Karnataka High Court
Sri Desai Udaykumar vs M/S Nr Greenwood Construction Private ... on 25 September, 2025
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CRP No. 100079/2025
RESERVED ON : 17.09.2025
PRONOUNCED ON : 25.09.2025 R
IN THE HIGH COURT OF KARNATAKA, DHARWAD
BENCH
DATED THIS THE 25TH DAY OF SEPTEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE G BASAVARAJA
CIVIL REVISION PETITION NO.100079 OF 2025
BETWEEN:
SRI. DESAI UDAYKUMAR
S/O. SRI. VASANTH RAO DESAI,
AGE: 62 YEARS,
R/O. DESAI ESTATE,
RADHAKRISHNA COLONY,
SHRINAGAR, DHARWAD-580003.
...PETITIONER
(BY SRI. SUBRAMHANYA JOIS, SENIOR COUNSEL
FOR MALLIKARJUNASWAMH B. HIREMATH, ADVOCATE)
AND:
Digitally signed by
MALLIKARJUN
RUDRAYYA
KALMATH M/S. NR GREENWOOD CONSTRUCTION PRIVATE LIMITED
Location: HIGH
COURT OF
KARNATAKA
REG. OFFICE AT 396, 3RD FLOOR,
DHARWAD BENCH
Date: 2025.09.26
14:38:11 +0530
1ST MAIN, KHB BLOCK (JUDGES COLONY)
GANDHINAGAR, BENGALURU-560032
REP. BY ITS MANAGING DIRECTOR,
SRI. C. SRIDHAR
S/O. SRI. CHILUKURU KRISHNAMURTHY,
AGE. 53 YEARS, OCC. BUSINESS
R/O. A-702, N.R. ORCHIND GARDENIA APARTMENT,
DR. SHIVARAMKARANTH NAGAR,
RACHENAHALLI, K.R. PURAM HOBLI,
BENGALURU EAST, BENGALURU-560077.
...RESPONDENT
(SRI S. VIVEK REDDY, SENIOR COUNSEL
FOR SRI B. C. JNANAYYASWAMY, ADVOCATE)
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CRP No. 100079/2025
THIS CRP FILED UNDER SEC.115 OF CPC, PRAYING TO
CALL FOR THE RECORDS RELATING TO OS NO.803/2022 FROM
THE COURT OF THE II ADDITIONAL CIVIL JUDGE AND JMFC AT
DHARWAD PER SAME AND SET ASIDE THE ORDER DATED
19.04.2025 PASSED ON I.A.NO.5 IN THE SAID SUIT, AND
ALLOW THE SAID APPLICATION AS HAS BEEN PRAYED FOR.
IN THIS CIVIL REVISION PETITION HAVING BEEN HEARD
AND RESERVED ON 17.09.2025 AND COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, MADE THE
FOLLOWING:
CAV ORDER
(PER: THE HON'BLE MR. JUSTICE G BASAVARAJA)
The Petitioner, who is the defendant in OS No.803 of
2022 on the file of II Additional Civil Judge & JMFC, Dharwad
(for short "the trial Court"), has preferred the present Revision
Petition against the order dated 19th April, 2025 passed on
IA.No.5 filed under Order VII Rule 11(a), (b) and (d) of Code of
Civil Procedure.
2. For the sake of convenience, the parties herein are
referred to as per their status and rank before the trial Court.
3. Brief facts leading to this revision petition are that the
plaintiff filed suit against the defendant for decreeing the suit of
plaintiff directing the defendant to execute Joint Development
Agreement in respect of the suit properties, as per
Memorandum of Understanding dated 12th March, 2021.
