{"id":62130,"date":"2008-08-21T00:00:00","date_gmt":"2008-08-20T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-star-apparels-pvt-ltd-vs-the-plaintiffs-have-essentially-on-21-august-2008"},"modified":"2017-04-03T19:59:27","modified_gmt":"2017-04-03T14:29:27","slug":"ms-star-apparels-pvt-ltd-vs-the-plaintiffs-have-essentially-on-21-august-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-star-apparels-pvt-ltd-vs-the-plaintiffs-have-essentially-on-21-august-2008","title":{"rendered":"M\/S. Star Apparels Pvt. Ltd vs The Plaintiffs Have Essentially … on 21 August, 2008"},"content":{"rendered":"
Bombay High Court<\/div>\n
M\/S. Star Apparels Pvt. Ltd vs The Plaintiffs Have Essentially … on 21 August, 2008<\/div>\n
Bench: R. S. Dalvi<\/div>\n
                                       1\n\n                IN THE HIGH COURT OF JUDICATURE\n                           AT BOMBAY\n\n\n\n\n                                                                              \n               ORDINARY ORIGINAL CIVIL JURISDICTION\n\n\n\n\n                                                     \n                  NOTICE OF MOTION NO.258 9 OF 200 7\n                                  IN\n                         SUIT NO.49 3 OF 200 7\n\n\n\n\n                                                    \n    M\/s. Star Apparels Pvt. Ltd.                         ...Plaintiffs\n              Vs.\n    Parampreet Singh Bindra\n\n\n\n\n                                          \n    alias King Bindra & Ors.                             ...Defenda nt s\n                                \n    Mr. D.D.Madon , Sr. Counsel with Mr. V.V.Kanade ,\n    Ms. D. Khare i\/b. Shralkar & Co. for Plaintiffs\n                               \n    Mr.P.K.Samda ni , Sr. Counsel a \/w. Mr. Kamal Khata &\n    Mr. H.C. Mehta and S. Nasradaria, Ms. Deepti Shah\n    i\/b. Mehta & Co for Defendan t No.1\n             \n\n    Mr.F.E . D'Vitre, Sr. Counsel with Mr. Ramesh Tiwari\n    i\/b. B. Dandekar for Defenda nt Nos.3\n          \n\n\n\n    Mr. V.R. Dhond i\/b. M\/s. Prakas h & Co for Defenda nt No.7\n\n\n\n\n\n                          CORAM: SMT.ROSHAN DALVI, J.\n                          DATED: 21 ST AUGUST, 200 8\n\n    JUDGMENT\n<\/pre>\n
    1.      The    Plaintiffs   have   essentially   sued        for      specific
\n         performance      of    the     Agreement \/ M e mor a n d u m              of
\n         Understa n di ng (MOU) dated 18 th May, 2006 entered into<\/p>\n
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\n                                                 2<\/span><\/p>\n
         between       the     Plaintiffs and       Defenda nt s      1 and         2.       The<\/p>\n
         Plaintiffs have challenged the termination of that agreement.
\n         The Plaintiffs also seek a declaration that the MOU dated<\/p>\n
         30 th Ju ne, 2005 between Defenda nt No.3 and Defenda nt
\n         No.1     is   valid    and   subsisting,        and    for      an     order        that
\n         Defenda nt s 3 to 6 specifically performed the said MOU. The<\/p>\n
         Plaintiffs     have     further   sought       the    declaration           that      an
\n         agreement dated 26 th December, 2007 between Defenda nt<\/p>\n
         No.3 and        Defenda nt    No.1 is void, and               further        that     an
\n         agreement       dated 29 th Jan u a ry, 2007 between Defendan t<\/p>\n
         No.1 and Defenda nt No.7 is also void.                    The Plaintiffs have<\/p>\n
         applied for ancillary reliefs with regard to those agreement s
\n         and in the alternative for damages.\n<\/p>\n
    2.       The Suit property is the land bearing CTS No.82 at<\/p>\n
         village Malegaon, Tal: Andheri, Mumbai.\n<\/p>\n
    3.       The relations hip between the parties to the aforesaid<\/p>\n
         agreement s must be first understood.                     The Plaintiffs have
\n         entered into an agreement with Defenda nt No.1. Defenda nt
\n         Nos.1 and 2 are not the owners of the suit property.                                The<\/p>\n
         Defenda nt No.3 (The Trust) (Defendant s 4,5 and 6 are the
\n         Trustees of the Defendant No.3 Trust) are the owners of the
\n         suit property.        The Trust wanted to sell its property at CTS
\n         No.82.        The Trust required to take permission from the<\/p>\n
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\n                                            3<\/span><\/p>\n
         Charity Commissioner for such sale under Section 36 of the<\/p>\n
         Bombay Public Trust Act (BPT Act). The Trust, however, had
\n         other properties of the Trust near CTS No.82. From amongst<\/p>\n
         those properties a property bearing CTS No.61 did not
\n         belong to the Trust.        That property was encroached upon.
