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