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4. It is stated in the plaint that defendant is the owner
of property bearing Sy.No.48, measuring 22 acre 13 guntas; 2
acre 20 guntas in Sy.No.48/1 and 8 acre 24 guntas in
Sy.No.49/3, all situate at Mansur village, Dharwad. The
plaintiff offered to enter into a Joint Development Agreement
with the defendant in respect of the suit properties, which shall
empower the plaintiff to develop the said property into a
residential layout according to the plan that would be approved
by the competent authorities. Pursuant to same, plaintiff and
defendant entered into Memorandum of Understanding dated
12th March, 2021, agreeing to execute a Joint Development
Agreement in respect of suit schedule properties and it was
agreed that the ratio of the scheme shall be 45:55%, of which
45% of the developed area would be allotted to defendant and
55% to the plaintiff. It was agreed that, under the
Memorandum of Understanding, the defendant would come
forward and execute the Joint Development Agreement within a
period of three months from the date of entering into
Memorandum of Understanding. However, the defendant failed
and neglected to execute the Joint Development Agreement
within the stipulated period of three months as per the
Memorandum of Understanding. Hence, the plaintiff was forced
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to issue legal notice dated 8th February, 2022, calling upon the
defendant to execute the Joint Development Agreement as
agreed upon. However, instead of complying the same,
defendant got issued a vague and evasive reply dated 25th
February, 2022. It is further stated in the plaint that the
defendant having agreed to execute the Joint Development
Agreement in favour of the plaintiff and thereafter to develop
the suit property into a residential layout, now, for the reasons
best known to him, is not coming forward to execute the Joint
Development Agreement and develop the schedule property. It
is stated that the defendant, in order to frustrate/deprive the
plaintiff of its legally enforceable rights under the Memorandum
of Understanding and in order to gain unjust enrichment at the
cost of the plaintiff, clandestinely attempting to create third
party rights over the suit schedule properties. It is submitted
that the plaintiff has been always ready and willing to perform
its part of contract under the memorandum of understanding
and that the defendant, without there being any justifiable
reasons, is denying to perform his part of contract.
Accordingly, the plaintiff has filed the suit.
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5. The defendant entered appearance through his
Counsel and filed written statement. An Application under
Order VII Rules 11(a), (b) and (d) of Code of Civil Procedure is
also filed. Plaintiff had filed objection to the Application
IA.No.5.
6. Having heard the arguments on both sides, the trial
Court has rejected the application. Being aggrieved by the
rejection of the Application, the defendant has preferred this
Revision Petition.
7. Sri H. Subramanya Jois, learned Senior Counsel
appearing for the Counsel for Revision Petitioner, would submit
that the order under revision is grossly illegal and
unsustainable for the reason that it is totally opposed to the
ratio and dictum laid down by the Hon'ble Supreme Court in the
case of SPEECH AND SOFTWARE TECHNOLOGIES (INDIA)
PRIVATE LTD. v. NEOS INTERACTIVE LIMITED reported in
(2009)1 SCC 475 wherein it is held that an agreement to enter
into an agreement is not enforceable, nor does it confer any
right upon the parties. He would submit that the finding of the
trial Court on the aspect of absence of cause of action for the
suit, is wholly erroneous and opposed to the ruling of Hon'ble
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Supreme Court in the case of T. ARAVINDANDAM v. T.V.
SATYAPAL reported in (1977)4 SCC 467 wherein it is held that,
"if clever drafting has created the illusion of cause of action, nip
it in the bud at the first hearing by examining the party
searching under Order X of Code of Civil Procedure. An activist
judge is the answer to the irresponsible suits. The trial Courts
would insist imperative on examining the party at the first
hearing, so that bogus litigation can be shot down at the
earliest stage." Though the said ruling has been referred to in
paragraph 19 of the order, the Court below has glossed over
the same without following the ratio laid down therein. The
trial Court has totally failed to notice the ruling in the case of
RAJ A MENDA AND OTHERS v. RASMANI REAL ESTATE AND
OTHERS reported in ILR 2007 KAR 2627. Further, the learned
Senior counsel would submit that by resorting to a clever
drafting, the plaintiff has grossly undervalued the subject
matter of the suit and has paid Court fee of Rs.200/- as against
the advoleram Court fee payable under clause (d) of Section 40
of the Karnataka Court Fees and Suites Valuation Act, 1958 by
merely making a reference thereto, but not following the
provisions. From the very pleading of the plaintiff when it was
crystal clear that there is no privity of contract and a suit
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seeking decree of enforcement of Memorandum of
Understanding being barred by law, the plaint, richly
commanded a summary rejection. It is further submitted that
the alleged agreement is without consideration which is void
under Section 25 of Indian Contract Act, 1872. Under Section
25 of the Indian Contract Act, an agreement without
consideration is void, and further, by virtue of Sections 14 and
41(e) of the Specific Relief Act, 1963, the Memo of
Understanding being inherently determinable and incomplete,
cannot be specifically enforced. On all these grounds, it was
sought for allowing the revision petition. To substantiate his
arguments, the learned Senior Counsel has relied on the
following decisions:
1) SPEECH AND SOFTWARE TECHNOLIGIES
(INDIA) PRIVATE LIMITED v. NEOS
INTRACTIVE LIMITED - (2009)1 SCC 475; AND
2) DAHIBEN v. ARVINDBHAI KALYANJI
BHANUSALI AND OTHER - (2020)7 SCC 366
8. As against this Sri Vivek Reddy, learned Senior
Counsel appearing for the Counsel for respondent, would
submit that the trial Court has properly appreciated the
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CRP No. 100079/2025
material on record in accordance with law and facts.
