Bombay High Court
Rewa Infrastructure Private Limited vs Samir Narain Bhojwani And Anr on 13 February, 2020
Author: A.K. Menon
Bench: A.K. Menon
rrpillai NMCD-1177-2018.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO. 1177 OF 2018
IN
COMMERCIAL SUIT NO. 677 OF 2018
Rewa Infrastructure Private Ltd. ... Plaintiff
vs.
Samir Narain Bhojwani and Anr. ... Defendants
Mr. Virag Tulzapurkar, Senior Advocate a/w. Ms. Sowmya Srikrishna, Ms.
Shachi Udeshi, Mr. Aryan Srivastava and Mr. Dhawal Mehta /b. M/s Wadia
Ghandy & Co. for the Plaintiff.
Mr. Rohaan Cama a/w. Mr. Parimal Shroff, Mr. D. V. Deokar, Mr. Sachin
Pandey, Ms. Jasmine Upadhye and Mr. D. Parikh i/b. Ms. Parimal K. Shroff
and company for Defendant no. 1.
Mr. Cherag Balsara a/w. Mr. Sachin S. S. Rawool for Defendant no. 2.
CORAM : A.K. MENON, J.
DATED : 13TH FEBRUARY, 2020 P.C.
1. Called for hearing and disposal.
2. The plaintiff is a company engaged in real estate development. Defendant no. 1 is promoter director of defendant no. 2 which carries on real estate business. In the suit the plaintiff seeks inter alia a declaration that it continues to be the sole and exclusive owner of four duplex flats described in Exhibit B to the plaint admeasuring 158 sq. mtrs each (built up area) inclusive of internal staircase areas and balconies along with two car parking 1/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt spaces in a building on a plot of land bearing Cadastral Survey No. 713 of Malabar and Cumballa Hill Division, Dr. Gopalrao Deshmukh Marg, Mumbai ("the suit plot"). It also seeks a direction to the defendant to handover vacant possession of the flats and after setting aside four Memoranda of Agreed Terms (MOATs) dated 28th July, 2007 between the plaintiff and the defendants. Defendant no. 1 being confirming party and defendant no. 2 being purchaser. The plaintiff contends that wrongful acts of defendant no. 1 in collusion with defendant no. 2 justifies lifting of the corporate veil and grant of reliefs to the plaintiffs.
3. In the notice of motion several reliefs have been claimed including permanent injunction restraining defendant no. 1 from exercising powers under the Power of Attorney dated 1 st December, 2003 at Exhibit C to the plaint, for appointment of Court Receiver, High Court Bombay to the suit flats with all powers under Order XL Rule 1 of the four flats and to take charge of the power of attorney and for injunction restraining defendant from alienating, creating third party rights, disposing, dealing with, encumbering, parting with possession, selling or transferring the suit flats and to render accounts in respect of expenses incurred in the said Agreement for Co- operation for development. The motion has been taken up for hearing and final disposal. It would be appropriate that the facts be gone into.
4. It is the plaintiffs case that sometime in 2002 defendant no. 1 contacted the plaintiff and represented to the plaintiff that he had acquired 2/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt development rights of the suit plot together with an incomplete structure standing thereon under agreement dated 28th November, 2003 from one Peddar Realty Developers Private Limited ("Peddar Realty"). The plaintiff claimed to be in a position to provide defendant no. 1 with certain services connected with development of the suit plot and defendant no. 1 was desirous of engaging the plaintiff to render such services. Negotiations ensued and defendant no. 1 agreed to transfer to the plaintiff four flats in the building proposed to be constructed, in consideration for such services. If the plaintiff were not to discharge its payment obligation under the agreement, defendant no. 1 would inter alia be entitled to have a conditional right to sell the flat by exercising powers granted to the defendant no. 1 under a power of attorney.
5. An agreement dated 1st December, 2003 styled as "Agreement for Co- operation for Development" ( "ACOD") came to be executed, recording the bargain between parties. The ACOD was executed by the defendant no. 1 in his capacity as Developer and the plaintiff as a Facilitator. Vide clause 3.1 to 3.5 of the ACOD, the Plaintiff as Facilitator agreed to provide services and facilities which the developer could utilize. The Developer was to develop the property, construct a building in accordance with the Development Agreement dated 28th November, 2003 ("DA") between Peddar Realty and the defendant no.1. In consideration of the obligation undertaken by the plaintiff, the defendant agreed to provide 15% of the entire developed area as set out in the Third schedule to the ACOD free of cost and free of encumbrances viz. four flats on floor 11/12 and 19/20 ("suit flats"). 3/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 :::
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6. The ACOD also empowered the defendant no. 1 to deal with, dispose and receive appropriate consideration from the sale of the suit flats. The plaintiff and defendant no. 1 agreed that defendant no. 1 alone would be entitled to deal with and dispose the entire developed area coming to the share of the plaintiff at a price to be determined by defendant no.1 provided that the price for each of the suit flats would not be less than Rs.5 crores representing 3.75% of the developed area, towards the payment and discharge of obligations of the plaintiff for payment of stamp duty, interest and penalty payable on the conveyance and certain premiums were payable to the BMC. In respect of premium payable to the BMC, if the amount of consideration was not sufficient the balance amount is to be borne and paid by plaintiffs as and when called upon to do so by defendant no. l. The plaintiff confirmed that the right of defendant no. 1 to dispose the developed area was absolute and irrevocable and the plaintiff agreed not to challenge the same. The plaintiff was not entitled to directly or indirectly deal with or dispose of the areas allocated to it. The ACOD also contained an arbitration clause to be preceded by mediation. However. while plaintiffs were to submit to mediation of a named mediator defendant no. 1 was himself to act as Mediator.
7. It is the case of the plaintiff that the defendant did not contact the plaintiff or inform the plaintiff of any amounts that may have become due and payable. The plaintiff had no occasion to perform any payment obligations under the agreement. On or about 23 rd September, 2006 the 4/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt plaintiff received a letter informing him that defendant no.1 had agreed to sell the suit flats to defendant no. 2 for Rs.21,00,00,000/-. The relationship between defendants inter se was not then disclosed. Defendant no. 1 had already received a sum of Rs. 5,95,00,000/- from defendant no. 2 which defendant no. 1 claims to have used for the purpose of payment of premium, taxes and other expenses in relation to the agreement. A further sum of Rs.4,95,00,000/- was to be received by defendant no. 1 from defendant no.2. The said amount was to be appropriated towards payment of stamp duty on the Deed of Transfer and payment for conveyance of the property.
