Bombay High Court
Lallubhai Amichand Ltd vs Akruti Nirman Ltd. And Ors on 11 July, 2022
Author: Gs Patel
Bench: G.S.Patel, Madhav J Jamdar
Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors
22-osial-14657-2021 in app-79-2021 judg.doc
Dusane
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO.79 OF 2021
Digitally signed
IN
by
BHALCHANDRA
BHALCHANDRA GOPAL
GOPAL DUSANE
DUSANE
Date:
NOTICE OF MOTION NO 2783 OF 2011
2022.07.16
11:57:07 +0530
IN
SUIT NO 567 OF 2005
WITH
INTERIM APPLICATION (L) NO.14657 OF 2021
IN
APPEAL NO.79 OF 2021
Lallubhai Amichand Limited
A company incorporated under the
Companies Act, 1956, having its Registered
address at : 48/50, Kansara Chawl,
Kalbadevi Road, Mumbai - 400 002 ... Appellant
~ versus ~
Aakruti Nirman Limited
A company incorporated under the
Companies Act, 1956 and having its
Registered office at: Akruti Trade
Centre, Road No. 97, MIDC, Marol,
Andheri (E), Mumbai - 400 093.
Vyomesh @ Vimal Shah
An adult, Resident of Andheri (E),
Mumbai- 400 093.
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11th July 2022
Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors
22-osial-14657-2021 in app-79-2021 judg.doc
Hemant M. Shah
An Adult, Office at: Akruti Trade
Centre, Road No. 97, MIDC, Marol,
Andheri (E), Mumbai - 400 093.
Niranjan Hiranandani
An adult, having its address at:
Olympia Central Avenue, Hiranandani
Business Park, Powai, Mumbai - 400
076
Surendra Hiranandani
An adult, having its address at:
Olympia Central Avenue, Hiranandani
Business Park, Powai, Mumbai - 400
076
Mumbai Metropolitan
Region Development
Authority
Bandra Kurla Complex, Bandra (E),
Mumbai- 400 051
Union Bank of India
Kalbadevi, Mumbai.
The Municipal Corporation
of Greater Bombay,
D.N. Road, Chhatrapati Shivaji
Terminus, Mumbai - 400 001
AND
Pandya& Poonawala
Advocates, Solicitors &
Notary
A Partnership Firm at: 102-104, ...Respondents
Bhagyoday, 1st Floor, 79, Nagindas
Master Road, Fort, Mumbai - 400 023.
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11th July 2022
Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors
22-osial-14657-2021 in app-79-2021 judg.doc
A PPEARANCES
for the appellants Mr Vineet Naik, Senior Counsel,
a/w Sumanth Anchan, Nishit
Dhruva, Prakash Shinde &
Niyati Merchant i/b MDP &
Partners, for Appellants/
Applicants.
for the respondents Mr Ashish Kamat, a/w S Mohite, i/b
nos. 1 to 3. AR Mishra.
for the respondents Mr Ajay Khaire.
no.6-mmrda
for the respondent Ms Yamuna Parekh, a/w Pooja
no.8-mcgm Yadav.
CORAM : G.S.Patel &
Madhav J Jamdar, JJ
DATED : 11th July 2022
ORAL JUDGMENT (Per GS Patel J):-
1. The appeal is by the original Plaintiff. It is directed against an order dated 12th June 2020 passed by NJ Jamadar J dismissing what was essentially a third attempt by the Plaintiff to obtain a court order modifying consent terms taken on 7th and 11th July 2005 in the Suit, (Suit No. 567 of 2005).
2. As we shall see, this litigation has a long history. The Plaintiff Lallubhai Amichand Ltd ("Lallubhai Amichand") owned a large tract of land spread between the Mankhurd and Deonar Divisions. It Page 3 of 15 11th July 2022 Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors 22-osial-14657-2021 in app-79-2021 judg.doc admeasures about 64211.25 sq mtrs. Lallubhai Amichand and the Akruti Nirman Group (Defendants Nos. 1 to 3) entered into negotiations. Defendants 4 and 5 are the Hiranandanis. They have associated with the Akruti Nirman Group. Lallubhai Amichand and Akruti Nirman offered this land to the Mumbai Metropolitan Region Development Authority ("MMRDA"), Defendant No.6, for constructing additional rehabilitation tenements for housing Project Affected Persons or PAPs with a Slum Rehabilitation Scheme. Akruti Nirman was to obtain transferable development rights or TDR. Akruti Nirman would also contract with MMRDA to construct tenements on this land and obtain Development Rights Certificates. The consideration was 15% of the TDR in lieu of land to be allotted to Akruti Nirman.