Absolutely, there are no grounds to interfere with the order
impugned. The arguments advanced on behalf of the revision
petitioner can be considered only after a full-fledged trial and
that there are no grounds to reject the plaint under order VII
Rule 11(a), (b) and (d) of Code of Civil Procedure. With regard
to consideration of the Memorandum of Understanding is
concerned, it is stated in the Memorandum of Understanding it
is stated that 45% of the developed land falls to the share of
land-lord and 55% of the land is to the Developer. On all these
grounds, the learned Senior Counsel sought for rejection of the
revision petition. To substantiate his arguments, he placed
reliance on the following judgments:
1. MR. RAJ A. MENDA AND OTHERS v. M/S.
RASAMANI RAL ESTATE AND OTHERS - ILR 2007
KAR 2627;
2. MILLENIA REALTORS PRIVATE LIMITED v. SJR
INFRATRUCTURE (PRIVATE) LIMITED - 2005(6)
KAR.LJ 36;
3. ELDECO HOUSING AND INDUSTRIES LIMITED v.
ASHOK VIDYARTHI AND OTHERS - 2023 INSC
1043;
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4. M/S. JAI BEVERAGES PVT. LTD. v. STATE OF
JAMMU AND KASHMIR & OTHERS - 2006(5) SCC
722;
5. STATE OF ORISSA v THE TITAGHUR PAPER MILLS
- 1985 AIR 1293;
6. GURUDEV SINGH v. HARVINDER SINGH 2022
LIVELAW (SC) 963
9. I have carefully examined the materials placed
before me. Having given my anxious consideration to the
contentions advanced by the learned Senior Counsels appearing
for the parties, the sole question that would arise for
consideration in this revision petition is, "Whether the revision
petitioner has made out ground to reject the plaint under Order
VII Rules 11(a), (b) and (d) of Code of Civil Procedure?"
10. The plaintiff has filed a suit seeking relief of specific
performance of Memorandum of Understanding dated 12th
March, 2021 and to direct the defendant to execute Joint
Development Agreement in respect of the suit schedule
property. After appearance, defendant filed application under
Order VII Rules 11(a), (b) and (d) of Code of Civil Procedure.
The trial Court has rejected the said application as per order
dated 18th March, 2024. The same was challenged by the
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defendant in CRP No.100044 of 2024. Vide order dated 12th
December, 2024, this Court allowed the revision petition in part
and set aside the order dated 18th March, 2024 passed by the
trial Court and the matter was remanded to the trial Court for
fresh consideration. After remand, the trial Court heard the
arguments on both sides. Written arguments were filed by
both the parties. Having heard the arguments on both sides,
the trial Court vide Order dated 19th April, 2025 again rejected
the Application IA.No.5 filed by the defendant under Order VII
Rule 11(a), (b) and (d) of Code of Civil Procedure. Being
aggrieved by the said order, the defendant is before this Court
in this revision petition.
11. The defendant has not disputed the alleged
Memorandum of Understanding dated 23rd February, 2021,
which is registered before the Sub-Registrar, Banaswadi on 12th
March, 2021. Defendant contended that the plaint does not
disclose any cause of action and it is barred by law as there is
no concluded contract between the plaintiff and the defendant
and no consideration is passed. The alleged memorandum of
understanding is not enforceable in law and the same is barred
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under Sections 14 and 41(e) of Specific Relief Act and under
Section 25 of Indian Contract Act.
12. Before appreciation of material on record, it is relevant
to mention as to the contents of the Memorandum of
Understanding dated 12th March, 2021 entered into between
the parties. The same is reproduced here under:
"MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING is made and
executed on this TUESDAY the TWENTY THIRD day of
FEBRUARY, TWO THOUSAND TWENTY ONE (23-02-2021) at
BANGALORE CITY:
BETWEEN:
SRI. DESAI UDAYKUMAR
S/o Sri Vasanth Rao Desai
Residing at: Desai Estate, Radhakrishna colony,
Shrinagar, Dharwad-580 003.