8. The plaintiff has reiterated and as canvassed by Mr. Tulzapurkar that defendant no.1 did not call upon the plaintiff to meet any costs prior to the letter dated 23rd September, 2006. It was contended that no obligation had been cast upon the plaintiff to meet any costs and therefore there was no occasion for the defendant no. 1 to sell the suit flats or any of them. Defendant no. 1 then agreed that sale consideration received would be utilized towards plaintiffs' obligation under the agreement. Thus the right of sale was conditional. It was only later that plaintiff learnt that the transaction proposed to be entered into was between defendant no.1 and defendant no. 2 company controlled by defendant no. 1 inter se. Considering the value the flat were proposed to be sold, it was definitely under valued.
9. On 9th November 2006 the plaintiff informed the defendant no.1 and Peddar Realty that the proposed sale had never been brought up earlier. The 5/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt Plaintiff contended that the proposed sale was undervalued and the plaintiff apparently had buyers who were able to pay a higher price. The plaintiff apparently communicated its readiness and willingness to make its payments under the agreement. Since the price communicated by the defendant was grossly inadequate, the plaintiff called upon the defendant not to proceed with the proposed sale. Defendant no. 1 did not provide any copy of the agreement proposed to be entered into. On 17 th February, 2007 defendant no. 1 wrote to the plaintiff refuting the plaintiffs contention. Peddar Realty being an Associate concern of the plaintiff had also vide its letter dated 15th March, 2007 responded to defendant no.1's letter. Peddar Realty denied the defendants no.1's contentions. Defendant no. 1 had reiterated his contentions and purported to offer details of transactions with defendant no. 2. No document regarding such agreement was however provided. The plaintiff sought a copy of the alleged agreement between defendants inter se, but a copy was not forthcoming. Simultaneously the defendant no. 1 and the plaintiff were said to be in continuous discussions in respect of the suit property.
10. Mr. Tulzapurkar has contended that defendant no. 1 failed to provide the accounts of the alleged costs incurred on account of agreement with the plaintiff. Apart from not providing copies, defendant no. 1 did not refer to any specific agreement(s) between the defendants. During discussions the plaintiff had no reason to believe that any document had been executed between defendant nos. 1 and 2 especially, since defendant no. 2 was 6/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt controlled by defendant no.1. The plaintiff later learnt that certain inquiries were initiated by the Income Tax authorities against defendant no. 1 in relation to the suit flats. Defendant no. 1 addressed a letter to the Deputy Commissioner of Income Tax ("DCIT") on 4 th February, 2013 intimating them that he had received the sum of Rs. 21 crores from the sale of flat from defendant no. 2. Rs.18,40,00,703/- was towards obligation of the plaintiff and the balance of Rs.2,59,99,297/- was payable to the plaintiff. On 13 th February, 2013 the plaintiff received a notice from DCIT seeking information about the sale. It is contended by Mr. Tulzapurkar that until receipt of the letter dated 13th February, 2013 from the Income Tax department, the plaintiff was wholly unaware of any document executed on 1st August, 2005 referred to in the notice. The plaintiff was provided copies of four documents purporting to be MOAT one for each of the flats executed by defendant no.1 in favour of defendant no.2.
11. Inquiries revealed that on 1st June, 2005 four separate agreements styled as "Memorandum of Agreed Terms" (MOATS) were executed for a total consideration of Rs.5,15,00,000/- each. Deeds of Confirmation dated 28 th November 2007 were signed by defendant no.1, on behalf of the plaintiff in his capacity as constituted attorney and on behalf of defendant no.2 as director of defendant no.2 and personally as a confirming party. Only the Deeds of Confirmation were registered but not the MOATs. Upon receiving the document the plaintiff wrote to the Deputy Commissioner of Income Tax on 4th March, 2013 intimating the DCIT that the sale was fraudulent. 7/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 :::
NMCD-1177-2018.odt Defendant no. 1 is also seen to have written to the DCIT claiming that the purported costs incurred in the assessment year 2005-06 were Rs.1,00,92,000/- and that defendant no. 1 had received monies from defendant no. 2 for sale of flats. Although plaintiff does not admit that in assessment year 2005-06 a sum of Rs.1,00,92,000/- was incurred by defendant no. 1 and that payment obligations of the plaintiff had fastened.
12. According to the plaintiff, defendant no. 1 could not have sold the suit flats to defendant no. 2 or anyone else at the price mentioned. It is contended that defendant no.1 was in a fiduciary capacity qua the plaintiff was bound to act prudently in the best interest of the defendant, which he had not. In view of the aforesaid discovery the plaintiff vide letter of 15 th March, 2013 addressed to the DCIT refuted the contention of defendant no. 1 and questioned the bonafides of transaction between defendant no. 1 and 2. According to the plaintiff the MOATs were not stamped nor registered and had no legal effect especially since title to the suit flat are not transferred or vested in defendant no.2. In other words no sale had taken place in favour of defendant no.2. and the plaintiff continued to have discussions with defendant no.2.
13. In December, 2014 however the plaintiff realized that defendant no. 1 executed four separate identical Deeds of Apartment pursuant to the MOATs where under the plaintiffs' constituted attorney purported to sell, transfer and assign flats to defendant no.2. The title of the four flats is sought 8/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt to be transferred only by the four Deeds of Apartments. Since disputes had arisen plaintiff invoked mediation as per clauses 8 and 9 of the ACOD. Mediation failed and on 3rd March, 2016 plaintiff filed an Arbitration Application bearing no. 141 of 2016 under section 11 of the Arbitration and Conciliation Act, 1996 for seeking appointment of an Arbitrator. On account of a jurisdictional defect the Court then observed that considering effect of clauses 8 and 9 and the revocable power of attorney the right of defendant no.1 to deal with or dispose of 15% of the developed area and appropriating consideration was to be kept out of the Mediation and Arbitration. The Court found that the dispute sought to be raised does not form part of the arbitration agreement. That is the genesis of the present suit.