\n         The encroach m e nt s came to spill on to the Trust properties<\/p>\n
         adjoining CTS No.61. Whereas the Trustees decided to sell
\n         CTS No.82, they desired to purcha se CTS No.61 from the<\/p>\n
         owners of that land, so as to include it within their other
\n         lands, free from encumb r a n ce s that it held.\n<\/p>\n
                                   ig                              Conseque n tly,
\n         the Trust wanted a composite deal – to sell CTS No.82 and to<\/p>\n
         purcha se     CTS        No.61   free    from     encum br a n ce s            or
\n         encroach me n t s.\n<\/p>\n
    4.       The     Plaintiffs    have   had    nothing    to     do      with      any<\/p>\n
         agreement in that behalf with the Trust.\n<\/p>\n
    5.       The Trust initially entered into an MOU on 30 th Ju ne,<\/p>\n
         2005 Exhibit- A, to the Plaint, with Defendan t No.1 (Whereas
\n         the Defenda nt No.1 is the Proprietary Concern, Defenda nt
\n         No.2 is the partner of sole Proprietor of Defenda nt No.1).\n<\/p>\n
    6.       Under     the MOU, the Trust          agreed      to enter         into a
\n         Development       Agreement      with   Defenda nt       No.1       granting
\n         Defenda nt No.1 the absolute right of development of CTS<\/p>\n
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\n                                              4<\/span><\/p>\n
         No.82 under the said MOU.                 The aforesaid arrangeme n t s<\/p>\n
         with regard to the Survey Nos.82 as well as 61 were to be a
\n         part of the Development Agreement.                The Trust agreed to<\/p>\n
         enter into the Development Agreement within 30 days of
\n         receipt of the permission of the Charity Commissioner for
\n         sale of the land.        The Developers agreed to obtain vacant<\/p>\n
         possession of the CTS No.61 for the Trust and develop CTS
\n         No.81 for which they would pay a consideration of Rs.2.30<\/p>\n
         Crores    in   four      installment s     mentioned     therein.            The
\n         relationship     between the parties under the Development<\/p>\n
         Agreement were to be on principal to principal basis.                      Time<\/p>\n
         was to the essence of the MOU subject to two extensions of
\n         three mont hs each for Defenda n t No.1 to carry out their
\n         obligations with regard to CTS No.61.                 Upon signing the<\/p>\n
         Development Agreement between the parties the MOU was to<\/p>\n
         stand relinquished.\n<\/p>\n
    7.       It is seen that this constitutes the initial negotiations<\/p>\n
         between    the    owners,       Defendant      No.3    and       the      initial
\n         Developers, Defenda nt No.1.             The Plaintiffs have prayed for
\n         specific performa nce        of this agreement         by and          between<\/p>\n
         Defenda nt No.1 and Defenda nt No.3.\n<\/p>\n
    8.       Entering      into    the   Development       Agreement          for CTS
\n         No.82, would require a later sale by transfer to the Co-\n<\/p>\n
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\n                                                5<\/span><\/p>\n
         operative Society, which would come upon the said plot.\n<\/p>\n
         Defenda nt      No.3    were      stat utorily          required       to      obtain
\n         permission for such sale from the Charity Commissioner.\n<\/p>\n
         This, they obtained under judgment dated 26 th July, 2006
\n         passed     by   the    Joint     Charity         Commissioner,              Mumbai,
\n         Exhibit- D,     to the plaint.       The said order permitted sale of<\/p>\n
         CTS No.82.       It allowed transfer of the vacant plot of CTS
\n         No.61 upon a consideration of Rs.2.30 Crores and gave time<\/p>\n
         for the usage of the sale proceeds.\n<\/p>\n
    9.<\/p>\n
              Defenda nt Nos.3 and 1 have negotiated until December,<\/p>\n
         2006     by     ultimately     entering          into     the       Development
\n         Agreement.       The draft of their agreement for development
\n         came to be prepared in November, 2006. It appears that, the<\/p>\n
         Defenda nt No.1 did not himself desire to develop; he was to<\/p>\n
         create rights in other developers, who would finance the
\n         project. The Defenda nt No.3 were interested in having their
\n         unique contract for release from encum br a n ce s of CTS No.61<\/p>\n
         alongside the sale of CTS No.82. If the Defendant No.1 was
\n         not to himself develop the project, Defendan t No.3 were to
\n         allow some other Company or partners hip or such other<\/p>\n
         entity, in which Defendant No.1 would have control and
\n         stake to develop it, so that there end in obtaining the release
\n         of   CTS      No.61    and     the        sale    of    CTS       No.82        would
\n         contempor a neo u sly to be achieved.\n<\/p>\n
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\n                                           6<\/span><\/p>\n
    10.     The    draft     Development        Agreement          between           the
\n      Defenda nt No.3 and defenda n t No.1 of November, 2006, part<\/p>\n
      of the Exhibit- R to the plaint, shows how the parties were to
\n      deal with the aforesaid           two Survey numbers                upon       the
\n      aforesaid consideration.         Though, therefore, the ambit of the<\/p>\n
      MOU was maintained in the Development Agreement, which
\n      the parties had agreed to enter into, the actual mode to<\/p>\n
      obtain that end was negotiated, drafted and later modified.
\n      The draft of November, 2006 showed that the hutme nt s<\/p>\n
      would be removed from CTS No.61 within 36 months with an<\/p>\n
      extendable period of further 12 mont hs. The Defenda nt No.3
\n      as the owners were to have a lien on 15000 sq. ft. on
\n      constr ucted area of CTS No.82 until the hutme n t s were<\/p>\n
      removed      and     for their    alternate   accommoda tion              under<\/p>\n
      Clause 4.2 of the said draft of November, 2006.                       Further,
\n      the Developer was to compens ate the owner in case of
\n      refusal to rehabilitate hut me nt owners under Clause 4.3 of<\/p>\n
      the   said   draft    agreement.        CTS No.82     upon        which        the
\n      Defenda nt No.1 was to constr uct and was to be handed over
\n      after the aforesaid obligation, with regard to CTS No.61 was<\/p>\n
      performed under Clause 5.2 of the said draft agreement.
