1 nms-1251-s-890-06.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION mst NOTICE OF MOTION NO. 1251 OF 2006 IN SUIT NO. 890 OF 2006 Satyapal Ramprakash Khanna … Plaintiff. Versus Vipul Nandkumar Khanna & Anr. … Defendants Mr. Oven J. Menezes i/by P. R. Prabhu for Plaintiff Mr. Vivek Salunkhe for Defendant No.1 Mr. G. V. Bhagway i/by Divekar & Co. for Defendant No.2 CORAM : S. J. KATHAWALLA J. RESERVED ON : 14TH MARCH 2011. PRONOUNCED ON: 13TH APRIL 2011. PC : 1. The Plaintiff is the cousin of the Defendant Nos. 1 and 2 who are brothers. According to the Plaintiff the mother of the Defendant Nos.1 and 2 (now deceased) and the Defendant No. 1, as the party of the First Part, and the Plaintiff as the Party of the Second Part had executed a Memorandum of Understanding dated 23rd June 2004 (the said MOU) wherein it was agreed that the Party of the First Part will release/transfer/ assign their right, title and interest inherited through late Mr. Nandkumar Roopchand Khanna (father of the 1 2 nms-1251-s-890-06.doc defendants) in the properties more specifically mentioned in Schedule I to IV of the MOU in favour of the Party of the second Part for a total consideration of Rs.25,00,000/- (Rupees Twenty Five Lakhs). According to the Plaintiff since the mother of the Defendants (now deceased) and the Defendant No.1 failed to comply with their obligations under the MOU, the Plaintiff has filed the present Suit seeking a declaration that the said MOU is valid, subsisting and binding upon the Defendants and further seeking orders and directions against the Defendants to specifically perform the said MOU. According to the Plaintiff since the properties mentioned in Schedules II and IV of the said MOU are tenanted premises, the Plaintiff has in the present suit prayed for an order and direction against the Defendants to execute the necessary documents in conformity with the terms of the MOU as regards Schedules I and III of the MOU in favour of the Plaintiff and has obtained leave under Order II Rule 2 of the Civil Procedure Code to take out proceedings seeking appropriate reliefs qua the tenancy rights in the properties described in Schedules II and IV of the MOU. The Plaintiff has in the Notice of Motion sought interim reliefs only to the extent of 2/3rd of the 50% share in the property in Schedule I and 2/3rd of 16.67% share of the property in Schedule III of the said MOU. The Plaintiff has not claimed any relief pertaining to the share of the Defendant No.2 in the properties described in Schedules I and III of the MOU which Defendant No.2 has inherited in his own right as the heir of the deceased Nandkumar Roopchand Khanna. 2 3 nms-1251-s-890-06.doc 2. The facts as narrated by the Plaintiff in respect of the properties described in Schedule I to IV of the said MOU are briefly set out hereunder : A : SCHEDULE - I According to the Plaintiff on 19th April 1962 the property described in Schedule –I of the MOU was purchased and owned by his father late Ramprakash Khanna and his uncle late Nandkumar Khanna (father of the Defendants) and the said property was developed by constructing an industrial gala consisting of ground + two floors on the land. The father of the Plaintiff late Ramprakash Khanna died on 9th December 2001. The 50% share of Ramprakash Khanna in the property described in Schedule – I to the MOU is bequeathed to the Plaintiff under the Will of his deceased father Ramprakash Khanna which Will has been probated. The uncle of the Plaintiff Mr. Nandkumar Khanna died intestate at Mumbai on 7th September 1989 leaving behind his legal representatives namely Ms. Sudershan Nandkumar Khanna i.e. his widow and his two sons i.e. the Defendants abovenamed. On the death of Nandkumar Khanna his widow Ms. Sudershan Khanna (now deceased) and his two sons Vipul Khanna and Umesh Khanna (Defendant Nos. 1 and 2 herein) as his legal representatives became entitled to one third share each of the 50% share of the deceased Nandkumar Khanna in the property described in Schedule –I of the said MOU. According to the Plaintiff the Defendant No.1 and his late mother Sudershan Khanna, vide the said MOU agreed to transfer their respective 1/3rd share in the 50% share of Shri Nandkumar Khanna, in 3 4 nms-1251-s-890-06.doc the property described in Schedule I of the MOU, in favour of the Plaintiff. B. SCHEDULE – II The property described in Schedule II of the said MOU was purchased by Shri Kishanchand Khanna (paternal uncle of the Plaintiff and the Defendants) somewhere in the year 1961. During the lifetime of Kischanchand Khanna, the entire shed on the land was given on tenancy basis to late Nandkumar Khanna (husband of Sudershan Khanna, now deceased and father of the Defendants). Shri Kischanchand Khanna died on 4-2-1982 bequeathing under his Will one half share of the land with shed to the Plaintiff and one half share to his wife Raman Kumari. Thereafter Raman Kumari died on 25-7-1994 bequeathing her one half share in the said property to the Plaintiff. The