14. Mr. Tulzapurkar submitted that the sale was conditional and the price at which it was agreed to be sold was not Rs. 5 crores and therefore could not have been sold. It appears it is grossly under valued. Referring to the demand notice dated 23rd September, 2006 Mr. Tulzapurkar submitted that there is no breach at all on part of the plaintiff. In the letter dated 23rd September, 2006 no expenses were mentioned. It is also not possible to hold that the plaintiff was in breach since no expenses were ever demanded. There was no default whatsoever and the right to sell the flats would not have arisen. According to Mr. Tulzapurkar defendant no. 1 did not acquire the right of sale. Sale was in any event at grossly under valued price and the sale was to defendant no.2 which was admittedly under controlling authority of defendant no.1. It was submitted that the allegations made by the plaintiff 9/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt was denied. Vide letter dated 13 th June, 2007 plaintiff wrote to defendant no. 1 inter alia contending that even if the flats have been sold at the rate specified the plaintiff would reserve their right to bring action by this Court.
15. Mr. Tulzapurkar submitted that there was no intimation of any amount that was payable. The plaintiff had always maintained that he was not open to selling the property. Moreover excess from the sale would have to be paid over to the plaintiff. Mr. Tulzapurkar stressed upon the fact that enclosures to the agreements has not been registered and this is evident from the noting of the Sub Registrar who clarifies on penultimate page that the enclosure is not registered. Thus it is only the Deed of confirmation that is registered. MOATs has not been registered. This is also seen from the Index II to the extract dated 28th November, 2007. Therefore it is contended that the property was not transferred. The deed of apartment dated 25 th November, 2013 copy of which is at Exhibit R-1 of the plaint reveals that it is vide this document that apartment was allegedly sold to defendant no. 2. This sale could not have taken place on 25 th November, 2013. The actual transfer of the property by sale, if any, took place only on execution of deed of apartment dated 25th November, 2013. There was no sale as on 1 st June, 2005. By this time the defendant no. 1 had already been instructed not to sell the property. Copy of this Deed of Apartment was received by the plaintiff only on 22 nd November, 2014 since defendant did not provide copies at the material time. 10/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 :::
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16. It is contended that by virtue of the power of attorney of the owner the defendant no. 1 is a trustee who would have fiduciary obligation to act in the interest of the Trust. He cannot act wrongfully and to the detriment of the plaintiff. Defendant no. 1 was bound to inform the plaintiff and give him an opportunity to make payment until such time he could not act under the power of attorney. The power of attorney was granted under an ACOD Clause 1 thereof read with clause 4.
17. Mr. Tulzapurkar submitted that the balance of Rs.2,59,99,297/- which the defendant no. 1 has acknowledged as payable to the plaintiff in his correspondence with the Income Tax authorities had not been paid over to the plaintiff and the flats have been sold by defendant no. 1 acting as if he was owner of the flat. Assuming that defendant no.1 did acquire a right of sale first entitlement is restricted to Rs.1,00,92,000/- or Rs. 3.97 crores at best. Considering their figure only the sum of Rs.3.97 crores would have been recovered and for that purpose only one flat was required to be sold since the minimum price agreed was Rs. 5 crores for each flat.
18. On the other hand defendant no. 1 was only an agent for sale. The plaintiff was kept in the dark as is evident from the fact that in the deed of confirmation defendant no. 1 has recorded the confirmation of terms and conditions and provisions contained in the MOATs dated 1 st June, 2005. It is submitted that the defendant no. 1 has himself signed for all three parties for vendor, purchaser-defendant no. 2 and as confirming party. This Mr. 11/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt Tulzapurkar submitted was mischievous. The plaintiff having been kept in the dark, it was shocking to receive the Show Cause Notice under section 142 (1) from the DCIT annexed at Exhibit M to the plaint bringing to the attention of the plaintiff that it had sold four flats. The Show Cause Notice under section 142 (1) sought information as to why the amount of Rs. 21,00,00,000/- should not be treated as income. In response the plaintiff clarified that they are not in possession of these agreements and therefore sought copies of the same.
19. It was contended that recital (k) records the obligation of the plaintiff as vendor and as self confirming party to make available 15% of the entire developed area. The power of attorney dated 1 st December, 2003 also found mention. It then records that pursuant to the ACOD defendant no. 1 has been authorized by the plaintiff to deal with entire developed area and to utilise the amount recovered to discharge obligations. The agreement to sell provides for consideration of Rs.5,15,00,000/- and a sum of Rs. 7,00,00,000/- has been stated as payable on future dates as provided in the clause 3 (a), (b), ( c) and (d). Clause (f) recorded that execution of a formal agreement for sale and registration has no bearing on the validity of the transaction. It was contended that defendant no. 2 has no knowledge of all the facts and the MOATs at Exhibit "O-1" to "O-4" is effectively only an agreement to sale. Recital (a) makes this clear. There is no actual sale or transfer. Reliance is placed on Section 10 of the Limitation Act to contend that the defendant no.1 12/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt was constituted as trustee by virtue of the ACOD and the defendant has committed breach of trust by virtue of the so called sale to defendant no.2. Apropos the defence of delay and laches reliance is placed on section 14 of the Limitation Act to seek exclusion of time taken to decide the Section 11 Application under the Arbitration And Conciliation Act. The plaintiff therefore seeks relief in terms of prayer clause (a), (b), (d) and (e) of the motion. Tulzapurkar relied on the following judgments :
(i) P. V. Sankara Kurup vs. Leelavathy Nambiar1
(ii) State of Rajasthan and Ors. vs. Basant Nahata 2
(iii) Eastern Coalfields Limited vs. Sanjay Transport Agency and
Anr.3
(iv) M/s. Hindustan Pencils Private Limited vs. M/s. India Stationery
Products Co. & Anr.4.