\n      Defenda nt No.3 allowed Defendant No.1 as the developer to
\n      grant sub- development of the property and assigned his
\n      rights and entitlement s to a third party, subject to that third<\/p>\n
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\n                                        7<\/span><\/p>\n
      party being liable to fulfill the aforesaid obligations with<\/p>\n
      regard to CTS Nos.61 and 82 under Clause 6.1 5 of the said
\n      draft agreement.    The Developers had the right to sell the<\/p>\n
      units and form a Co- operative Society upon development of
\n      plot No.81 under Clause 8 of the said draft agreement.\n<\/p>\n
    11.   The parties further negotiated and arrived at the final
\n      Development Agreement on 26 th December 2006, which was<\/p>\n
      also executed between Defenda nt No.3 and Defendant No.1.
\n      The aforesaid terms came to be modified. Conseque ntly, the<\/p>\n
      obligations with regard to CTS No.61 were agreed to be<\/p>\n
      performed by Defenda nt      No.1 within 24 month s                     with a
\n      further extenda ble period of 12 mont hs from the date of that
\n      agreement. (the period of 36 months came to be reduced to 24<\/p>\n
      month s for that purpose) . The Defendant No.3 were to have a<\/p>\n
      lien on 16478 sq. ft. built- up area to be constr ucted on CTS
\n      No.82 (the area of 15000         sq. ft. came to be increased
\n      accordingly) . The parties agreed that Defenda nt No.1 would<\/p>\n
      be entitled to transfer the benefits of the agreement or assign
\n      any rights   or grant    sub- development          rights      in the suit
\n      property to any Firm or Company in which Defenda nt No.1<\/p>\n
      was a part ner, member or Director, and Defenda nt No.1
\n      would   remain     person ally       liable   to   comply          with       the
\n      obligations with regard to CTS No.61.               (Hence, mere sub-
\n      development rights came to be changed to the grant of such<\/p>\n
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\n                                          8<\/span><\/p>\n
      rights only to a Firm or a Company constituted or incorporated<\/p>\n
      by Defenda nt No.1 along with his personal liability continuing
\n      thereun der) .\n<\/p>\n
    12.    It can be seen that the initial MOU dated 30 th Ju ne,
\n      2005 culminated in the Development Agreement dated 26 th<\/p>\n
      December, 2006 between the Defenda nt s 3 and 1.\n<\/p>\n
    13.    It appears that Defenda nt No.1, from the very inception,
\n      had considered having a sub- developer or a financer for his<\/p>\n
      project. That being the scheme of development, Defenda nt
\n      No.3 were amena ble to having the project sub- developed or<\/p>\n
      financed      by a third     party,    but   took care to keep              the
\n      obligation of the Defenda nt No.1 in the said project alive for<\/p>\n
      the entitlement of the owners, to the vacant plot under CTS<\/p>\n
      No.61 alongside the development and sale of the plot under
\n      CTS No.82.\n<\/p>\n
    14.    The Defenda nt        No.1   negotiated    inter    alia     with      the
\n      Plaintiffs.      It is, under such circum st a n ces, the Plaintiffs
\n      came into the picture.\n<\/p>\n
    15.    The initial docume nt        of the Plaintiffs, is the MOU
\n      executed on 18 th May, 2006 Exhibit- C, to the plaint.                    This
\n      was about a year after the MOU came to be executed<\/p>\n
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\n                                        9<\/span><\/p>\n
      between Defendan t No.3 and Defenda nt No.1, to agree to<\/p>\n
      enter into a Development         Agreement.         Conseque ntly, to
\n      enable Defenda nt      No.1 to enter into such             Development<\/p>\n
      Agreement, he entered into the MOU with the Plaintiffs.
\n      Under the MOU dated 18 th May, 2006 Defendan t No.1 agreed
\n      to allow the Plaintiffs to develop and utilise the plot of land<\/p>\n
      at village Malegaon,       Tal: Andheri,     Mumbai         (the survey
\n      number of the plot is not stated).            This agreement was<\/p>\n
      subject to the fulfillment of the conditions mentioned in the
\n      MOU, executed by Defendan t No.1 with Defendan t
\n                              ig                                               No.3
\n      (which was dated 30 th Ju ne, 2005). Under the MOU between<\/p>\n
      the Defenda nt No.1 and the Plaintiffs, Defenda nt No.1 was to
\n      get the ULC permission to constr uct the bound a ry wall, get
\n      the approval of the Charity Commissioner for the property to<\/p>\n
      be      developed   (CTS   No.82),   enter   into   agreement            with<\/p>\n
      encroachers on the nearby plot (CTS No.61) (both the CTS
\n      number s     are not stated in the MOU) and make out a
\n      marketa ble title to the said property.\n<\/p>\n
    16.       The consideration agreed between the parties was to be
\n      of Rs.9.50 crores for transfer and assignmen t of the said<\/p>\n
      plot.     Rs.51 lakhs was to be paid initially on execution of
\n      MOU against the security for repayment, if so required to be
\n      repaid by depositing with the Solicitor of the Plaintiffs. The
\n      letter of allotment of one flat of the value of about Rs.60<\/p>\n
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\n                                       10<\/span><\/p>\n
      lakhs was to be held in escrow, and on the execution of a<\/p>\n
      Promissory Note by Defenda nt No.1.         Hence, it is seen that
\n      the initial payment of Rs.51 lakhs was not by way of earnest<\/p>\n
      amount unconditionally given.         For the initial payme nt also
\n      the parties contemplated the mode of its repay me nt and the
\n      security for that purpose.     Consideration as required for an<\/p>\n
      agreement to sell an immovable property did not pass.                    The