Karnataka State.
HEREINAFTER referred to as the OWNER/FIRST PARTY which
expression shall wherever the context so requires or admits
mean and include his heirs, executors, administrators and
assigns.
AND:
M/s NR GREENWOOD CONSTRUCTION PRIVATE LIMITED,
A company incorporated under the companies Act, 1956,
having Its registered office at #396, 3rd Floor, I" Main,
KHM Block (Judges Colony) Ganganagar,
Bangalore-560 032.
Represented By its Managing Director, SRI. C. SRIDHAR S/o
Sri.Chilukuri Krishnamurthy.
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Residing at: A-702, NR Orchid Gardenia Apartment, Dr.
Shivaramkaranath Nagar, Rachenahalli, K.R. Puram Hobli,
Bangalore East Taluk, Bangalore 560 077.
Hereinafter referred to as the DEVELOPER/BUILDER/SECOND
PARTY which expression shall wherever the context so
requires or admits mean and include its heirs, executors,
administrators and assigns.
WHEREAS, SRI DESAI UDAYKUMAR, S/o Sri. Vasanth Rao
Desai, the OWNER/FIRST PARTY is the owner of property the
details of which are as follows:
A) All that piece and parcel of the property bearing
survey no 48, measuring 22 Acres 13 Guntas, situated at
Dharwad taluk, Dharwad Hobli, Manasur & Sanna Somapura
Village, Dharwad District, Karnataka.
B) All that piece and parcel of the property bearing
survey no 48/1, measuring 2 Acre 20 Guntas, situated at
Dharwad taluk, Dharwad Hobli, Manasur & Sanna Somapura
Village, Dharwad District, Karnataka.
C) All that piece and parcel of the property bearing
survey no.49/3, totally measuring 08 Acres 02 Guntas, out of
which 08 Guntas is POD Kharab, situated at Dharwad taluk,
Dharwad Hobli, Manasur & Sanna Somapura Vilage, Dharwad
District, Karnataka.
All the aforesaid properties will hereinafter be referred to
respectively as ITEM NO.1, 2 and 3 of the SCHEDULE
PROPERTY.
WHEREAS the OWNER/FIRST PARTY has undertaken to
provide copies of title deeds and all related title documents
to the DEVELOPER/BUILDER/SECOND PARTY at the time of
signing this MEMORANDUM OF UNDERSTANDING
WHEREAS the OWNER/FIRST PARTY hereby together
confirms and assures the DEVELOPER/BUILDER/SECOND
PARTY that his title to the SCHEDULE PROPERTY is clear,
marketable and specific and the SCHEDULE PROPERTY is not
subject to any encumbrances, lien, mortgages, charges,
restrictive covenants, minor claims, statutory dues,
acquisition and/or requisition proceedings, attachments, prior
agreements to sell, prior development agreements, and
claims of any other nature whatsoever. The OWNER/FIRST
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PARTY shall also indemnify the DEVELOPER/
BUILDER/SECOND PARTY against any losses suffered to any
defect in the title of the OWNER/FIRST PARTY over the
SCHEDULE PROPERTY or in respect of any charge or
encumbrances, claims, acquisition or demands of any kind
whatsoever with respect to the SCHEDULE PROPERTY.
WHEREAS, the DEVELOPER/BUILDER/SECOND PARTY herein
has been carrying on business as contractor, developer,
builder, consultant and in development of
apartments/layouts etc., offered to execute Joint
Development Agreement with the OWNER/FIRST PARTY,
which will enable and empower it to develop the SCHEDULE
PROPERTY as RESIDENTIAL LAYOUT according to the plan
/approvals from the concerned authority/ies.
WHEREAS, in pursuance to the foregoing the OWNER/FIRST
PARTY and DEVELOPER/BUILDER/SECOND PARTY hereby
confirm and accept that the ratio of share in the scheme of
development shall respectively be 45:55. The 45% rights,
interest in the land covered by the SCHEDULE PROPERTY and
the proportionate developed area thereon shall be retained
by the OWNER/FIRST PARTY towards his share and
consideration and the balance of 55% share rights, interest
in the land covered by the SCHEDULE PROPERTY and the
proportionate developed area endure shall to the benefit of
the DEVELOPER/BUILDER/SECOND PARTY, with necessary
proportionate right of easement to common passage,
common amenities, open space and the like in accordance
with relevant provisions of law.