20. Opposing the motion, Mr. Cama for the defendant no. 1 submitted that there is no merit in the plaintiff's case. The MOATs were dated 1 st June, 2005 and the Suit is filed in 2018 and hence the suit is barred by law of limitation. It was contended that by letter dated 13 th June, 2007 the plaintiff had entrusted its entitlement to the flats to defendant no.1. The allegation that the sales were not at prevailing market rates was not established. The delay smacks of malafides. Furthermore under the agreement defendant no. 1 was bound to return the excess money after making payment of stamp duty, BMC premium etc. 1 (1994) 6 SCC 68 2 (2005) 12 SCC 77 3 (2009) 7 SCC 345 4 AIR 1990 DELHI 19 13/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt
21. Mr. Cama then submitted that letter of 13 th June, 2007 is clearly seen to be acquiescence on the part of the plaintiff. On the aspect of jurisdiction Mr. Cama submitted that preliminary issue under section 9A be framed so that the same could be decided at the outset. Defendant no. 1 it is stated was entitled to sell the flats by virtue of power of attorney which gave him vide powers. Mr. Cama submitted that defendants have already disclosed that two of the flats have been let out on leave and licence basis and these two flats were in the occupation of licensees. He reiterated that defendant no. 1 alone has a right of sale. Mr. Cama submitted that the title of the defendant no. 1 is not in dispute. Defendant no. 1 was the owner and defendant no. 2 had acquired title from defendant no.1. He stated the fact that defendant no .2 was obliged to make payment under the agreement but that was a personal obligation. Meanwhile default in payment by the plaintiff had caused the sale.
22. On behalf of defendant apart from limitation and acquiescence Mr. Cama submitted that the plaintiff is guilty of suppression and it is not the plaintiff case that there was no power of sale. Despite knowledge of the transaction entered into by defendant no.1, the plaintiff had not acted from 2007-2015 and the suit is clearly barred by the law of limitation. Furthermore he submitted that the application under section 9 of the arbitration was not filed at the relevant stage. The cause of action pleaded by the plaintiff on the other hand is sale by defendant no. 1 in breach of the ACOD but the plaintiff was aware of these facts from 2006 yet no action was taken.
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23. Inviting my attention to recitals of the Deed of Apartment Mr Cama submitted that under the declaration dated 5 th October 2013 under the Maharashtra Apartment Ownership Act 1970, copy of which was relied upon records the apartments and the car parking spaces to be held by the confirming party as seller /earlier owner and the purchaser is shown to be the present apartment owner. Mr. Cama also invited my attention to the Written Statement of defendant no. 1 dated 1 st November, 2018 in which defendant has contended that the plaintiff had not contended readiness or willingness to perform agreement and to make payment under the agreement and so the question of stopping the defendant no.1 from selling did not arise. The Defendant no.1 has denied that he had not informed the plaintiff that sums due under the ACOD had become payable.
24. Mr. Cama reiterated that the defendant had stood by letters dated 29 th May 2007 and 13th June 2007 (Exhibits 'I" and 'J' to the plaint) and denied all that is contrary to and inconsistent therewith. It is further submitted that JSW Steel Limited formerly known as Ispat Industries Limited and Peddar Realty were once associate concerns of the plaintiff. The four flats were shown as owned by defendant no. 2. The declaration was signed by JSW Steel Limited and Peddar Realty Private Limited which showed that both entities had capacity of transaction of sale of said flat by defendant no.1 in favour of defendant no.2. In that view of the matter Mr. Cama submitted that there was no occasion for the plaintiff to contend to the contrary. He further submitted that the declaration was registered on 8th October, 2013 and there was no 15/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt reason that the declaration had been signed by Peddar Realty. He submitted that there was no dispute that on the sum of Rs. 18 crores arrived at and the benefit of lower taxation has been availed of. He submitted that the section 11 application had been rejected on merits. As far as prayers are concerned he submitted that the reliefs should have been sought in the year 2006 but the plaintiff had failed to do so. The MOATS were given in March, 2013. No objection to the sale to defendant no. 2 has been taken till 2013 although the plaintiff were aware of the transaction as early as 2006.
25. Reliance was placed on Article 54 of the Limitation Act to submit that the a suit for specific performance should have been filed within three years from the date fixed for performance but if no date is fixed within three years from the plaintiff noticing that performance has been refused. In view of the plaintiff having knowledge from 2006 the suit should have been filed within time. The relief sought in the suit in prayer clause (i) seeks damages of Rs. 500,00,00,000/-. However no monetary claims were made within the period permissible in law. Claims related to 2006, whereas the suit is filed only in 9 th March, 2018 and therefore ex-facie filed by bar of limitation.
26. Dealing with Mr. Tulzapurkar's submission based on section 10 of the Limitation Act, Mr.Cama denied that any entrustment has occasioned. My attention was invited to paragraph 36 of the plaint as amended, in which the plaintiff has averred that it had called upon defendant not to proceed with the proposed sale as of 9th November, 2006 and continuously called upon 16/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt defendant to provide copy of the alleged agreement under which flats had been sold. It is only after the letter dated 4 th February, 2013 addressed by defendant no. 1 to DCIT admitting receipt of Rs. 21 crores that copy of these agreements were provided in March, 2013. The plaintiff had no prior knowledge nor was he aware of the developments and title to the flat had not been transferred to defendant no. 2. No sale had taken place. Much later, on 3rd March, 2016, the Application under section 11 came to be filed. It was dismissed on 27th May, 2017. The contention is that between 16 th October,2015 and 27th May 2017 the plaintiff was bonafide pursuing his remedy and with due diligence prosecuting the matter before the court which remedy was subsequently held without jurisdiction is liable to be excluded under section 14.
27. Mr.Cama submitted that there is no merit in the submission that since the plaintiff was not prosecuting any proceeding before the Court since for section 14 to come into play a proceeding should be before the Court and an Application under Section 11 cannot be treated as a "proceeding before a Court" as contemplated in law. It is therefore submitted that the plaintiffs' case is misconceived. Referring to the section 10 argument Mr. Cama submitted that Section 10 cannot apply as against defendant no.2. It is not the plaintiffs' case that defendant no. 1 could not sell the property because they were ready and willing to pay. The plaintiff failed to perform obligations under the ACOD and therefore the request not to sell the property to the defendant no.2 is baseless. It is only the defendant no. 1 who 17/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt could have sold and that is the reason when the amount of stamp duty was claimed, the plaintiff did not offer to pay stamp duty. At the highest Mr. Cama submitted the plaintiff may have claim for a money decree.
