirsalewala, defendant's tax advisor. He further submitted that as they were unilateral additions, the defendant refused to accept Exhibit P-10 as advised by Mr. Sirsalewala and therefore, negotiations failed. He submitted that Exhibit -
SQPathan 48/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 :::app.564.15.doc `O' sought to be specifically enforced is nothing but Exhibit P-10 engrossed on stamp paper, which was not accepted by the defendant.
As noted earlier, it appears from the exchange of emails, that what was intended by the parties was entering into a signed MOU/Agreement. The bargain itself was to be bound by a signed agreement/MOU setting out the terms of the bargain and the same was evident, by the conduct of parties. Did the conduct of the parties, thereafter, in Mumbai, in anyway change this basic understanding ? Most certainly, NO. If the basic understanding, as reflected was that the parties intended to be bound only when the MOU was signed between them, the terms discussed in the meeting of 1 st February, 2005, can at best, be said to be negotiations, in order to arrive at a final MOU, acceptable to both the parties, resulting in concluding the contract by signing the MOU. Mere finalization of terms per se, were not sufficient, as what was the term of the bargain, was a signed document.
Heavy reliance was placed by Mr. Chagla on the answer given by the defendant's witness, DW 1 to Q.No. 132 in his cross-examination.
The said question and answer read thus :
SQPathan 49/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 :::app.564.15.doc "Q 132. Have you anywhere stated that until the MOU was signed, there would be no binding agreement between the parties?
Ans. No."
We fail to understand how this answer will assist the plaintiffs, considering the correspondence i.e. exchange of emails between the parties, which reflects the intention of the parties.
28. The dispute arose with respect to the draft, Exhibit P-10 incorporating the changes/suggestions made by the respondent. It is not in dispute that a meeting had taken place on 1 st February, 2005, which was attended to, amongst others, by the plaintiffs, and others. At the said meeting, certain changes and suggestions were made by hand by the defendant. The plaintiffs had agreed after the said meeting to incorporate the defendant's changes and forward a further draft to the defendant's adviser Mr. Rakesh Sirsalewala. It appears that the defendant refused to accept Exhibit P-10, on the advise of Mr. Sirsalewala and therefore, the negotiations failed. Infact, it appears that Exhibit `O' (MOU) which is sought to be specifically enforced, is nothing but Exhibit P-10 engrossed on SQPathan 50/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc stamp paper which was not accepted by the defendant. It also appears that Exhibit P-10 was forwarded to Mr. Sirsalewala on 8 th February, 2005 under a covering letter of the plaintiffs' solicitor. Exhibit P-9 covering letter of the plaintiffs' solicitor reads as under :
"Please find attached the revised draft of the memorandum of understanding. We hope you will find the same in order."
It appears, that thereafter, negotiations failed and the MOU was not signed.
29. From the evidence and material on record, what emerges is; it appears that it was repeatedly recorded by the plaintiff No. 1 that the defendant should sign the MOU at Canada and send the same to the plaintiffs in Mumbai; that the said MOU could not be signed, since the defendant and her husband had serious reservations regarding the terms of MOU. Infact, the defendant and her husband stated that they would come to Mumbai for the same and that the apprehensions were made known by the defendant to the plaintiffs and to Mr. Sirsalewala. It is thus evident, that the parties had agreed to bind themselves with a signed MOU/agreement, signed by both the parties. It is also pertinent to note, that no earnest money or any amount was paid by the plaintiffs to the defendant, at any SQPathan 51/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc point of time. It is also pertinent to note, that on each page of Exhibit P-10 draft MOU), at the footer, it is stated "First Draft; without prejudice and for discussion purpose only." This fact also reveals that even the plaintiffs did not consider this to be a concluded contract. The learned Single Judge has rightly observed in paras 11 to 13 of the impugned judgment as under :
"11. There also exists some controversy between the parties as to whether or not the notings made by the Defendant on the draft MOU (Exh. P-8) contained all the objections of the Defendant on the draft of the Plaintiffs. DW-1 in his Affidavit-of- Evidence has deposed that after the Meeting held on 1st February 2005, he made certain hand written corrections to the draft MOU which, along with the corrections of Mr. Sirsalewala, were handed over to Plaintiff No. 1 or his Solicitors, though he does not exactly remember how it reached Plaintiff No.1. He further states that, "suffice to state that the MOU at Exh. P-8 appears to contain the corrections/noting/objections. Despite these corrections/notings/objections, Mr. Rohit Kapadia, Solicitor, forwarded under cover email dated 8th February 2005 a revised draft of the MOU ( Exh. P-10) in which these objections/corrections/notings were ignored, not agreed to and not incorporated and essentially terms mentioned in the original MOU to which we have not agreed were reiterated". In his cross-examination DW-1 however, tried to contend that he has in Exh. P-8 not incorporated all the changes which were agreed at the Meeting of 1st February 2005. Again, though the Plaintiffs have contended that all the terms set out in Exh. P-10 were finalized at the Meeting held on 1st February 2015 at the residence of the Plaintiffs and admittedly Exh. P-8 contained the notations carried out by DW-1 as well as the Solicitor of the Plaintiffs, the Plaintiffs have failed to bring anything on record to show that the period of 45 days mentioned in clause 5 of Exh. P-8 was agreed to be reduced to 30 days and a cure period of 30 days was agreed to be given to the Plaintiffs before forfeiting the earnest money as provided in clause 10 of Exh. P-10. In other SQPathan 52/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc words, in the absence of any notation either by the Plaintiffs and/or their Advocates and/or the Defendant and/or her husband on Exh. P-8, the Plaintiffs have failed to establish on what basis such changes were incorporated in Exh. P-10 which was forwarded by them to the Defendant, a few days after the Meeting. The Plaintiffs have also not made any attempt to explain as to why each page of Exh. P-10 contained a footer- "First Draft : without prejudice and for discussion purpose only", more so when the Plaintiff No.1 has in answer to Q. 53 of his cross-examination admitted having gone through the said Exh. P-10 before forwarding the same to the other side and despite his attention being drawn in cross-examination to the said footer."