\n      execution of the Promissory Note suggested that the amount of
\n      Rs.51 lakh s paid by the Plaintiffs was treated as a deemed<\/p>\n
      loan from them.\n<\/p>\n
    17.    The balance amou nt of Rs.8.99 Crores was to be paid by<\/p>\n
      the Plaintiffs to Defenda n t        No.1, upon     Defendant           No.1
\n      fulfilling all the conditions under the agreement and the
\n      execution     of appropriate    docume nt s    in     favour        of the<\/p>\n
      Plaintiffs.   This amou nt was payable within 45 days by the<\/p>\n
      Plaintiffs after all the conditions were fulfilled. The period of
\n      payment for 45 days was to be extended and if within that<\/p>\n
      period the Defenda n t No.1 would not be able to fulfill the
\n      condition they would be liable to pay the Plaintiffs interest at
\n      12% on Rs.51 lakhs paid and secured. Hence, an extended
\n      period of 90 days wa s given for complying with the conditions<\/p>\n
      by the Plaintiffs.   If the conditions could not be complied, the
\n      amount would carry interest. The amount of Rs.51 lakhs was
\n      itself paid as security for its repayme nt by way of allotment of
\n      flat and execution of a Promissory Note. If the amount had to<\/p>\n
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\n                                       11<\/span><\/p>\n
      be repaid after 90 day s of the agreement, it would be repaid<\/p>\n
      along with the interest at the agreed rate.\n<\/p>\n
    18.   The period of three mont hs allowed to the Plaintiffs to
\n      make payment upon the Defendan t s carrying out the five
\n      conditions mentioned in the MOU expired on 17 th August,<\/p>\n
      2008. Under the last clause of the said MOU the parties
\n      agreed that the terms, which required to be deliberated,<\/p>\n
      would be discussed         and finalised with consent               of their
\n      respective Solicitors igand    further      Memorand u m s          may be
\n      executed from time to time. Hence, the parties did not take
\n      the aforesaid MOU as a final Agreement between them .\n<\/p>\n
    19.   It is this MOU, that the Plaintiffs essentially seek to
\n      specifically enforce. This MOU is subject to the earlier MOU<\/p>\n
      between Defenda nt No.1 and Defendant No.3. The Plaintiffs
\n      have not paid any consideration under the MOU – and not<\/p>\n
      even   earnest   amoun t    – except     a loan      against        security
\n      repayable with interest at 12%.             Defenda nt No.1 has not
\n      performed all the conditions mentioned in the agreement.\n<\/p>\n
      The parties in fact negotiated further.\n<\/p>\n
    20.   The   owners,   Defendant        No.3    allowed     the      Plaintiff’s
\n      Attorneys to publish a public notice by their letter dated 22 nd<\/p>\n
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\n                                                12<\/span><\/p>\n
      September, 2006 Exhibit- E , to the plaint. That public notice<\/p>\n
      was to be given for the purpose of clearance of title of CTS
\n      No.82.      Such permission was given also to the Defendan t<\/p>\n
      No.1 under Clause 3.4 of the final Development Agreement
\n      dated 26 th December, 2006.\n<\/p>\n
    21.     The Plaintiffs gave the required public notices.                             These
\n      public     notices      Exhibit- F,       F1      and      F2 ,   to     the     plaint,<\/p>\n
      specifically     show     that     the        Plaintiffs    are     negotiating          to
\n      purcha se the property of the Trust under CTS No.82.\n<\/p>\n
                                  ig                                                        The
\n      notices have been given on 29 th September, 2006.                                     The<\/p>\n
      negotiations were going on. Defendant No.3 was aware that
\n      Defenda nt       No.1     is    negotiating         to     obtain      finance \/ s u b-
\n      development rights .\n<\/p>\n
    22.     The negotiations did not fructify. On 5 th October, 2006
\n      the      Attorneys of Defenda nt No.1 wrote to the Plaintiffs
\n      setting out the negotiations between the parties and the fact<\/p>\n
      of several modifications having taken place between them,
\n      thereafter.      They stated in the said letter that it was “finally
\n      agreed” that the Defendan t                   No.1 would form a Limited<\/p>\n
      Company and enter into a development agreement with the
\n      Trust     and    immediately thereafter,                 the Plaintiffs           would
\n      purcha se       the   entire     share        holdings     of Defenda n t            No.1
\n      Company.          This    was     in terms          of the        requirement            of<\/p>\n
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\n                                      13<\/span><\/p>\n
      Defenda nt No.3 to allow a third party to take over sub-\n<\/p>\n
      development rights subject to Defendant No.1 being made
\n      personally liable.   The letter further states that the Plaintiffs<\/p>\n
      agreed to pay Defenda nt No.1 the entire agreed consideration
\n      on or before 30 th September, 2006, failing which on 1 st
\n      October, 2006 the MOU and all further underst a n di ngs<\/p>\n
      would stand cancelled, irrevoked and Rs.51 lakhs deposited
\n      by the Plaintiffs with Defenda nt No.1 would be forfeited. The<\/p>\n
      Defenda nt   No.1 formed a Private Limited Company and
\n      obtained a certificate of Incorporation on 5th September,<\/p>\n
      2004. The Defenda nt No.1 also claimed to have sent a draft
\n      Development Agreement to be entered into by them with the<\/p>\n
      Plaintiffs (which is not produced by any party in Court). The
\n      Attorneys of Defenda nt No.1 gave notice to the Plaintiffs,<\/p>\n
      that, as orally agreed in further negotiations, the Plaintiffs<\/p>\n