28. Mr. Cama submitted that the ACOD and power of attorney empowered the defendant no. 1 to determine the price and to sell the flat from 2007 onwards to 2015. There has been no correspondence on the issue and therefore to suddenly make a claim for injunction is of no consequence. He submitted that the delay from 2007 to March, 2018 is enough to refuse an injunction and prayer for appointment of the Court Receiver. The suit is ex- facie barred by the law of limitation. The learned counsel further stated that the plaintiff knew that demand against Peddar Realty is actually demand against the plaintiff yet there was no protest. Mr. Cama relied on documents which permitted the sale and the defendant had not done anything contrary to the grant of power of attorney. The vendor under the agreement and four Deeds of Apartment was the plaintiff. Mr. Cama therefore submitted that no relief ought to be granted.
29. On behalf of defendant no. 2 Mr. Balsara submitted that prayer clause(b), (d) or (f) would directly affect defendant no. 2 who was a bonafide purchaser for value and therefore by virtue of clause no. 5 of the ACOD the plaintiff had no control and it is only the defendant who would be entitled to act on behalf of the facilitator to deal with and dispose of the flats. The plaintiff on the contrary are disputing this provision and effectively the 18/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt plaintiff was deprived of any control over the sale of the premises. However what is to be considered is whether exercise of this right was proper and whether any default had been committed by the plaintiff in order to give defendant absolute right under clause no. 5 would accrue and become operative only upon performance of the plaintiffs' obligation under the ACOD. The power of attorney it was contended empowered defendant no. 1 under clause no. 2. The power of attorney empowered the defendant no. 1 to execute conveyance agreement and all other documents in pursuance of clause 3.5 of the agreement. It was contended on behalf of defendant no. 2 by Mr. Balsara that the suit against defendant no. 2 is clearly barred by law of limitation and the section 10 argument cannot apply to defendant no.2. It was pointed out that the suit agreement was arrived at in 2005. From 2013 to 2018 no action has been taken against defendant no. 2 who is a bonafide purchaser for value without notice. It was therefore contended that there is no case made out for the grant of reliefs.
30. Mr. Cama relied on the following judgments :
(i) Prabhakar vs. Joint Director, Sericulture Department and Anr. 5
(ii) Mahadeo Savlaram Shelke and Ors. vs. Pune Municipal Corporation and Anr.6
(iii) Rushab Ship International LLC vs. Bunkers onboard Ship M. V. African Eagle & Freight & Ors.7 5 (2015) 15 SCC 1 6 (1995) 3 SCC 33 7 2014(4) Bom C.R. 269 19/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt
31. In Prabhakar (supra) the Supreme Court had examined the effect of laches and delays and acquiescence to hold that if a right is not exercised for long time it is rendered non existent. Even if there is no limitation period prescribed by statute and the Court have acted upon the principle that "delay defeats equities". Especially in cases where discretionary orders have been sought and appointment of Court Receiver is concerned. In Prabhakar (supra) the Court observed that if a party having a right stands by and sees another acting in a manner inconsistent with that right and raises no objection when the act is in progress he cannot thereafter complain. Doctrine of acquiescence also entails that party who does not raise objection and has acquiesced in the act of another has no right to complaint about such conduct.
32. Although Mr. Tulzapurkar canvassed the view that the decision in Mahadeo Savlaram Shelke (supra) would not be applicable in the facts of the present case. In Mahadeo Savlaram Shelke (supra) the court observed that under Order 39 Rule 1 while seeking interim injunction the plaintiff must show triable issues and balance of convenience in his favour and no injunction can be granted against original owner in favour of a person in unlawful possession. The Supreme Court made reference to its order in Shiv Kumar Chadha vs. Municipal Corpn. Of Delhi 8 in which the court observed that if a party is not entitled to injunction as a right and grant of injunction is within the discretion of the Court to be exercised only if it is established that 8 (1993) 3 SCC 161 20/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt unless the defendant is restrained by an injunction, irreparable loss or damage would be caused to the plaintiffs during the pendency of the suit. The Court should be willing to protect a person being wronged or being deprived of property without any authority of law or without following appropriate procedure.
33. In Dalpat Kumar vs. Prahlad Singh9 the Court held that "prima facie case", "Balance of convenience" and "irreparable loss" are not rhetorical phrases and that Court would be circumspect before granting injunction and looking at the conduct of the party that irreparable injury would result to the party seeking relief if the Court did not interfere. Further no other remedy is available except grant of injunction.
34. On behalf of the plaintiff reliance has been placed on the decision of the Supreme Court in the case of P. V. Sankara Kurup (supra) in which the Supreme Court observed that the property in the hands of the agent is held for the principal and the agent stands in a fiduciary capacity for the beneficial interest he had in the property as a trustee. The petitioner in that case is an agent of cestui que trust and held the property as a trustee and thus it was sought to be contended that the defendant no. 1 held the property as agent and trustee in a fiduciary capacity. The power of attorney thus constitutes the grantor as principal and attorney the agent. Merely because power of attorney is given it does not mean defendant no. 1 use the same in any manner he chose including to the detriment of the plaintiff. In Sankara Kurup 9 (1992) 1 SCC 719 21/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt the Supreme Court was considering the challenge to a decree in a suit seeking declaration and title to the property purchased by the petitioner in an auction. The real purchaser was the respondent; whereas, the petitioner was an agent and power of attorney holder, who had purchased the property and ostensibly got his name entered in the sale certificate fraudulently, without the consent of the respondent. Considering the facts Sankara Kurup offers no assistance to the plaintiffs.
35. In Basant Nahata (supra) the Supreme Court observed that execution of power of attorney enables the donee [defendant no. 1 in the instant case] to act on behalf of the plaintiff except in cases where power of attorney is coupled with interest, it is revocable. The donee in exercise of that power granted to him only acts in place of the donor and subject to limitation of powers granted to him. He cannot use the power for his own benefit and any act of infidelity or breach of trust is a matter between the donor and the donee.