WHEREAS both the parties hereby undertake that the site
sharing shall be equal without any priorities to either of the
parties. No party shall seek for any specific facing sites, but
all the sites arising out of the schedule property shall be
shared equally as per the aforesaid ratio only.
AND WHEREAS, the parties herein desire to reduce the terms
and conditions mutually agreed upon between them into
writing.
NOW THEREFORE THIS MEMORANDUM OF UNDERSTANDING
WITNESSETH AS FOLLOWS:
1. The OWNER/FIRST PARTY and the
DEVELOPER/BUILDER/SECOND PARTY herein explicitly agree
that this Memorandum of Understanding is valid the from the
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date of execution/signing on to this Memorandum of
Understanding by PARTY both DEVELOPER/BUILDER/SECOND
PARTY up to legal clearance by obtaining all the required
certified the OWNER/FIRST and the copies of documents
pertaining to the SCHEDULE PROPERTY is obtained/legal
verification and original document of the verification is done
by the advocate/legal counsel DEVELOPER/BUILDER/SECOND
PARTY and plans are cleared by both the parties, wherein the
OWNER/FIRST PARTY DEVELOPER/BUILDER/SECOND PARTY
shall make arrangements and execute Joint development
agreement only after legal clearance by obtaining all the
required certified copies of documents pertaining to the
SCHEDULE PROPERTY is obtained/legal verification and
original document verification is done by the advocate/legal
counsel of the DEVELOPER/BUILDER/SECOND PARTY, and
layout plan approvals are cleared by both the parties, failing
which this Memorandum of Understanding and all its
conditions shall automatically stand annulled.
2. It has been agreed between the OWNER/FIRST
PARTY and the DEVELOPER/BUILDER/SECOND PARTY that
the OWNER/FIRST PARTY shall sign all or any documents and
shall provide any documents/details whatsoever pertaining to
the SCHEDULE PROPERTY in terms/accordance of the MOU to
the Advocate or any person/s authorized by the DEVELOPER
BUILDER/SECOND PARTY. If in case DEVELOPER
BUILDER/SECOND PARTY is not satisfied with the title of the
SCHEDULE PROPERTY, then the DEVELOPER/
BUILDER/SECOND PARTY shall within the course of this
Memorandum of understanding, assign valid reasons for the
same to the OWNER/FIRST PARTY and terminate this
Memorandum of Understanding and all its conditions and the
DEVELOPER/BUILDER/SECOND PARTY shall not execute JDA
with the OWNER/FIRST PARTY as specified in this
Memorandum of Understanding.
3. Whereas the OWNER/FIRST PARTY during the course
of this Memorandum of Understanding shall not enter into
any sort of Agreements/Agreement to sell with any third
party/ies, and the OWNER/FIRST PARTY shall further not
contract any other developer to develop the SCHEDULE
PROPERTY. Likewise, the DEVELOPER/BUILDER/SECOND
PARTY shall not enter into any agreement to sell its 55%
share prior to execution of JDA as the
DEVELOPER/BUILDER/SECOND PARTY would get its share of
55% only upon execution of Joint Development Agreement
(JDA).
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CRP No. 100079/2025
4. It has been agreed by both the OWNER/FIRST PARTY
and the DEVELOPER/BUILDER/SECOND PARTY that the
DEVELOPER/BUILDER/SECOND PARTY shall make
arrangements to procure all necessary statutory approvals
from the concerned authority/ies for development of
residential layout and carry on any other works required for
procuring approvals for formation of residential layout over
the SCHEDULE PROPERTY.
5. Whereas the OWNER/FIRST PARTY shall grant
permission/allow all or any persons being authorized by the
DEVELOPER/BUILDER/SECOND PARTY or from any other
government authority to inspect the SCHEDULE PROPERTY
and to conduct survey or any other requirements, post
execution of this MOU.
6. Whereas it is explicitly understood between the
parties to this MOU that the DEVELOPER/BUILDER/SECOND
PARTY shall form a residential layout by providing all the
amenities there at listed below as ANNEXURE-A and the
OWNER/FIRST PARTY acknowledge the same.