      failed and neglected to deposit the entire consideration in
\n      escrow with their Solicitors by 30 th September, 2006 and
\n      hence, the MOU dated 18 th May, 2006 stood cancelled and<\/p>\n
      Rs.51 lakhs stood forfeited.        The letter, therefore, show s
\n      negotiations carried on between the parties, as they had
\n      envisaged and incorporated in the last clause of the MOU<\/p>\n
      dated 18 th May, 2006 .\n<\/p>\n
    23.   The further negotiations showed a quant u m difference in
\n      the mode of payment        of consideration.        It showed the<\/p>\n
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\n                                            14<\/span><\/p>\n
      simulta neo u s     act    of Defenda nt          No.1     as     required         by<\/p>\n
      Defenda nt No.3 in their separate negotiations. The public
\n      notice which the Plaintiffs required to give and which were<\/p>\n
      permitted by Defendan t No.3 on 22 nd September, 2006 came
\n      to be given on 29 th September, 2006 a day before the oral
\n      negotiations between the Defenda nt No.1 and the Plaintiffs<\/p>\n
      were to culminate into the payment of consideration, for
\n      obtaining the development rights by the Plaintiffs.\n<\/p>\n
    24.   The    Plaintiffs     Attorneys,\n                                 ig              by their      letter      dated       19 th\n<\/pre>\n
      October, 2006 Exhibit- H, to the plaint, suggested further<\/p>\n
      modifications of the deal. Plaintiffs, offered to deposit entire
\n      consideration     with       their        Solicitors     with        irrevocable
\n      instr uction s to release them in favour of Defendant No.1<\/p>\n
      upon the completion of the trans actions and also offered to<\/p>\n
      obtain the ULC clearings, if it could not be obtained by
\n      Defenda nt No.1, as agreed in the MOU dated 18 th May, 2006.
\n      The further modifications suggested by the Plaintiffs show the<\/p>\n
      continuance of the negotiations and are inconsistent with a
\n      completed contract before that date.\n<\/p>\n
    25.   By a further letter of the Plaintiff’s Attorneys dated 13 th
\n      November, 2006 Exhibit- I-1 , to the plaint, the Attorneys
\n      enclosed a fair draft of the proposed MOU for the approval
\n      and comment s of the Defenda nt’s Attorneys.                          The letter<\/p>\n
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\n                                        15<\/span><\/p>\n
      stated that the “final docume nt s” would be executed within<\/p>\n
      two days after the MOU is finalised.           The fair draft is not
\n      annexed to the said letter in the plaint.               The affidavit of<\/p>\n
      Defenda nt      No.1   shows     that,    under      that       draft,       the
\n      consideration was increased and Defendant No.1 was obliged
\n      to form a Limited Company. The terms between the parties,<\/p>\n
      therefore, came to be modified again.         This itself show s that
\n      the earlier MOU dated 18 th May, 2006 was not the final<\/p>\n
      agreement.      The Attorneys of Defenda nt No.1, by their letter
\n      dated   14 th    November,
\n                              ig     2006,     Exhibit- I-2      acknowledged
\n      receipt of the draft of the proposed MOU.               They       stated in
\n      that letter that inspite of “Fresh” negotiations, and several<\/p>\n
      modifications there was no agreement between the parties
\n      and the proposed MOU was required to be further discus se d<\/p>\n
      and finalised.     They requested a meeting on 16 th November,<\/p>\n
      2006, so that the MOU could be executed by 17 th November,
\n      2006,   since     Defenda nt No.3 Trust was pressing hard for
\n      execution of their Development Agreement with Defenda nt<\/p>\n
      No.1.\n<\/p>\n
    26.   The affidavit of Defenda nt No.1 shows that even the said<\/p>\n
      modifications did not fructify. In fact further correspondence
\n      shows that meetings were held on 16 th November, 2006 and
\n      24 th November, 2006 between the Attorneys of the Plaintiffs
\n      and Defendan t No.1, but the agreement remained elusive.\n<\/p>\n
                                                        ::: Downloaded on – 09\/06\/2013 13:42:38 :::<\/span>
\n                                     16<\/span><\/p>\n
    27.   An E- mail is shown to have been sent by the Attorneys
\n      of Defendant    No.1 to the Attorneys of Plaintiffs on 16 th<\/p>\n
      November, 2006, part of Exhibit- R, to the plaint, annexing
\n      the draft Development Agreement between Defenda nt No.3
\n      and Defendan t No.1.\n<\/p>\n
    28.   On 28 th November, 2006 the Plaintiff’s Attorneys once<\/p>\n
      again wrote to the Attorneys of Defenda nt No.1, setting out
\n      certain terms orally agreed between the parties in several<\/p>\n
      meetings the parties had during that period.              This letter<\/p>\n
      shows entirely modified terms between the parties.                    The
\n      Plaintiffs were to pay Rs.1.40 Crores to the Trust and
\n      Rs.4.40 Crores as loan to Defenda nt No.1, upon Defenda n t<\/p>\n
      No.1 fulfilling their obligations in relation to the deal, being<\/p>\n
      the execution of the Development Agreement with the Trust,
\n      and the Assignment Agreement with the Plaintiffs to be kept
\n      in escrow along with an appropriate Loan Agreement and a<\/p>\n
      Power of Attorney.      The Plaintiff’s Attorneys called upon
\n      Defenda nt No.1 to perform those obligations and complete
\n      the deal. They annexed xerox copies of Demand Drafts to be<\/p>\n
      given by the Plaintiffs in favour of Defendan t No.3 as well as
\n      Defenda nt No.1.\n<\/p>\n
          This   sho w s   that   admittedly,   there      were        further
\n      negotiations between the parties, though the contents of this<\/p>\n