36. Reference may also be made to Eastern Coalfields Ltd (supra) in which the Supreme Court was considering clause 14 of an agreement for reference to Arbitration with regard to the commercial disputes between the public sector enterprises inter se and which also provided for an aggrieved party to approach the department of legal affairs, Ministry of Law and Justice. The clause was held to be of no application since one of the parties was a private party. In that case the Calcutta High Court had appointed an 22/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt Arbitrator acting under Section 11 and despite pendency of that matter for substantial period of time, the Court was of the view that the respondent would be entitled to get the benefit of exclusion of time as contemplated under section 14 of the Limitation Act and that it could approach the Civil Court for adjudication and relief. This was sought to be pressed into service in support of his contention that time during which the arbitration application was pending is liable to be excluded in the present case.
37. Furthermore in Hindustan Pencils (supra) which considered grant of temporary injunction in the case of passing off the Court considered the effect of inordinate delay and laches and acquiescence. The High Court quoted from the judgment of the 9 th Circuit Court of Appeal in USA Whitman vs. Disney Productions10 as follows :
"Mere passage of time cannot constitute laches, but if the passage of time can be shown to have lulled defendant into a false sense of security, and the defendant acts in reliance thereon, laches may, in the discretion of the trial court, be found."
In paragraph 30 of the judgment the Court held that there may be doubt as to whether laches or acquiescence can deny relief of permanent injunction. Judicial opinion has been consistent in holding that if the defendant acts fraudulently with the knowledge that he is violating the plaintiffs' rights even if there is inordinate delay in taking action, relief of injunction should 10 263 F2d 229(5) 23/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt not be denied. The Court observed that the defence of laches and inordinate delay is defence in equity and in equity both parties must come to Court with clean hands. An equitable defence can be put up by a party which has acted fairly and honestly. A person who is guilty of violating the law or infringing or usurping somebody's right cannot claim the continued misuse of the usurped right. Where the plaintiff is guilty of acquiescence different considerations may apply. Acquiescence means encouragement by the plaintiff to the defendant. Acquiescence cannot be inferred merely by reason of the fact that the plaintiff has not taken any action to prevent infringement of its right.
38. The defendant no.1 on his part has pleaded acquiescence which the plaintiff denies as part of his reply dated 13 th June, 2007. My attention was invited to letter dated 4 th February, 2013 addressed by defendant no. 1 to the Income Tax Authorities Defendant no.1 acknowledged that plaintiff had undertaken the obligations under the ACOD. Defendant no.1 admitted that the plaintiff was entitled to duplex flats on 11 th and 12th floors as also flats and other areas on 19th and 20th floors. A power of attorney was executed in his favour and the agreement between him and the plaintiff provides that he was to sell each duplex flat for consideration of at least Rs. 5,00,00,000/- i.e. for the four flats the amount that the plaintiff would be entitled to by way of sale would be Rs.20,00,00,000/-. The defendant no. 1 claimed to have incurred liability collectively amounting to Rs.18,40,00,703/- as against the sale consideration of Rs. 21,00,00,000/-. The difference of Rs.2,59,99,297/- is 24/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt said to be payable by the defendant no. 1 to the plaintiff as reflected in the balance sheet. The defendant no. 1 contended that on 17 th February, 2006 out of flats given to his share he had given one flat each to his children. Thus out of 14 flats four are owned by defendant no. 2. One flat each for his two children and balance 8 flats were held by defendant no.1. The case of the plaintiff is that the defendant did not indicate the amounts if any payable by the plaintiff. Relying upon the disclosure made to the Income Tax Authorities on behalf of the plaintiff it was pointed out that although a sum of Rs. 2,96,46,000/- is said to have been incurred, no particulars were given as to when this was incurred. Nothing is stated on oath. That a sum of Rs. 1,00,92,000/-should have been demanded but defendant no.1 has not demanded the sum and therefore said amount has not been paid. Even before 1st June, 2005 certain amounts are said to have been spent. Therefore the defendant was bound to disclose whether the sum of Rs.5,95,00,000/- was spent. Prima facie the silence of the plaintiff over several years must be held against it. The reasons now provided dos not satisfactorily explain the delay in approaching this court and the lack of diligence, especially since interim relief is being sought. In the present set of facts delay and laches must weigh against the plaintiff.
39. A fiduciary relationship is one where persons under duty to act for the benefit of another on matters within the scope of a relationship which includes relationship between agent and principal. One should place trust in integrity of the other who has gained influence over the first and secondly if 25/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt a person assumes control and responsibility over another and if a person has duty to act for the other or could advice on matters falling within the scope of the relationship. Unlike traditionally recognised fiduciary duties viz between lawyer and client in the present case the relationship arises out of purely commercial considerations. The question to be considered is whether the plaintiff has made out a case of breach of fiduciary duty on the basis of several factors that have been urged in support of their case.
40. Having considered the submissions at the bar in the factual matrix, I am of the view that no relief can be granted to the facts of the present case on the aspects of prima facie balance of convenience and irreparable loss. I do not find that the plaintiff has made out a case for interference. Attractive though the argument on behalf of the plaintiff may seem, the facts that have transpired between the date of execution of the ACOD and the registration of the deeds of confirmation do not in my view justify interference by grant of any interim relief. The record indicates that the plaintiff were well aware of the transactions. There appears to have been complete inaction between 2006-07 and January, 2013 which appears to be date on which notice under section 133 under the Income Tax Act. Although copy of the said notice is not annexed to the plaint or the written statement, the reply dated 4 th February, 2013 is at Exhibit L to the plaint. It is in that letter that defendant no. 1 informs DCIT that the suit building had been constructed by defendant no. 1 and that he had entered into a DA with Peddar Realty. That letter discloses that Peddar Realty obtained development rights from Ispat Industries 26/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt Limited and under the said DA defendant no. 1 was entitled to flats on the 14th floor. The letter disclosed the factual arrangement between the plaintiff and defendant no.1 under the ACOD and under which the defendant no. 1 claims the right to deal with and dispose of and receive an appropriate consideration in respect of the flats claimed by the plaintiff. The defendant no. 1 has disclosed that a sum of Rs.18,40,00,703/- were alleged to have been incurred by defendant no. 1 on account of the obligation of the plaintiff although Mr. Tulzapurkar has in his arguments submitted that the figure of Rs.18,40,00,703/- is not relevant.