3. Several documents came to be drawn up but, almost inevitably, disputes arose and Lallubhai Amichand brought suit in 2005 for specific performance, including a declaration that the contract between Lallubhai Amichand and Akruti Nirman (including the various documents and instruments executed) was valid, subsisting and binding on Akruti Nirman and the Hiranandanis.
4. Lallubhai Amichand then filed a Notice of Motion No.650 of 2005 for interim reliefs. It is at this time that Lallubhai Amichand and the Akruti Nirman/Hiranandanis resolved their disputes and drew up consent terms. We find a copy of these consent terms at page 84 of the appeal paper-book. It seems that some action was required by MMRDA and the matter was adjourned to 11th July 2005. On that day, counsel for MMRDA made a statement in regard Page 4 of 15 11th July 2022 Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors 22-osial-14657-2021 in app-79-2021 judg.doc to delivery to Lallubhai Amichand of an area subsumed in a larger property and described in a possession receipt. This was in excess of the land conveyed to MMRDA under a conveyance of 28th July 2004. The Court then made an order on the consent terms. We turn immediately to the relevant clauses. Clauses 4 to 8 from pages 85 to 87 read thus:
"4. Defendant No.1 is Ordered and Decreed to pay to the Plaintiff an amount of Rs. 2,00,00,000/- (Rupees Two Crores Only) in full and final settlement of its claim in the Suit.
5. Defendant No.1 undertakes to deposit the said decretal amount of Rs. 2,00,00,000/- (Rupees Two Crores Only) on or before 20th July 2005 with M/s Pandya & Poonawala, Advocates. In the event Defendant No.1 does not deposit the amount on or before 20th July 2005, then Defendants No. 2 and 3 undertake to this Hon'ble Court to deposit the amount of Rs. 2,00,00,000/- with M/s Pandya & Poonawala on or before 27th July 2005. M/s Pandya & Poonawala, Advocates will hold the amount as an escrow agent to be disbursed in the manner set out hereunder. In the event of the Defendant Nos. 1 to 3 failing to deposit the sum of Rs. 2,00,00,000/- on or before 27th July, 2005, the decretal amount of Rs. 2,00,00,000/- shall carry interest at the rate of 15% per annum on and from 28th July 2005 which interest will be the entitlement of the Plaintiff.
6. The Plaintiff and its Directors Mr Paresh Shah and Mr Sunil Shah undertakes to this Hon'ble Court to surrender and/or hand over the amenity and additional recreation ground area to Defendant No. 8 as contemplated under Condition No. 5 of the Letter of Intent dated 10th September 2003 issued by Defendant No. 6 and to furnish proof on or before 31st December Page 5 of 15 11th July 2022 Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors 22-osial-14657-2021 in app-79-2021 judg.doc 2005 of having handed over possession thereof to Defendant No.8. This undertaking shall come into effect upon compliance by Defendant Nos. 1 to 3 of the deposit required under clause 5.
7) In the event, the Plaintiff commits default in producing receipt of Defendant No.8 having received possession of amenities space and additional recreational ground to M/s Pandya & Poonawala then M/s Pandya & Poonawala, Advocates will refund the amount of Rs. 2,00,00,000/- to Defendant No.1 after expiry of a period of 4 weeks from the time stipulated for performance under clause No.6 or within the extended time as set out hereunder and the Decree for the amount of Rs. 2,00,00,000/- shall stand cancelled. However all the other clauses of these consent terms shall continue to apply and bind the parties. The Plaintiff shall be at liberty to apply to the Court for extension of time by making out an appropriate case and in that event the time for performance of the obligation will be as stipulated by this Hon'ble Court. It is clarified that defendants No.1 to 3 will be entitled to oppose such application for extension of time.
8. In the event the Plaintiff produces for inspection the original possession receipt of the Defendant No.8 having received possession of amenities space and additional recreational ground to M/s Pandya & Poonawala, then M/s Pandya & Poonawala, Advocates will pay the amount of Rs. 2,00,00,000/- to the Plaintiff and interest accrued thereon to the Defendant No.1 forthwith and on such compliance the Decree for Rs. 2,00,00,000/- shall stand marked satisfied and all other clauses of these terms will continue to apply and bind the parties."
