1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.2867 OF 2009 IN SUIT NO.1563 OF 2009 Westffield Entertainment Pvt.Ltd. .. Plaintiffs Versus Asian Food Products Ltd. .. Defendants. Mr.Virag Tulzapurkar, Senior Advocate with Simil Purohit with H.K.Sudhakara i/b. Khaitan & Co. for plaintiffs Mr.N.G.Thakkar, Senior Advocate with Trupti Shetty & Darshan Mehta i/b. Dhruve Liladhar & Co. for defendants. CORAM : S.C.DHARMADHIKARI, J. RESERVED ON : 20th August 2009 PRONOUNCED ON : 7th September 2009. P.C. 1] Heard Mr.Tulzapurkar, learned Senior Counsel for plaintiffs and Mr.N.G.Thakkar, learned Senior Counsel for defendants. Perused the plaint and the annexures so also affidavit in reply and rejoinder. I have perused the compilation of documents handed in. 2 2] With the consent of learned Senior Counsel the motion is disposed of finally with this order. 3] By this motion, the plaintiffs seek the following interim relief. “(a) That pending the hearing and final disposal of this suit, that this Hon’ble Court may be pleased to direct the defendants, their Advocates, their servants, agents and officers of the defendants or any person or persons claiming through them from in any manner encashing and/or collecting the FDR No.002845110002708 dated 21st November 2007 drawn on Bank of India (Exh.N) or any proceeds thereof.” 4] The suit has been instituted by the plaintiffs for a declaration that the defendant is not entitled to a sum of Rs.6.27 Crores or any part thereof and, therefore, the fixed deposit receipt more particularly described in prayer clause (b) of the plaint be returned to the plaintiffs. 3 5] The F.D. Receipt is (Annexure M to the Plaint) stated to be issued because it is the case of the plaintiff that the defendant is a lessee of Plot No.18(pt) and plot No.18/1 totally admeasuring 17180 sq.mtrs., situate at Satpur Industrial Area, M.I.D.C., within the village limits of Satpur, Taluka and Registration sub-District Nashik. 6] This is a land leased by M.I.D.C. The M.I.D.C., has leased to the defendant in addition to plot No.18, described above, another plot No.17 as well. However, plot No.17 was leased earlier whereas the area described more particularly hereinabove came to be leased subsequently. Since the defendant was put in possession it constructed a factory building and structures thereon and were in continuous use and occupation of the same. It appears from the record that the defendant desired to transfer and assign the residual period of its lease hold rights in respect of the lands in favour of a third party and accordingly negotiations took place between the plaintiff and defendants. Pursuant to the negotiations on or about 21st November 2007, a concept Memorandum came to be executed and along with it, several documents and more 4 particularly those listed in para 4(f) of the plaint were also exchanged. It is further not in dispute that simultaneously with the execution of the Concept Memorandum the purchaser/ plaintiff was to deposit with M/s.Vigil Juris (Advocates and Solicitors for the defendants) an F.D.R. For Rs.6.27 Crores with a maturity period of six months. 7] Annexure B is a copy of the Concept Memorandum and it is stated that in furtherance of the same, the plaintiff deposited transfer charges with MIDC, various cheques and pay orders so also F.D.Receipts which were payable to the defendants on the defendants complying with the terms and conditions. The plaintiffs investigated the title of the defendants in respect of the lands in the records of MIDC, but since the original lease deeds were lost, a public notice was issued and thereupon, the defendants moved MIDC seeking its consent for assignment/ transfer of the lands. Application was submitted on 23rd November 2007. It is stated in the plaint that possession of the property on execution of the deed of transfer came to be handed over and it is not necessary to refer to the obligations between parties pertaining to several documents save and except referring to the fact that under the Memorandum of Agreed Terms 5 (MOAT for short) it is agreed that the defendant was obliged to obtain the requisite permission from MIDC within 90 days from 30th November 2007. The plaintiffs were desirous of putting the land for commercial use. The permissions were to be obtained and, therefore, the defendants applied to the Authorities. 8] It is stated that initially MIDC granted permission by a letter dated 21st May 2008 but immediately on the very next date by a subsequent order the permission was rejected. 9] The entire basis of the arguments of Mr.Tulzapurkar, learned Senior Counsel for plaintiff is that as a result of this cancellation, the defendant could not be said to have “duly obtained valid, subsisting permission” for change of land user as contemplated in clause 3(a) of the MOAT. Once, this is not a permission duly obtained as required under clause 3(c) thereof, then, the plaintiff was entitled to invoke clause 5(b) and obtain such permission. The plaintiffs, therefore, addressed a letter dated 23rd June 2008 invoking this clause. This does not absolve the defendants of their obligations to obtain necessary permissions from 6 MIDC. Such being the case and the permission being obtained for and on behalf of the defendants, the defendants are not entitled to the sum of Rs. 6.27 Crores or any part thereof. In these circumstances, the ad-interim order dated 10th August 2009 be continued and the motion be made absolute in terms thereof. 