41. The plaintiff is seen to have been spurred into action after they received the Show Cause Notice dated 13 th February, 2013. The cause of action pleaded in the plaint is on the basis of knowledge of the DA which the plaintiffs claims came to their knowledge only in December, 2014. However in the amended paragraph 36 the plaintiff had admitted that they were already made available all the four MOATS between defendant no 1 and defendant no. 2. The plaintiff had claimed that they had no knowledge of the MOATS prior to March, 2013 thus at least in March, 2013 they had secured copies of the MOATS. It is also a matter of record that ever since letter of 27 th September, 2006 (Exhibit D) to the plaint was received by the plaintiff they were aware that the flats were being sold. As of 23 rd September, 2006 defendant no. 1 had only agreed to sell the four flats. The deed of apartments were not executed although monies were said to have been received. Defendant no. 1 had by then declared his intention to transfer the flats to 27/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt defendant no. 2 and to collect a sum of Rs.4,95,00,000/- from defendant no. 2 towards cost of stamp duty. No action was taken by the plaintiff then except for writing the letter dated 9 th November, 2006. The plaintiff merely requested defendant no. 1 not to proceed with the proposed sale and sell to the higher offerer. Although the penultimate paragraph of letter dated 9 th November, 2006 records that the flats are under valued, it states in affirmative terms "We currently have buyers in place who are ready and willing to purchase the said flats at a price higher than that proposed by you." and which correctly reflects the current market price. It was open to the plaintiff to then suggest sale to those buyers by identifying them but this course of action has not been adopted. The letter dated 13 th February, 2007 was addressed by the defendant no. 1 to Peddar Realty and the plaintiff interalia denying that the proposed sale was at value grossly lower than what it could fetch and that whether or not the plaintiff had buyers ready and willing at a higher price was of no consequence. Both Peddar Realty and the plaintiff have responded to this letter. Peddar Realty this time reiterating the plaintiff's suggestion in the letter dated 9 th November, 2006 that they have purchasers for the flats who were willing to pay higher price more than Rs. 21 crores. In tandem with Peddar Realty's letter, the plaintiff in its reply is seen to "admit and rely on all the averment and statements" contained in Peddar Realty's letter dated 15 th March, 2007. Besides the signatories of three letters dated 9th November, 2006 from plaintiff to defendant no. 1, 15 th March, 2007 from Peddar Realty to defendant no. 1 and 17 th March, 2007 28/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt from plaintiff to defendant no. 1 are the same. It appears there is a concerted attempt to demonstrate a dispute brewing between the plaintiff and Peddar Realty and the defendant no.1. These development recorded in these letters and the stand of defendant no. 1 were prima facie actionable but it does not appear to have been acted upon by the plaintiff at the material time. The plaintiff has chosen to maintain a studied silence thereafter till the Show Cause Notice was issued to it. Thus despite having received copies of the MOATS in March, 2014 and despite having knowledge of the agreement to sell to defendant no. 2, the fact that the DA were executed subsequently will not help the plaintiff to make out a prima facie case to seek benefit of balance of convenience or irreparable loss. The plaintiff has admittedly not been called upon to pay any amounts in compliance of their obligation under the ACOD. Mr. Tulzapurkar's contention that the property had passed to the plaintiff upon execution of the ACOD cannot be accepted. It is pertinent to note that in the letter dated 15 th March 2007 Peddar Realty repeats and reiterates that defendant no.1 has "sold the flats" at grossly undervalued rates. A copy of this letter is marked to the plaintiff thereby putting the plaintiff on notice of the sale.
42. If indeed it was the plaintiff understanding that upon execution of the ACODs the property in the suit flats had passed to the plaintiff, necessary documents of transfer of rights would have been pursued by the plaintiff. This has obviously not been done. Quite apart from this transactional aspects the huge delay in approaching this Court must be held against the plaintiff while 29/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt considering grant of discretionary relief. The explanation put forthwith by the plaintiff on these aspects of delays and laches are not satisfactory. Invocation of arbitration was itself a non-starter given the specific exclusion under the agreement, the plaintiff was well aware of these aspects and it would be appropriate to hold against the plaintiff on this ground also. The plaintiff have not been able to demonstrate that there is likelihood of irreparable harm, loss or damage. In the event their reliefs are declined the suit in any event claims damages to the extent of Rs.500 crores. The plaintiff's lackadaisical approach cannot now be turned to an advantage.
43. The developer undertook the responsibility of bringing and providing all resources including sufficient finances excluding those to be brought in by the Facilitator for the purpose of implementing the DA. On the other hand the Facilitator was obliged to bear all costs relating to the incomplete structure, excluding costs of demolition, but including costs of Architect, R.C.C., Specialist contractors, suppliers, BMC premium etc. The plaintiff- Facilitator was also to provide services, facilities and infrastructure at the costs of the facilitator as required by the developer. All premia for stair cases, lifts and lift landings, fire fighting passages and open space deficiency premium etc. were to be paid by the plaintiff in respect of then current and future plans. Unpaid bills of certain contractors were to be paid by the Facilitator. Stamp duty, registration fees including penalty if any on documents between the original owner and Ispat Industries Ltd.("Ispat") and 30/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt one Hasya Trading and Investments Pvt. Ltd. and Ispat and Peddar Realty was to be fully borne by the plaintiff. The plaintiff was to reimburse the defendant no. 1 for stamp duty relating to the 15% area coming to the share of the plaintiff.
44. It is the plaintiffs contention that the sale must be set aside because defendant no. 2 had full knowledge of the facts. It is not bonafide purchaser for value without notice. The fact that defendant no. 2 had knowledge of the background is evident from the affidavit in reply, more particularly in paragraph 14 in which defendant no. 1 admits that defendant no. 2 was controlled by him. It is therefore submitted that defendant no. 2 is not an arms length entity. It is controlled by defendant no. 1 and his son. Defendant no. 2 is not bonafide purchaser for value. Therefore sales are fraudulent and the sale must be set aside.