7. The OWNER/FIRST PARTY shall produce the original
documents of title pertaining to the SCHEDULE PROPERTY to
the DEVELOPER/BUILDER/SECOND PARTY or any statutory
authority/ies/banks/ to the DEVELOPER/BUILDER/SECOND
PARTY whenever/wherever necessary either through their
advocate/or on their own on prior intimation of 2 days by the
DEVELOPER/BUILDER/SECOND PARTY. Wherein the advocate
of OWNER/FIRST PARTY/ the owners themselves personally
may produce the original documents of title pertaining to the
SCHEDULE PROPERTY without fail/without assigning any
reasons/without any sort of delay whatsoever, whenever
intimated/demanded by the DEVELOPER/BUILDER/SECOND
PARTY or any other statutory authority/ies, during the course
of this MOU.
8. The OWNER/FIRST PARTY shall execute necessary
documents/forms required to secure sanctioned plan
approvals from STATUTORY AUTHORITY/IES for development
of the proposed residential layout over the SCHEDULE
PROPERTY at the cost of the DEVELOPER/BUILDER/SECOND
PARTY. The DEVELOPER/BUILDER/SECOND PARTY shall be
entitled to appoint architects and other professionals for
securing approvals of plans and other matters connected
therewith. And the DEVELOPER/BUILDER/SECOND PARTY
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CRP No. 100079/2025
agrees to show the originals of the approvals being obtained
by it to the OWNER/FIRST PARTY and their lawyers.
9. The OWNER/FIRST PARTY hereby expressly grants
permission to the DEVELOPER/BUILDER/SECOND PARTY to
use the SCHEDULE PROPERTY for formation of residential
layout and to bring for the said purpose its men and store
materials on the SCHEDULE PROPERTY from the date of
execution of Joint Development Agreement, till the
completion of formation of layout.
10. Whereas the OWNER/FIRST PARTY has paid/shall
clear payment of property taxes and all other statutory
taxes, electricity, water supply, sewerage and other
provisions therein, pertaining to the SCHEDULE PROPERTY up
to the date of execution of Joint development agreement,
wherein further payments with respect to the same shall be
decided and mentioned in the Joint development agreement
which is to be executed between the OWNER/FIRST PARTY
and the DEVELOPER/BUILDER/SECOND PARTY.
11. It is made clear by the OWNER/FIRST PARTY that, all
expenses and costs to be incurred with respect to the
scheme of development, such as approvals, extensions, re-
approvals from any authority, Government Agency, and all
related permissions, water connection, power connection
etc., shall be borne/paid by the DEVELOPER/
BUILDER/SECOND PARTY.
12. Whereas the DEVELOPER/BUILDER/SECOND PARTY
shall not under any circumstance relinquish or assign its
rights and obligations under this agreement to a third party
and its responsibility by handing over the development to a
third party.
13. It is categorically understood and agreed to by the
DEVELOPER/BUILDER/SECOND PARTY that no part of the
SCHEDULE PROPERTY shall be encumbered by it as offered
as collateral security for any loan/Credit facility that it may
avail from any banking institution, Non-Banking Finance
Corporation (NBFC) or Private Money lender/s.
14. Whereas it is explicitly agreed by both the parties to
this MOU that the name of the residential layout proposed to
be formed over the SCHEDULE PROPERTY will be decided and
mentioned in the Joint Development Agreement, by the
OWNER/FIRST PARTY.
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SCHEDULE PROPERTY
ITEM NO 1
All that piece and parcel of the property bearing survey no
48, measuring 22 Acres 13 Guntas, situated at Dharwad
taluk, Dharwad Hobli, Manasur & Sanna Somapura Village,
Dharwad District, Karnataka.
ITEM NO 2
All that piece and parcel of the property bearing survey no
48/1, measuring 2 Acre 20 Guntas, situated at Dharwad
taluk, Dharwad Hobli, Manasur & Sanna Somapura Village,
Dharwad District, Karnataka
ITEM NO 3
All that piece and parcel of the property bearing survey no
49/3, totally measuring 08 Acres 02 Guntas, out of which 08
Guntas is POD Kharab, situated at Dharwad taluk, Dharwad
Hobli, Manasur & Sanna Somapura Village, Dharwad District,
Karnataka.