10] On the other hand, Mr.Thakkar, learned Senior Counsel appearing for defendants, firstly contended that this Court has no jurisdiction to entertain and try this suit. He submits that the defendant has already filed special civil suit No.80 of 2009 in the court of Civil Judge, Senior Division, Nashik against the plaintiffs claiming permanent injunction and other reliefs. Plaintiffs who are defendants in that suit were duly served with the suit summons. They filed an application (Exh.19) invoking section 9A of C.P.C. By contending that the Court at Nashik has no jurisdiction to entertain and try the suit. However, that objection has been over-ruled and, therefore, as a counter blast to that suit in Nashik, the instant suit has been filed by the plaintiffs. Further, there is suppression of material facts by the plaintiffs. The plaintiffs are guilty of deliberately not annexing material and relevant correspondence. Mr.Thakkar invited 7 my attention to para 4 of the affidavit in reply and more particularly a letter (annexed as Exh.1 to the affidavit in reply) dated 23rd June 2008. It is urged that the plaintiffs are also guilty of obtaining ex parte order by falsely stating that the defendants have no office at Mumbai and at the registered office at Nashik, the package has been despatched. However, that statement was false because at no stage was any attempt made to serve the defendants at Mumbai. Further, it is false to state that there is no branch office at Mumbai. Defendants had no branch office at Mumbai but their registered office was at Mumbai, now it is at Nashik. Therefore, by falsely stating that there is an office at Mumbai and, therefore, the service was effected thereat but refused, an ad-interim order has been made. These are false statements to the knowledge of the plaintiffs and, therefore, ad-interim order must be vacated. 11] Without prejudice to the above contentions, Mr.Thakkar, learned Senior Counsel urges that from the plaint in the suit filed by the defendants at Nashik, their stand becomes clear and it is that no steps have been taken by the plaintiffs for obtaining permission for change of user from MIDC. The change of user was already obtained on 21st May 8 2008 by the defendants. It means that they have complied with their obligations to get the permission from MIDC. In terms of the clauses of MOAT, it is clear that there was an obligation on the part of the plaintiffs to obtain permission, if they had exercised the option under clause 5(b) (ii). However, knowing fully well the implications of the clauses and with a view to wriggle out of the same, plaintiffs appear to have used their influence with MIDC and procured a letter dated 22nd May 2008 from MIDC allegedly revoking permission. The defendants have never been served with the letter and despite demands by the defendants, plaintiffs never sent a copy of that letter to them. The letter does not show cancellation of conversion permission dated 21st May 2008 in any event. Assuming without admitting that plaintiffs were entitled to exercise the option by invoking clause 5(b)(ii) of the MOAT and even if it is assumed that there is valid exercise of such option, no further steps are taken by the plaintiffs. In these circumstances, defendants cannot be prevented from taking the FDR back and hence, the motion be dismissed. 12] The only question that arises for my consideration is whether the plaintiffs have made out any prima facie case, whether balance of 9 convenience is in their favour and who will suffer irreparable harm, loss and injury in case the ad-interim reliefs are not granted. 13] From the averments in the plaint, it is apparent that the principle relief is of a declaration that defendants are not entitled to Rs.6.27 Crores or any part thereof. 14] It is not in dispute that the plaintiffs have in compliance with the terms and conditions agreed between the parties, deposited FDR for Rs. 6.27 Crores with Mr. P.A.Jani of M/s. Vigil Juris with maturity period of six months. The amount has been deposited and memorandum of agreed terms dated 30th November 2007 is relied upon. This was a document executed after the concept memorandum dated 21st November 2007. The date of MOAT is 30th November 2007. Since the parties placed reliance upon the MOAT to the extent relevant, I will refer to the same. The MOAT recites that the plaintiffs purchased from the Vendors – defendants immovable property and obtained full and complete possession prior to the execution of MOAT. Prior to the date of assignment under which the possession has been obtained, a declaration 10 is made regarding circumstances in which the title deeds and documents of the immovable property have been lost and/or misplaced and are not being found despite due and diligent search of the same. Receipt of certain sums is confirmed in MOAT and it is stated that MOAT is supplementary document to the deed of assignment. The property was assigned in favour of the plaintiffs, according to plaintiffs for commercial user, although the same belongs to MIDC and is granted on long lease basis to the defendants. Concurrence and consent/ approval of MIDC is required for change of user from Industrial to commercial. Till the compliances are made by parties in terms of their respective obligations under the MOAT, a Fixed Deposit Receipt of Rs.6.27 Crores in the name of purchaser/ plaintiffs has been kept with the Advocates and Solicitors for the vendors/ defendants. It is stated in clause 1(c) that the Vendors are yet to fulfill the terms, covenants and conditions set out in MOT and, therefore, the vendors will have to fulfill the obligations contained in clause 3. Clause 3 states that within 90 days from the date of MOAT the vendors/ defendants have to duly obtain from MIDC permission in writing, permitting the property to be used for the purpose mentioned in the agreement and as and when the vendor complies with its obligations 11 in clause 3, except clause 3(c), the vendor shall intimate the same in writing to the purchaser and produce documents confirming such compliances by the vendors. After the Vendor complies with its obligations under clause 3, it will obtain confirmation in writing from the purchaser to that effect and only on such confirmation in writing being obtained by the vendor from the purchaser and Advocates for the purchaser/ plaintiffs writing to the vendors’ advocate confirming compliances, that the FDR was to be paid to the vendors. 