(Emphasis added) Page 6 of 15 11th July 2022 Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors 22-osial-14657-2021 in app-79-2021 judg.doc
5. Plainly read, the amount of Rs.2 crores was to be placed by Akruti Nirman in escrow with the Solicitors M/s Pandya and Poonawala. This deposit was tied hand and foot to the obligation of Lallubhai Amichand to surrender and deliver possession of the identified amenity land and additional recreation ground area to the Municipal Corporation of Greater Mumbai ("MCGM"), Defendant No.8. This is what condition no. 5 of even the letter of intent of two years earlier 10th September 2003 contemplated. Then Lallubhai Amichand had to obtain proof that possession was delivered to the MCGM of this amenities space and RG area. That had to be done by 31st December 2005. The next provision is important because it says that should Lallubhai Amichand default in furnishing a receipt of delivery of possession to MCGM, the amount of Rs.2 crores would be refunded to Akruti Nirman and the money decree in favour of Lallubhai Amichand in that amount would stand cancelled.
6. We move directly to the reliefs sought in the Notice of Motion before the learned Single Judge. These are set out at pages 61 to 63 and they read thus:
"a) This Hon'ble Court be pleased to vary and/or modify the undertaking given by the Plaintiff contained in clause 6 of the Consent Terms to the extent that the Plaintiff be permitted to surrender and/or hand over the Amenity Land and additional Recreation Area to Defendant No.6 and/or Defendant No.8, and as a consequence thereof clause 7 and 8 of the Consent Terms be read as "7 .....receipt of the Defendant No. 8 or Defendant No. 6 having received....".Page 7 of 15
11th July 2022 Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors 22-osial-14657-2021 in app-79-2021 judg.doc
b) In the event it is held by the Court that possession of the Amenity Land and Recreation Area is not handed over of surrendered to Respondent No.6 then this Hon'ble Court may extend the time for such handing over/surrender by such period as may be deemed fit and proper by this Hon'ble Court, be pleased to extend the time to handover possession to Defendant No.6 and/or Defendant No. 8.
c) In the event it is held by the Court that the possession of either the Amenity Land or Recreation Area cannot be handed over or surrendered to defendant No. 6, then this Hon'ble Court be pleased to extend the time for such handing over/surrender of possession to Defendant No. 8 by such period as may be deemed fit and proper by this Hon'ble Court with a further direction to Defendant No. 6 to handover to the Plaintiff forthwith possession of such of the land as is held by this Hon'ble Court could not have been handed over or surrendered to Defendant No. 6.
d) In the event this Hon'ble Court does not grant prayer (a) then in such event this Hon'ble Court be pleased to:-
i) Order and direct Defendant No. 6 to handover to the Plaintiff, the Plaintiff's land as per the Decree dated 7th/11th July, 2005 within such time and in such manner as may be directed by this Hon'ble Court.
ii) Extend the time for handing over and/or surrender of Amenity Land and Recreation Area by the plaintiff to Defendant No.8 by such period as may be deemed fit and proper by this Hon'ble Court.
e) That this Hon'ble Court be pleased to declare that the Decree for the amount of Rs. 2,00,00,000/- contained in clause 4 of the Consent Terms does not stand cancelled;
f) In the alternative to prayer (c) above this Hon'ble Court be pleased to declare that the clause 7 of the Consent Page 8 of 15 11th July 2022 Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors 22-osial-14657-2021 in app-79-2021 judg.doc Terms to the extent it provides for cancellation of the Decree for Rs. 2,00,00,000/- is in the nature of penalty and the Plaintiff be provided relief from forfeiture and the Decree for Rs. 2,00,00,000/- contained in clause 4 of the Consent Terms be restored;
g) That, if not released to Respondent (Escrow Agent) be ordered and directed not to release the amount of Rs.
2,00,00,000/- (Rupees Two Crores) along with the accretions thereto to Defendants No. 1 to 3.
h) In the alternative of prayer (g) above this Hon'ble Court be pleased to order and direct the Defendants to deposit in this Hon'ble Court amount of Rs. 2,00,00,000/- (Rupees Two Crores) along with the accretions thereto as have been paid by the Respondent to Defendants No. 1 to 3 alongwith the further accretions thereon and deposit and same with this Hon'ble Court.
i) For such further and other reliefs as the nature and circumstances of the case may require."