                                                  ::: Downloaded on – 09\/06\/2013 13:42:38 :::<\/span>
\n                                            17<\/span><\/p>\n
      letter have been denied in the letter of Attorneys of Defendant<\/p>\n
      No.1 dated 13 th December, 2006, Exhibi t- N, to the plaint. It
\n      can be seen that if they were as stated, they would result in<\/p>\n
      a completely     different     and     modified   agreement           with      the
\n      Plaintiffs.   The initial MOU dated 18 th May, 2006 which the
\n      Plaintiffs seek to enforce was completely given a go-by.                           A<\/p>\n
      further assign ment of the agreement, along with agreement
\n      and power of attorney were to be executed instead.\n<\/p>\n
    29.    The Attorneys of Defenda nt No.1, by their letter dated<\/p>\n
      28 th November, 2006 to the Plaintiffs’ Attorneys recorded two
\n      meetings held between the parties on 16 th November, 2006<\/p>\n
      and 24 th November, 2006 and stated that, no finality could
\n      be arrived at between the parties.            The Attorneys ultimately
\n      concluded     that   the     parties      were not    able to negotiate<\/p>\n
      material terms and retur ned the initial amou n t of Rs.51<\/p>\n
      lakhs paid by Plaintiffs, at the time of the execution of the
\n      MOU dated 18 th May, 2006 along with interest as agreed<\/p>\n
      thereon as per Clause 4 of the said MOU. The negotiations
\n      between the parties was stated to have stood withdrawn and
\n      terminated.    A cheque for Rs.52,71,025 \/ – of Defenda nt No.1<\/p>\n
      came to be sent to the Plaintiffs.\n<\/p>\n
    30.    Defenda nt No.1 accepted initial payment of Rs.54 lakhs
\n      from Defenda nt No.7 on 25 th November, 2006, that was the<\/p>\n
                                                           ::: Downloaded on – 09\/06\/2013 13:42:38 :::<\/span>
\n                                          18<\/span><\/p>\n
      day after last meeting with the Plaintiffs on 24 th November,<\/p>\n
      2006       which   did    not    culminate         in      any        agreement.
\n      Conseque n tly under the letter dated 28 th November, 2006<\/p>\n
      Defenda nt     No.1 retur ned      the       initial payment            made        on
\n      security with interest thereon.\n<\/p>\n
    31.       The Plaintiffs’ Attorneys, of course , retur ned the said
\n      cheque along with the letter dated 31 st November, 2006 and<\/p>\n
      insisted that there was a binding agreement between the
\n      parties.\n<\/p>\n
                 The letter does not show, which was that agreement
\n      that remained binding between them and which the Plaintiffs<\/p>\n
      sought to enforce.\n<\/p>\n
    32.   By further letters dated 7 th December, 2006 and 15 th<\/p>\n
      December, 2006, Exhibits- M and O, to the plaint, Plaintiffs’
\n      Attorneys     stated     that   the      Plaintiffs      have       learnt        that
\n      Defenda nt No.1 was trying to sell off the property to a third<\/p>\n
      party      committing     breach        of   the      agreement            between
\n      Defenda nt No.1 and the Plaintiffs.\n<\/p>\n
    33.   Alongside      the    negotiations         between         Plaintiffs         and
\n      Defenda nt No.1, Defenda nt No.3 and Defendant No.1 also
\n      negotiated for development of the property of Defendant
\n      No.3.    These negotiations, which were conseque n t upon the<\/p>\n
                                                              ::: Downloaded on – 09\/06\/2013 13:42:38 :::<\/span>
\n                                      19<\/span><\/p>\n
      initial MOU between Defenda nt No.3 and Defenda nt No.1<\/p>\n
      dated 30 th Ju ne, 2005 culminated in the draft Development
\n      Agreement of November, 2006, which came to be finalised<\/p>\n
      between them under the Development Agreement dated 26 th
\n      December, 2006, Exhibit- P, to the plaint.          The negotiations
\n      between Defenda nt No.1 and the Plaintiffs during November,<\/p>\n
      2006 remained inconclusive.\n<\/p>\n
    34.   Whilst the draft Development Agreement between the
\n      Defenda nt No.3 and Defenda n t No.1 were being considered<\/p>\n
      by and between those parties, and during which period the<\/p>\n
      meetings   with   the   Plaintiffs   resulted      in     an      impasse,
\n      Defenda nt No.7 came to be considered for being granted the
\n      development rights.     A day after the last meeting with the<\/p>\n
      Plaintiffs, Defenda nt No.1 accepted the earnest amou nt of<\/p>\n
      Rs.54 lakhs from Defenda nt No.7.\n<\/p>\n
    35.   Defenda nt No.1 and Defenda nt No.7 entered into a joint<\/p>\n
      Development Agreement on 29 th Jan u a ry, 2007, Exhibit- Q,
\n      to the plaint.    Defenda n t No.1 is shown as a principle
\n      developer thereto.    Defenda nt No.7, a part ners hip firm, are<\/p>\n
      shown as co- developer.    The agreement between Defenda nt
\n      No.3 and Defenda nt No.1 to have a sub- development for
\n      development of CTS No.82 while keeping Defenda nt No.1
\n      personally liable to get the obligations in respect of CTS<\/p>\n
                                                      ::: Downloaded on – 09\/06\/2013 13:42:38 :::<\/span>
\n                                                20<\/span><\/p>\n
      No.61      complied      were      recited      and     agreed        between          the<\/p>\n
      Defenda nt No.1 and Defenda n t No.7. Defenda nt No.1 was to
\n      have      60%    share     in    the     development          as     the      principal<\/p>\n
      Developer and Defenda nt                No.7 were to have 40% share
\n      therein.    They would have joint obligations in respect of the
\n      development of CTS No.82 and be responsible to remove<\/p>\n
      slum dwellers from CTS No.61 within 12 mont hs of the
\n      execution        of      the       Joint        Development              Agreement.\n<\/p>\n