15] Clause 5 states that in the event there is a delay beyond a period of 90 days from the date of MOAT in the vendor complying with its obligations under clause 3, then, the purchaser shall be entitled to exercise the option mentioned in clause 5(b) and can complete all matters or works specified in clause 3 which the vendor has not carried out or completed within the aforesaid period. In the event, the purchaser exercises this option under clause 5(b)(ii), then, it will be entitled to the cost, charges and/or expenses which it has incurred in complying with the obligations of the vendors and thereupon, the FDR was to be returned and, there was no question of encashing the same. 12 16] The only question is whether the vendor has complied with the obligations. In this behalf if the letter of MIDC dated 21st May 2008, a copy of which is annexed as Annexure G to the suit is perused, it is clear that the defendant – vendor made an application on 20th December 2007 to MIDC and the MIDC addressed a letter on 28th December 2007 asking for certain documents as mentioned therein. 17] On 21st May 2008, vendors addressed a letter to the purchasers – plaintiffs in the below mentioned terms:- “With reference to the above subject please find attached herewith permission from MIDC (subject to payment) for change of use from industrial to commercial. Since all the obligations are hereby completed we are collecting the balance of the consideration from Mr.P.A.Jani on 26th May 2008.” 18] It is clear that both letters are addressed by MIDC to the plaintiffs. 13 This means that the plaintiffs had addressed a letter dated 20th December 2007. However, while making a reference to Annexure G in the plaint, what has been stated in para 9 is that the MOAT was executed on 30th November 2007. Defendants applied to MIDC for requisite permission on 20th December 2007 and thereafter, series of correspondence exchanged between parties. A reference was made to a letter dated 18th December 2007 forwarding a draft of the letter to be sent to MIDC. Thus, although, the draft is prepared by the plaintiffs and is approved by the defendants, for all practical purposes, plaintiffs have treated the date of 20th December 2007 as the date of application to MIDC for conversion of land from industrial to commercial. They have very clearly stated that it is the defendants who applied to MIDC for requisite permission. MIDC asked for certain compliances which also are stated to have been forwarded. It is, therefore, apparent that Exh.G is treated as a communication from MIDC on the application made by the defendants. If within 90 days, the application seeking conversion has been made by the defendants and the letter of 21st May 2008 granting permission is also issued by MIDC, then, how the plaintiffs are alleging non compliance by the defendants with their obligations is prima facie not clear to me at all. 14 That the letter of 21st May 2008 from MIDC was received is also duly communicated by the defendants to the plaintiffs. The plaintiffs have nowhere stated in the plaint that the letter from MIDC obtained on 21st May 2008 is beyond stipulated period of 90 days and, therefore, there is a failure on the part of the defendants to comply with their obligations under clause 3(a) of the MOAT. The plaint allegations proceed on the basis that cancellation of the permission by MIDC is not complete compliance with this obligation as the words appearing therein are “duly obtained from MIDC” . The words “duly obtained” are pressed into service more particularly because there is alleged cancellation of the permission of MIDC. Thus, if the permission had not been cancelled, then, there is due compliance or else not. This appears to be the tenor of the plaint allegations. The averments in the plaint would demonstrate that the defendants had forwarded the application within 90 days and all that was required to be done by them in terms of clause 3(a) was to obtain permission in writing. Plaintiffs are relying upon the words “duly obtained”, but they have themselves annexed the letter of MIDC dated 21st May 2008. That such a letter has been received is undisputed (see para 10 of the plaint) 15 19] However, the plaintiffs now rely upon the subsequent letter/ order dated 22nd May 2008 issued by MIDC revoking its earlier permission of allowing the use of the said land for commercial purpose. The defendants do not admit issuance of any such letter or in any event receipt of the same from MIDC. On the other hand, the defendants in their affidavit in reply have (para 10) stated that they have not been served with the alleged letter dated 22nd May 2008 and despite demands, the plaintiffs had never sent a copy of the said letter to them. It is only when the summons