7. In essence, therefore, what the Lallubhai Amichand seeks is to be relieved of its two-fold obligation: (i) to deliver possession of the amenity land and recreation ground to the MCGM and (ii) to produce proof of delivery of possession of these lands. The third relief sought is consequential, viz., that upon Lallubhai Amichand being relieved of the first two obligations, the decree in its favour for Rs.2 crores should stand (or, more accurately, its cancellation should stand cancelled).
8. The reason given by Mr Naik for this is that MMRDA is in possession of the whole of the land. MMRDA has submitted a proposal to the State Government in regard to the amenity space Page 9 of 15 11th July 2022 Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors 22-osial-14657-2021 in app-79-2021 judg.doc and the RG area. Lallubhai Amichand is, he submits, unable to deliver possession for that reason and should not be penalized for 'no fault of its own'.
9. If only matters were that simple. What seems to have happened is diametrically opposite. MMRDA knew perfectly well that there was this requirement of delivery of 7.5% amenity and 10% additional RG plots to the MCGM. MMRDA's own document of 10th September 2003 at pages 97 and 98 shows this in specific terms. To this document is appended a computation at page 99. This shows the total plot area at 62071.30 sq mts. Then there is the deduction for some reservations. The net plot area is 56825.47 sq mts. From this there is a deduction of 7.5% amenity and 10% RG and this translates to 9944.46 sq mtrs. This is the land for which the Akruti Nirman was to obtain development potential. This is the area to which the price of Rs.2 crores was tied.
10. To put it at its simplest: if Lallubhai Amichand did not ensure that Akruti Nirman obtained the development benefit of this 9944.46 sq mtrs and which could only be done by surrendering the 7.5% and 10% areas to the MCGM, then Lallubhai Amichand was not entitled to receive the amount of Rs.2 crores.
11. What happened thereafter is even more telling. Between October 2005 and December 2005, Lallubhai Amichand sought extensions of time from Akruti Nirman. In itself, this would have been a reaffirmation by Lallubhai Amichand of the willingness to perform the obligations under the consent terms. But in December Page 10 of 15 11th July 2022 Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors 22-osial-14657-2021 in app-79-2021 judg.doc 2005, matters took a different turn. At page 110 is the communication from MMRDA to the Principal Secretary to the Government in Urban Development. It deals with this very land and it says that MMRDA was the project implementing agency for two public projects, viz., the Mumbai Urban Infrastructure Project and the Mumbai Urban Transport Project. There were two adjacent lands. MMRDA was already constructing PAP tenements on one. It believed that the land reserved from amenities would be useful for shifting PAPs. MMRDA intended to acquire and develop the land in lieu of TDR. Then MMRDA pointed out that Lallubhai Amichand had submitted a proposal to MMRDA accordingly.
12. Now this is where Lallubhai Amichand's stand becomes untenable. The proposal by Lallubhai Amichand to deliver the amenity land to MMRDA directly was in complete contravention and contrary to its obligations under the consent terms. This inconsistency is unexplained to this day. Equally important in our view, is a communication of 25th November 2011 from MMRDA to Lallubhai Amichand. This speaks of all three spaces, i.e. the amenity space, the additional recreational ground and the service industries plot. MMRDA said that these plots were to be conveyed to it. Possession receipts were inadvertently prepared by the Land Cell of MMRDA. It said that possession of these plots could be returned to Lallubhai Amichand since ownership of these three plots even then vested with Lallubhai Amichand. Further, MMRDA said that the Municipal Commissioner of the MCGM insisted that the reservation plots be delivered to MCGM before the release of the final phase of the land TDR for the land conveyed to MMRDA for constructing rehab tenements. Moreover the balance construction Page 11 of 15 11th July 2022 Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors 22-osial-14657-2021 in app-79-2021 judg.doc TDR to the developer, i.e. Akruti Nirman would also not be released until the reservation plots were handed over to MCGM. The last para is critical. It says MMRDA asked Lallubhai Amichand to note that until and unless it delivered possession of all the reservation plots in the layout to MCGM, no further TDR would be recommended by MCGM to MMRDA and the present TDR recommendation letter would not be processed by MCGM. In other words, whether by accident or design, MMRDA was returning to the position as it stood at the time of the consent terms and making it an obligation on the part of Lallubhai Amichand to deliver possession of the amenity space and the additional RG area to the MCGM. For reasons that are again unexplained, Lallubhai Amichand did not act on this. It did not effect a surrender of the amenity space and RG area to MCGM.