      Consideration         amount s      came       to be paid            in six equal
\n      installment s before the execution of the said docume nt, the<\/p>\n
      first of the amoun t having been paid, as aforesaid, on 25 th<\/p>\n
      November, 2006 after the last of the uns ucces sful meetings
\n      between Defenda nt No.1 and the Plaintiffs.\n<\/p>\n
    36.   A reading of the agreement s between the various sets of<\/p>\n
      parties     being       Defenda nt         No.3       and     Defenda nt            No.1,
\n      Defenda nt No.1 and the Plaintiffs and Defenda nt No.1 and
\n      Defenda nt No.7 shows that from the inception, Defenda nt<\/p>\n
      No.3, who are the owners of the land required a unique
\n      development of their land under which they would sell CTS
\n      No.82      and    obtain        vacant        possession        of      CTS       No.61.\n<\/p>\n
      Defenda nt       No.3     knew         and      accepted         that       for     such
\n      development,          Defenda nt       No.1     was    not      to be        the     only
\n      contracting party.         Defendan t No.3 allowed the Plaintiffs to
\n      give public notice for clearance of the title of CTS No.82.\n<\/p>\n
                                                                  ::: Downloaded on – 09\/06\/2013 13:42:38 :::<\/span>
\n                                           21<\/span><\/p>\n
      They allowed Defendant No.1 to sub- contract, their right by<\/p>\n
      a   sub- development        agreement        or     a    joint      development
\n      agreement      provided     that    the    Defendan t          No.1       remained<\/p>\n
      personally liable.        Negotiations between the two sets of
\n      parties – Defendan t No.3 and Defenda nt No.1, Defenda nt
\n      No.1 and the Plaintiffs moved simulta neou sly.                         The initial<\/p>\n
      MOU between Defenda nt No.1 and the Plaintiffs came to be
\n      modified from time to time by both the parties orally as well<\/p>\n
      as in writing.       Various meetings came to be held between
\n      them from time to time until 24 th November, 2006.\n<\/p>\n
                                ig                                                Nothing\n      materialised.        Defendan t No.7 came into the picture from\n                              \n      25 th    November,      2006.      The    initial       payment          made        by\n<\/pre>\n
      Defenda nt No.7 was not conditional as was the payment of
\n      the Plaintiffs. It was, as would be accepted in a Development<\/p>\n
      Agreement – as earnest money paid before an agreement<\/p>\n
      could be executed, which could be enforced by the parties.\n<\/p>\n
    37.       Though the Plaintiffs have sought specific performa nce<\/p>\n
      of their initial MOU dated 18 th May, 2006, in this Suit, the
\n      Plaintiffs Attorneys’ letters sent from time to time to the
\n      Attorneys      for    Defenda nt    No.1     did        not     spell      out      the<\/p>\n
      requireme nt of specific performa nce of that agreement.                              In
\n      fact their letter dated 30 th November, 2006 did not show
\n      which was the binding agreement and their letter dated 28 th
\n      November, 2006 showed new modified terms. The position of<\/p>\n
                                                               ::: Downloaded on – 09\/06\/2013 13:42:38 :::<\/span>
\n                                       22<\/span><\/p>\n
      the parties can be better illustrated in a column ar statemen t<\/p>\n
      showing how two sets of parties dealt with the suit property
\n      simulta neo u sly.\n<\/p>\n
    Defend a n t No.1 and 3      Defend a n t No.1         Defend a n t
\n                                  and Plaintiff            No.1 and 7<\/span><\/p>\n
    30. 6 . 2 0 0 5
\n    MOU\n<\/p>\n
                              18. 5. 2 0 0 6<\/p>\n
                              MOU\n<\/p>\n
    26. 7 . 2 0 0 6
\n    Order of Joint Charity<\/p>\n
    Commissioner<\/p>\n
                              22. 9. 2 0 0 6
\n                              No objection letter by
\n                              Defendant No.3 to<\/p>\n
                              publish notices\n<\/p>\n
                              29. 9. 2 0 0 6<\/p>\n
                              Notices published by
\n                              Plaintiff
\n                              5.10. 2 0 0 6<\/p>\n
                              Letter of termination
\n    November, 20 0 6          13. 1 1 . 2 0 0 6
\n    Draft  MOU between Modified MOU<\/p>\n
    Defendant Nos.1 and 3. submitted by Plaintiff
\n                           to Defenda nt No.1<\/p>\n
                                                  ::: Downloaded on – 09\/06\/2013 13:42:38 :::<\/span>
\n                                       23<\/span><\/p>\n
    Defend a n t No.1 and 3      Defend a n t No.1             Defend a n t
\n                                  and Plaintiff                No.1 and 7<\/span><\/p>\n
                              16. 1 1 . 2 0 0 6<\/p>\n
                              Draft MOU between
\n                              Defendant No.1 and
\n                              3 emailed to the
\n                              Plaintiff<\/p>\n
                              16. 1 1 . 2 0 0 6 and\n<\/p>\n
                              24. 2 2 . 2 0 0 6
\n                              Meetings<\/p>\n
                                                            25.1 1 . 2 0 0 6
\n                            ig                              Earnest
\n                                                            amou nt paid\n<\/p>\n
                              28. 1 1 . 2 0 0 6<\/p>\n
                              Rs.51,00,000 \/ – with
\n                              interest refunded by
\n                              DefendantNo.1         to
\n                              Plaintiff and retur ned<\/p>\n
                              by Plaintiff\n<\/p>\n