in the present suit was served along with the plaint, defendants have been able to see the copy of the letter Exh.I to the plaint. This letter does not show cancellation of conversion permission as is falsely alleged in any event is the defendants’ version. Thus, the defendants are not admitting receipt of the letter dated 22nd May 2008. Therefore, the plaintiffs will have to prove the plaint allegations by demonstrating that the letter dated 21st May 2008 cancelling the permission was received and the contents thereof duly disclosed to the defendants or that they have knowledge of the same. More so, when the defendants are alleging that this letter has been procured by the plaintiffs from MIDC. 16 20] It is further clear that the defendants are also alleging suppression of material fact by the plaintiffs. The plaintiffs have alleged in the plaint that upon failure of the defendants to comply with their obligations under clause 3 of the MOAT, plaintiffs exercised their option and approached the MIDC for the necessary permission. However, whether there has been a breach of the obligation or not by the defendants, whether the MIDC’s letter of alleged revocation can be construed as breach of the obligations by the vendors entitling the plaintiffs to invoke clause 5 are all matters which cannot be decided at an interlocutory stage. More so, when the defendants are alleging that the plaintiffs purported to invoke clause 5(b) (ii) of MOAT by a letter dated 23rd June 2008 and that this letter is suppressed by the plaintiffs. This letter is stated to be addressed much after the plaintiffs received the MIDC permission and its alleged subsequent cancellation. As far as the allegation regarding the letter of 23rd June 2008 being suppressed is concerned, what the plaintiffs have in para 8 of their rejoinder stated that they have merely exercised their right under clause 5(b) of the MOAT. However, plaintiffs have given virtually no explanation as to why contents of this letter have not been referred to 17 in the plaint, much less annexing a copy thereof. Thus the plaint allegations proceed on the basis of breach of the obligations under clause 3 of MOAT by the defendants but there is complete silence as regards plaintiffs’ attempts to comply with the same. The letter dated 23rd June 2008 is referred in para 13 of the plaint. However, whether addressing such letters would mean that the plaintiffs have taken necessary steps as contemplated under clause 5 so as to entitle them to get the benefit of clause 5(d)(aa to dd) is something which will have to be proved by them and by the plaint allegations and some letters, it will not be proper to assume that the obligations of the purchaser (plaintiffs) have been complied by them. Beyond annexing a letter of 6th April 2009, addressed by MIDC to them, would not be enough to prima facie arrive at any such conclusion. Thus, breach of the allegations by the defendants as alleged and taking over of the same and completing them by the plaintiffs so as to entitle them to return of FDR and reimbursement of costs, charges and expenses are matters which would require evidence being led by parties. It is not possible to conclude that there is a violation straightaway. Thus, it is a money claim fr which no interim injunction can be issued, much less as prayed. It would mean passing final orders at this stage itself. 18 21] For the aforementioned reasons and finding that there is some substance in the contentions of Mr. Thakkar that this suit is a counter blast to the defendants suit pending in Nashik court, I am of the opinion that the plaintiffs have failed to make out a prima facie case for grant of interim reliefs in terms of the prayers in the notice of motion or continuation of the ad-interim order dated 10th August 2009. 22] In the result, the notice of motion fails and is dismissed but without any orders as to costs. 23] I have to clarify that all observations and findings in this order are tentative and prima facie. They shall not influence the outcome of the instant suit. They shall not prevent the plaintiffs from seeking reliefs in terms of prayers in the present suit so also applying for appropriate reliefs in the suit instituted against them by the defendants and pending in the Court at Nashik. All contentions and pleas of both sides on jurisdiction, maintainability and merits are expressly kept open. This order will not affect the plaintiff’s defences in the suit filed against them by defendants 19 and pending in the court at Nashik. The learned Judge trying that suit must not influence himself with any of these observations and findings but shall try the suit independently thereof, on its own merits and in accordance with law. With this clarification, the motion is dismissed. No costs. However, the defendants will have to abide by the further orders in both suits and payment of monies under FDR or encashment thereof would be subject to the outcome of both suits and also any orders therein. 24] At this stage, Mr.Purohit appearing for the plaintiffs prays that the ad-interim order be continued for a period of two weeks to enable the plaintiffs to take out appropriate proceedings. Mr.Thakkar appearing for the defendants clarifies that there was no ad-interim order but there was a statement of understanding between parties that until the order is pronounced, the FDR will not be encashed. 25] Having regard to the view taken by me I do not deem it necessary to continue the ad-interim order any further. The prayer in that behalf is rejected. (S.C.DHARMADHIKARI, J)