WHEREAS the boundaries of ITEM NO 1, 2 and 3 of the
SCHEDULE PROPERTY along with all requisite details and the
title flow of the schedule property and description of the
composite schedule property will be mentioned in detail in
the JOINT DEVELOPMENT AGREEMENT only after due
verification of all the related documents, title deeds etc,."
13. A plain reading of the contents of Memorandum of
Understanding makes it crystal clear that there is no recital as
to the consideration. It is an admitted fact that the plaintiff has
not paid any consideration to the defendant. The defendant
has also not received any consideration from the plaintiff.
There is no consideration for Joint Development Agreement
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CRP No. 100079/2025
also. The recitals of the impugned document reveals that the
defendant, being the owner of the land, has been given 45% in
the developed land, whereas the plaintiff, who is a developer, is
given 55% of the developed land. This agreement between the
parties cannot be termed as consideration. Section 2(e) of the
Indian Contract Act contemplates that every promise and every
set of promises, forming the consideration for each other, is an
agreement. Sub-section (g) of Section 2 of the Act
contemplates that an agreement not enforceable by law is said
to be void. Sub-section (h) of Section 2 of the Act
contemplates that an agreement enforceable by law is a
contract. Section 25 of the Act contemplates that an
agreement made without consideration is void. As the maxim
goes, ex nudo pacto non oritur action - from a bare promise, no
action arises. Unless mutual consideration flows, no legal
obligation can arise. The Memorandum of Understanding being
only an expression of intent (nudum pactum), incapable of
enforcement.
14. It is also relevant to mention here as to the provisions
of Section 14 of Specific Relief Act, 1963. The same reads as
under:
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CRP No. 100079/2025
"14. Contracts not specifically enforceable.-- The
following contracts cannot be specifically enforced,
namely:--
(a) where a party to the contract has obtained
substituted performance of contract in
accordance with the provisions of section 20;
(b) a contract, the performance of which
involves the performance of a continuous
duty which the court cannot supervise;
(c) a contract which is so dependent on the
personal qualifications of the parties that the
court cannot enforce specific performance of
its material terms; and
(d) a contract which is in its nature
determinable."
15. The maxim id certum est quod certum reddi potest--
that is certain which can be made certain-underscores the
requirement of certainty in contractual terms. A contract must
be concluded with certainty of terms; otherwise it is
unenforceable. In the present case, essential terms have been
left open, and therefore the arrangement lacks the requisite
certainty to be specifically enforced. It is relevant to mention
here, as to the decision of Hon'ble Supreme Court in the case of
SPEECH AND SOFTWARE TECHNOLOGIES (supra) wherein it is
held that an agreement to enter into an agreement is not
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CRP No. 100079/2025
enforceable, nor does it confer any right upon the parties. In
another decision in the case of DAHIBEN (supra), the Hon'ble
Supreme Court has held that having regard to the documents
filed along with the plaint are required to be taken into
consideration for deciding the application under order VII Rule
11(a) of Code of Civil Procedure. When a document referred to
in the plaint, forms the basis of the plaint, it should be treated
as a part of the plaint.
16. It is relevant to mention here as to the decision
Hon'ble Supreme Court in the case of MUKUND BHAVAN Trust
v. SHRIMANT CHHATRAPATI UDAYAN RAJE PRATAPSINH
MAHARAJ BHONSALE AND ANOTHER rendered in Civil Appeal
No.14807 of 2024 decided on 20th December, 2024. The key
aspects of the decision, may be summarised as under:
Purpose of Order VII Rule 11(d) of CPC:
The Hon'ble Supreme Court re-affirmed that the
intent of Order VII Rule 11(d) is to "nip in the bud"
and summarily reject a suit if it is clearly barred by
law, such as the Limitation Act.
Addressing Delay and Abuse:
The Hon'ble Supreme Court highlights that courts
should not be hesitant to reject a plaint when the
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plaintiff's claims are hopelessly time-barred or
constitute an abuse of the legal process.
Harm to Defendants:
Forcing defendants to undergo the ordeal of a trial
when the suit is clearly unsustainable and time-
barred is considered harmful and unjust.
Judicial Economy:
Rejecting stale or frivolous claims at the threshold is
crucial to ensure judicial resources are not wasted
on litigation that lacks merit and is statutorily
barred.