13. Instead, one day later, on 29th December 2005 Lallubhai Amichand filed Chamber Summons No. 27 of 2006 to record the amendment, i.e. the agreement between Lallubhai Amichand and Akruti Nirman for an extension of time and seeking an extension of time to comply with the undertaking. This application was rejected on 30th December 2005. The application was opposed by the MCGM. As it happens, the Chamber Summons was dismissed for default on 14th December 2006. We also note that on record there is no response shown to us from Lallubhai Amichand to MMRDA's letter of 30th December 2005, a copy of which is at page 111. This letter said that MMRDA intended to take over the land in question and also made a request to the Government of Maharashtra in Urban Development Department to grant its approval.
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14. On 3rd January 2006, Lallubhai Amichand wrote to MMRDA (pages 115 to 116). Lallubhai Amichand confirmed that the lands in question were to be handed to the MCGM as per the consent terms. It then said that the possession of the entire land should continue to be retained with MMRDA including the reservation for the amenity space and additional recreation space. We will pass over the intervening correspondence and come to the events of 2006 when Lallubhai Amichand filed execution proceedings and Chamber Summons No.231 of 2006. The prayers in this Chamber Summons are at page 139. After an ad-interim order was passed on 23rd February 2006, reply affidavits came to be filed. Ultimately, a learned Single Judge of this Court by an order of 31st January 2008 allowed the second Chamber Summons. A copy of this order is from pages 174 to 243. By this order, the learned Single Judge granted relief in terms of prayers (a) to (d), (g), (g)(i) and (h), essentially ordering a modification of the Consent Terms. The matter was carried in Appeal No.166 of 2008. On 22nd March 2011, the Division Bench allowed the appeal entirely and set aside the learned Single Judge's order of 31st January 2008. The Division Bench inter alia observed that the conduct of Lallubhai Amichand showed that Lallubhai Amichand itself believed that allowing MMRDA to continue in possession did not amount to the requisite surrender to MCGM. Lallubhai Amichand filed a Special Leave Petition against this Division Bench order. On 2nd May 2011, the Special Leave Petition was dismissed as withdrawn with liberty to Lallubhai Amichand "move an appropriate Court for appropriate relief".
15. This is the difficulty in Mr Naik's way. The Division Bench order of 22nd March 2001 was not set aside. It continued to hold Page 13 of 15 11th July 2022 Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors 22-osial-14657-2021 in app-79-2021 judg.doc the field. It does so even today. Therefore, when Lallubhai Amichand filed the fresh Notice of Motion No.2783 of 2011 on 14th November 2011, in itself that Motion was not maintainable and was misconceived. The same relief was sought in this third interim application as had been sought before. The Division Bench order would have governed the matter before the learned Single Judge. In fact, what the learned Single Judge was being asked to do was to either sit in appeal over the Division Bench, or, as a Single Judge, to review the 22nd March 2011 Division Bench order. Neither course of action was permissible.
16. On 12th June 2020, Jamadar J, after an elaborate and detailed discussion, dismissed the Notice of Motion and in our view correctly so. He noted the submission by Mr Kamat on behalf of Akruti Nirman that the Supreme Court order did not give Lallubhai Amichand the liberty to attempt a re-opening of the entire matter and, as it were, take not a second but a third bite at this by now thoroughly masticated cherry. We are unable to understand how Lallubhai Amichand could even have sustained such an interim application. The learned Single Judge correctly interpreted the consent terms, the material on record and the various orders that had been passed from time to time. He considered the affidavits that were filed.
17. Before him, there was what Jamadar J described as an 'emotive submission' that Lallubhai Amichand had "done all it could do". This is a singularly underwhelming submission. The entire attempt in our view appears to be to somehow get back the Page 14 of 15 11th July 2022 Lallubhai Amichand Ltd v Akruti Nirman Ltd & Ors 22-osial-14657-2021 in app-79-2021 judg.doc amount of Rs.2 crores without Lallubhai Amichand ever actually fulfilling its obligations under the consent terms.
18. As we have seen, the release of Rs.2 crores from escrow to Lallubhai Amichand was inextricably tied to the surrender by Lallubhai Amichand to the MCGM of the amenity space and the additional RG. Lallubhai Amichand cannot possibly have it both ways. It cannot contend that it should be absolved of that obligation of surrender and yet been entitled to receive the monetary consideration that was linked to that surrender.
19. In our view, the impugned order suffers from no infirmity whatsoever. The appeal is entirely without merit. It is dismissed.
20. No costs.
21. The IAs in the Appeal are infructuous and are disposed of as such.
(Madhav J. Jamdar, J) (G. S. Patel, J)
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