45. According to the plaintiff the power to sell had not materialized. Details of expenses were not provided. Until details of expenses were provided there was no question of defendant no. 1 seeking to exercise rights of sale. That the expenses said to have been incurred on 11 th September, 2006 could not have been incurred during the financial year 2005-06. If at all it would have been incurred in the year 2006-07 and therefore stamp duty could not be an expense. The plaintiff could not pay any amount without being informed of what it was liable to pay and therefore the defendant was not entitled to exercise power of sale. Nothing on record 31/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt establishes that the plaintiff attempted to perform its obligation. Apart from the ACOD being vague in timelines or stages, the plaintiff have not disputed the fact that the suit flats were due to be sold. The plaintiff admits that it has not been called upon to perform whereas the defendant no. l asserts that the plaintiff did not perform.
46. The plaintiff had clearly concluded that the flat had been sold at grossly undervalued rates and that selling of flats at lower price and attempt to deprive Peddar Realty of money owed to them and which should have been refunded. Copy of the letter was marked to the plaintiff as well. The request contained in the letter was not to sell flats at Rs.21,00,00,000/- but sell the same to the highest offerer with whom Peddar Realty was ready and willing to co-ordinate. Reference was made to the understanding in the agreement reached between Peddar Realty and Defendant no.1. Interestingly what I find is that signatory on behalf of Peddar Realty, a Director of Peddar Realty and who has signed letter dated 15 th March, 2007 is also the authorised signatory of the plaintiff as seen from the letter dated 17 th March, 2007. Exhibit H to the plaint by which the plaintiff have adopted all the statements made by Peddar Realty in their letter dated 15 th March, 2007. This makes it clear that Peddar Realty and the plaintiff were ad idem as far as the dealings between plaintiff and defendant no. 1 is concerned. As of 2007 there was no letter terminating the power of attorney and on 29 th May,2007 defendant no. 1 has written to Peddar Realty reiterating the fact that availability of purchasers willing to pay more than Rs.21,00,00,000/- is of no 32/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt consequence in view of the express agreement and authority given to the defendant no. 1 and that transaction has already been arrived at and amount received and utilised. The sale proceeds have already been utilised. That the authority granted had been exercised in terms of the agreement and the belated attempt it made to avoid the sale transaction cannot be justified. Defendant no. 1 denied that he had committed any breach of the terms of agreement or trust reposed in him. In that letter defendant no. 1 has clearly stated that the plaintiff and Peddar Realty are both companies under the common control and management of one defendant no. 1 and Kapil Finance and Investments Pvt. Ltd., group of companies of Ispat Industries Limited. This letter of 29th May, 2007 was followed up by defendant no. 1 with letter dated 13th June,2007 addressed to Peddar Realty albeit at a different address but seen to be received by Ispat Industries Limited on behalf of Peddar Realty. Strangely the letter dated 13 th June, 2007 does not refer to the letter of 29 th May, 2007. Once again the contention that the plaintiff and Peddar Realty under common control has been reiterated. The right of sale vesting in defendant no. 1 is also reiterated.
47. Apart from fact that the defendant no. 1 has specifically mentioned that the power of attorney also empowers defendant no. 1 to determine the price by which it is to be sold, on the same day, the plaintiff has after change of its Corporate name addressed letter to defendant no. 1 dealing with the defendant no. 1's letter of 29 th May, 2007 reiterating availability of purchasers to pay in excess of Rs. 21,00,00,000/-. Provisions of the ACOD 33/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt have been reiterated, yet it is contended that the delays smack of malafides since it has been concluded that the sale is at a grossly under valued price. It was contended that the defendant had not disclosed the dealings of the alleged sale of defendant no. 2 and had not been informed when the sale had taken place and how sale consideration has been accounted for. That after receiving the sale consideration defendant no. 1 had on their own chosen not to deposit the stamp duty from sale consideration and it was an attempt to saddle the plaintiff with attempt to failure to deposit the stamp duty. Plaintiff has expressed surprise that stamp duty had not been paid from the sale consideration received and the relationship between M/s. Pramod Mittal and Vinod Mittal with the plaintiff or Peddar Realty or Ispat Industries Ltd. is of no consequence because the plaintiff and Peddar Realty were two separate entities. Plaintiff's thus reserved their right to bring action against defendant no.1 for the alleged reckless conduct. Though it is doubtful that the defendant no. 2 is a bonafide purchaser without notice in view of the fact that defendant no. 1 and his son control the affairs of defendant no.2. I may observe here that there is no question of any case of breach being alleged against defendant no. 2. There is no transaction between plaintiff and defendant no. 2. Therefore question of any entrustment does not arise qua defendant no.2.
48. The plaintiff claimed title to the flat. The fact that the flats belonging to the plaintiff, forming plaintiff entitlement had been sold by defendant no. 1 to defendant no. 2 has not been disputed. Defendant no. 1 had signed as 34/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt constituted attorney for the vendor and as confirming party for self and as director of defendant no. 2 as purchaser. The consequences are that defendant nos. 1 and 2 are one and the same. Common control is admitted and defendant no. 1 has acted for all. The plaintiff was the owner could not have been denied of title in this manner. It is contended that between 2003- 2012 there were some reorganisation of the entities. No details of these are available especially in respect of Ispat Industries Ltd. and JSW Steels Ltd. and in any event from 2012 the plaintiff have nothing to do with ISPAT Industries Limited or Peddar Realty from 2013. It is the case of defendant no. 1 that these are separate legal entities and it to be treated as such. The vesting of the property is by way of Deed of Apartment in 2013 cannot justify the belated attempt at seeking discretionary reliefs but the delay in the present case is fatal to the motion. Limitation being a mixed question of fact and law the issue whether the suit is barred cannot be decided at this stage and delay is in any event not prejudicial to the defendant but will weigh against the plaintiff.
49. On the aspect of entrustment I am of the view that having come to a prima facie view that the plaintiff has failed to demonstrate even prima facie vesting of property into the plaintiff there will be no question of granting plaintiff relief on that basis of their having entrusted the property to defendant no.1. On the aspects of entrustment and breach of trust I am of the view that the plaintiff has failed to make out a case. Thus on all counts this is not a fit case for grant of interim relief. Interim relief is declined and the 35/36 ::: Uploaded on - 14/02/2020 ::: Downloaded on - 09/06/2020 08:05:30 ::: NMCD-1177-2018.odt motion must fail. Hence I pass the following order :
(i) Notice of motion is dismissed.
(ii) No costs.
(A.K. MENON, J.)
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