In essence, the decision encourages a proactive
approach to terminate meritless cases and prevent
their unnecessary protraction, upholding the
principles of legal certainty and efficient judicial
administration.
17. In the case on hand, a plain reading of aforesaid
memorandum of understanding, makes it clear that there is no
privity of contract between the parties and the contract is not a
concluded contract. When there is no concluded contract
between the parties, the parties cannot seek enforcement of
such agreement as contemplated under Section 14 of Chapter
II of Specific Relief Act, 1963. In paragraph 12 of the plaint,
the has clearly stated that the suit is filed by the plaintiff
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seeking relief of specific performance of the rights of the
plaintiff under the Memorandum of Understanding dated 12th
March, 2021 to get the Joint Development Agreement executed
as per the terms of memorandum of understanding. The same
reads as under:
"12) Valuation and Court Fee: That, the suit is filed by the
plaintiff seeking relief of specific performance of the rights
of the plaintiff under MOU dated 12.03.2021 to get the JDA
executed as per the terms of MOU. It is submitted that, the
suit schedule properties are agricultural lands bearing
Sy.No.48, 48/1 and 49/3 situated at Mansur village, Tq: &
Dist: Dharwad, in all measuring 32 Acres and 32 Guntas. It
is submitted that, the plaintiff is seeking the relief of
specific performance of its right under the MOU and since
there is no consideration mentioned for execution of JDA,
the relief sought by the plaintiff falls under Clause (e) of
Section 40 of the Karnataka Court Fees and Suit Valuations
Act, 1958 and since, the value of the suit schedule
properties is more than Rs.10,000/-, a Court fee of
Rs.200/- is paid U/Sec.47 of KCF and SV Act."
18. Upon perusal of the memorandum of understanding
dated 12th March, 2021 and the aforesaid averment made in
the plaint, it would make clear that it is only a expression of
intent to enter into Joint Development Agreement, which does
not embody consideration or a binding obligation. Under
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Section 25 of the Indian Contract Act, 1872, an agreement
without consideration is void (nudum pactum). It is well settled
law that Memorandum of Understanding/Letter of Intents is
mere "agreements to agree" and unenforceable.
19. On perusal of materials placed before me and keeping
in mind the aforesaid provisions of Section 14 of Specific Relief
Act and Section 25 of Indian Contract Act, as also, the
decisions of Hon'ble Apex Court, I am of the considered opinion
that the suit of the plaintiff is barred. When the suit is barred
by law, the trial Court is not at all required to adjudicate the
matter in dispute. Under the given set of circumstances, the
Court should not be hesitant to reject the plaint when the
plaintiff's claims are hopelessly barred under law. If trial is
conducted, it would constitute an abuse of legal process and in
view of the decision of the Hon'ble Supreme Court, the Court
has to summarily reject the plaint if it is clearly barred by law
under the principle of 'nip in the bud' and to terminate the
meritless cases, and prevent their unnecessary protection,
upholding the principles of legal certainty and efficient judicial
administration. For the aforesaid reasons and discussions, the
revision petitioner has made out a ground to allow this petition.
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I have carefully examined the decisions relied upon by the
learned counsel for the respondent. The facts and
circumstances of the case on hand, and the facts and
circumstances of the judgments relied upon are not consistent
to each other. In view of the recent decision of the Hon'ble
Supreme Court and also keeping in mind the provisions of
Section 14 of Specific Relief Act and Section 25 of Indian
Contract Act, the decisions relied upon by the counsel for the
respondent will not come to the aid of respondent. In the
result, I proceed to pass the following:
ORDER
i) Civil Revision Petition filed under Section 115 of Code of Civil Procedure is hereby allowed;
ii) Order dated 19th April, 2025 passed by the II Additional Civil Judge & JMFC, Dharwad on IA. No.5 in OS No.803 of 2022 under Order VII Rule 11 of Code of Civil Procedure is set aside;
iii) Consequently, IA.5 filed under Order VII Rule 11 of Code of Civil Procedure is allowed and the plaint filed under Section 26 read with Order VII Rule 1 of Code of Civil Procedure by the plaintiff, is rejected;
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CRP No. 100079/2025iv) Considering the facts and circumstances of the case, and the nature of transaction, parties are directed to bear their own costs;
v) Registry to send the copy of this Order along with the trial Court Records to the trial Court.
Sd/-
(G BASAVARAJA) JUDGE lnn CT-CM