"12. According to Plaintiff No. 1 Exh. P-8 was handed over to his Solicitors by the Defendant and her husband after the Meeting was concluded. DW-1 has stated that Exh. P-8 was subsequently sent to the Plaintiff No.1 and/or the Advocates for the Plaintiffs. DW-1 in his examination-in-chief stated that, "..I do not exactly remember how it reached Mr. Rohit Kapadia".
Mr. Sirsalewala (DW-2) too has stated that to the best of his memory, the draft MOU with hand written corrections was collected by the Solicitors of the Plaintiffs from his office. Be that as it may, it is fairly clear that the Defendant and/or her husband had attended the Meeting along with the draft of the MOU containing track changes carried out by Mr. Sirsalewala and certain hand written notations by DW-1. At the said Meeting, pursuant to the discussion, certain hand written notations were corrected/added by the Defendant as well as by the Advocate for the Plaintiffs, and the draft containing the corrections made, i.e. Exh. P-8, was handed over to the Advocates for the Plaintiffs presumably to enable the Advocates for the Plaintiffs to incorporate the suggestions made at the said Meeting. It does not matter whether the draft was handed over at the end of the Meeting or thereafter. Admittedly, the Memorandum of Understanding Exh. P-10 was thereafter forwarded by the Advocate for the Plaintiffs to Mr. Sirsalewala (DW-2) on 8th February 2005. As set out above, again there is a controversy between the parties as to whether or not Exh. P-10 contained all the terms and suggestions which were finalized at the Meeting held on 1st February 2005. The Plaintiffs have not been able to SQPathan 53/56 ::: Uploaded on - 20/07/2016 ::: Downloaded on - 20/07/2016 23:56:33 ::: app.564.15.doc show that certain changes found in Exh. P-10 were agreed upon by the parties at the said Meeting held on 1st February 2005 and have also failed to explain the footer on each page of Exh P-10 namely- "First Draft : without prejudice and for discussion purpose only".
"13. However, the Court need not strictly decide the controversy as to whether or not all the terms and suggestions discussed and / or finalized at the Meeting of 1st February 2005 were incorporated in the draft finally sent by the Plaintiffs, i.e. in Exh.P-10. What is important to note is that all this still means that the parties were trying to prepare an agreed draft, expecting to put the same on an engrossment paper, stamp the same and then execute the contract. Far from requiring this Court to take a different view on the basic understanding between the parties referred to above (namely, to be bound only when the MOU was actually signed), the discussions and events noted above show that the parties were only trying to finalize the terms so as to conclude the contract by signing the MOU. From the evidence on record it does not emerge that the parties were working on a mere formality, namely, the MOU, whilst being ad idem on the fact that there was already a concluded contract of sale. Thus, even if at the end of the day, the Plaintiff's case on finalization of all the terms of the MOU in the Meeting of 1st February 2004 as reflected in the draft Exh. P-10 were to be accepted, that still does not take them to a concluded contract. The concluded contract was to be only be execution of the MOU and not by simply finalizing the terms of the MOU."
We find no infirmity in the same. In conclusion, we are completely in agreement with the findings recorded by the learned Single Judge, that there was no concluded contract arrived at, between the parties, either on the basis of the correspondence i.e. exchange of emails, in particular, the emails dated 19th and 20th December, 2004; or on the basis of the unsigned MOU (Exhibit `O').
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30. There can be no dispute about the propositions of law laid down by the judgments relied upon by the learned Senior Counsel for the appellant. However, the said judgments are clearly distinguishable and would not apply to the facts of the present case.
31. Apart from our findings as recorded aforesaid, we may note here, that even the hardships and balance of convenience are clearly and completely in favour of the defendant. Admittedly, no money was exchanged between the parties. It is also not disputed and as has come in the evidence of the plaintiffs that during the pendency of the suit the plaintiffs had purchased a house for their daughter in October, 2005 and as such, the purpose for which the flat was being purchased had failed to exist.
It also appears that the defendant and her husband are senior citizens, above 70 years of age and residents of Canada and considering their age and health, have decided to stay in Mumbai, their only residence, for a couple of months during the harsh winters of Canada. Hardships and balance of convenience, if any, are to the defendant and not to the plaintiffs.
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32. The appeal being devoid of merits, is dismissed, with costs quantified at Rs. 5,00,000/-, to be paid to the defendant, within six weeks from today, along with interest accrued on the amount deposited by the plaintiffs in this Court.
33. Learned Counsel for the plaintiffs prays for continuation of the interim order.
33. Interim order to continue for six weeks from today.
REVATI MOHITE DERE, J. V. M. KANADE, J.
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