                              28. 1 1 . 2 0 0 6<\/p>\n
                              Plaintiff offered to
\n                              pay Rs.1.40 Crores
\n                              and Rs.4 Crores to<\/p>\n
                              Defendant No.3 and
\n                              1<\/span>\n<\/p>\n
    26. 1 2 . 2 0 0 6
\n    MOU between<\/p>\n
    Defendant No.1 and 3<\/span><\/p>\n
                                                      ::: Downloaded on – 09\/06\/2013 13:42:38 :::<\/span>
\n                                               24<\/span><\/p>\n
    Defend a n t No.1 and 3             Defend a n t No.1              Defend a n t
\n                                         and Plaintiff                 No.1 and 7<\/span><\/p>\n
                                                                    29.1. 2 0 0 7<\/p>\n
                                                                    Joint
\n                                                                    Development
\n                                                                    Agreement
\n                                                                    between<\/p>\n
                                                                    Defenda nt 1
\n                                                                    and 7<\/p>\n
    38.    Therefore, there is no specific agreement between the
\n      Plaintiffs and         Defendant
\n                                   ig         No.1, that      can     be specifically
\n      enforced.       When no specific agreement that can be enforced<\/p>\n
      is shown, no relief of Specific Performance can be granted in
\n      the Suit.       Conseque n tly, no interim relief in aid of the final
\n      relief can also be granted.\n<\/p>\n
    39.    The Plaintiffs’ seminal case, therefore, falls. Further
\n      rights created by Defenda nt No.1 must, therefore, be allowed
\n      to prevail. The Plaintiffs have failed to show any legal right<\/p>\n
      to specifically enforce their agreement with Defenda nt No.1.
\n      It is incomprehe n sible how the Plaintiffs can specifically
\n      enforce        an     agreement     between       Defendan t          No.3        and<\/p>\n
      Defenda nt          No.1   to   which     they   were     not     parties.        The
\n      agreement with Defenda nt No.7 results as a matter of course
\n      purs u a n t    to the negotiations          between the Plaintiffs and
\n      Defenda nt No.1 having failed.\n<\/p>\n
                                                              ::: Downloaded on – 09\/06\/2013 13:42:38 :::<\/span>
\n                                           25<\/span><\/p>\n
    40.      Mr. Madon has sought to show how the earnest amou nt
\n      was sought to be paid by Defenda nt No.7 on 25 th November,<\/p>\n
      2006 before the final notice of termination given by the
\n      Attorneys     of Defenda nt        No.1     to    the    Plaintiffs        on     28 th
\n      November,     2006,   in which           that    fact is not mentioned.\n<\/p>\n
      Defenda nt No.1 were free to enter into any agreement with
\n      the third party, since their negotiations had failed with the<\/p>\n
      Plaintiffs.   So soon as any contract u al relations hip came to
\n      be made by Defendan t No.1, their Attorneys have retur ned<\/p>\n
      the Plaintiffs’ cheque with the agreed amoun t of interest.\n<\/p>\n
      There is no legal duty upon Defenda nt No.1 to disclose their
\n      further contract with any other party.                  Mr. Madon has also
\n      sought    to show how and when agreement                           between the<\/p>\n
      Defenda nt No.1 and Defenda nt No.7 was got registered and<\/p>\n
      when the stamp duty was paid.                   Aside from seeing that all
\n      that    was after the last         meeting between              Plaintiffs and
\n      Defenda nt     No.1   on   24 th    November,           2006,       it    becomes<\/p>\n
      immaterial for this Court to consider those dates.                              Since
\n      there were no legal rights that the Plaintiffs could seek to
\n      enforce under their initial MOU with Defenda nt No.1 or upon<\/p>\n
      the MOU between Defendan t No.3 and Defendant No.1, the
\n      acts that culminated into the final contract between the
\n      Defenda nt No.1 and Defenda n t No.7 need not be considered
\n      by the Court. The fact remains that the negotiations did not<\/p>\n
                                                              ::: Downloaded on – 09\/06\/2013 13:42:38 :::<\/span>
\n                                     26<\/span><\/p>\n
      culminate into an agreement in favour of the Plaintiffs. The<\/p>\n
      negotiations have culminated into the Joint Development
\n      Agreement between Defenda nt No.1 and Defendant No.7.\n<\/p>\n
    41.   In fact I have been told that the Plaintiffs failed to obtain
\n      an ad- interim order of injunction and hence, the further<\/p>\n
      agreement came to be made.\n<\/p>\n
    42.   It is impossible to grant specific performa nce of the
\n      initial MOU dated 18 th May, 2006 to the Plaintiffs. All other<\/p>\n
      agreement s follow accordingly.\n<\/p>\n
    43.   It is, therefore, too late in the day to grant any injunction
\n      to the Plaintiffs also.\n<\/p>\n
    44.   The Notice of Motion is, therefore, dismissed with no
\n      order as to costs.\n<\/p>\n
                                         (SMT. ROSHAN DALVI, J.)<\/p>\n
                                                  ::: Downloaded on – 09\/06\/2013 13:42:38 :::<\/span>\n <\/p>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court M\/S. Star Apparels Pvt. Ltd vs The Plaintiffs Have Essentially … on 21 August, 2008 Bench: R. S. Dalvi 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. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-62130","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nM\/S. Star Apparels Pvt. 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