Plaintiff has obtained the probate of the Wills of Kischanchand Khanna and Raman Kumari Khanna and has become the absolute owner of the property described in Schedule II of the said MOU. According to the Plaintiff the Defendant No.1 and his late mother Sudershan Khanna under the said MOU agreed to assign/surrender their joint tenancy rights in favour of the Plaintiff. C. SCHEDULE – III The property described in Schedule III of the MOU belonged to Mr. K. C. Khanna and Mr. Rupchand Khanna equally. The 50% share of Shri K. C. Khanna is inherited by the Plaintiff. The 50% share of Shri Rupchand Khanna devolved on his three sons namely Mr. Ramprakash Khanna (father of the Plaintiff), Mr. Kischanchand Khanna (uncle of 4 5 nms-1251-s-890-06.doc the Plaintiff and the Defendants) and Mr. Nandkumar Khanna (father of the Defendants) i.e. 16.67% each. The Plaintiff further inherited the 16.67% share of Shri Ramprakash Khanna as well as 16.67 % of the share of Shri K. C. Khanna as his adopted son. The Plaintiff therefore is 83.33% owner of the property mentioned in Schedule III of the MOU. The 16.67% share of the late Nandkumar Khanna (father of the Defendants),after his demise devolved on his wife Smt. Sudershan Khanna and the Defendant Nos. 1 and 2 abovenamed i.e. 1/3rd share each of the 16.67% share. According to the Plaintiff, Defendant No. 1and his mother Sudershan Khanna in the said MOU agreed to release/transfer/assign their 1/3rd share each out of their total 16.67% share in favour of the Plaintiff. D. SCHEDULE – IV The property described in Schedule IV of the MOU is a tenanted premise and according to the Plaintiff the Defendant No.1 and his late mother Sudershan Khanna assigned/surrendered their share of the joint tenancy rights in favour of the Plaintiff under the said MOU. 3. By the said MOU executed by and between the late mother of the Defendants and the Defendant No.1 as the Party of the First Part and the Plaintiff as the Party of the Second Part, the mother of the Defendants and the Defendant No.1 agreed to release/transfer/assign their respective right, title and interest inherited through Late Mr. Nandkumar Roopchand Khanna in the properties mentioned in Schedules – I to IV of the said MOU for a total 5 6 nms-1251-s-890-06.doc consideration of Rs.25 lakhs in favour of the Plaintiff. The relevant clauses of the MOU dated 23rd June 2004 are reproduced hereunder :- “1. The Party hereto of the FIRST PART will release/transfer/assign their right, title and interest inherited through Late MR. NANDKUMAR ROOPCHAND KHANNA in the properties written hereinabove and more specifically mentioned in Schedule I to Schedule IV written hereunder, in favour of the Party hereto of the SECOND PART for a total consideration of Rs.25,00,000/- (Rupees Twenty Five Lacs only). 3. It is further agreed upon by and between the parties hereto that out of the total consideration of Rs.25,00,000/- (Rupees Twenty five lacs only) Rs.3,00,000/- (Rupees Three Lac only) will be paid by the party hereto of the SECOND PART to the party hereto of the FIRST PART at the time of execution of this Memorandum of Understanding and the balance consideration of Rs. 22,00,000/- (Rs. Twenty Two Lacs only) will be paid at the time of execution of release/transfer/assignment Deeds as will be in respect of each of the property mentioned in Schedule I to IV written hereunder. The said earnest money of Rs.3,00,000/- will be paid by cheque to Mrs. Ekta Vipul Khanna at the request of the party hereto of the FIRST PART and the party of the FIRST PART will acknowledge the same. 5. It is specifically agreed by and between the parties hereto that all the necessary documents of release/transfer/assignment, powers of attorney, Indemnity Bonds etc for effectively releasing/transferring/assigning right, title and interest in respect of the properties described in Schedule I to IV in favour of the party hereto of the SECOND PART will be executed within a period of 360 days from the date of execution of this Memorandum of Understanding, time being the essence of this contract. 6. If the party hereto of the FIRST PART fails to execute documents as stated in Clause No.5 above within the time 6 7 nms-1251-s-890-06.doc stated therein, the party hereto of the FIRST PART will immediately return the earnest money of Rs.3,00,000/- paid on the execution of this Agreement to the party hereto of the SECOND PART with interest @ 12 p.a. 7. Subject to the other normal provisions hereof the parties hereto shall have the right to enforce each other for specific performance of this Memorandum of Understanding herein recorded.” As can be seen from the above, out of the said consideration of Rs.25 Lakhs an amount of Rs.3 lakhs was paid by cheque upon execution of the said MOU. However, as recorded in the said MOU the cheque of Rs.3 lakhs was at the request of Defendant No.1 and his deceased mother issued in the name of Ms. Ekta Vipul Khanna, wife of Defendant No.1. The receipt annexed to the Memorandum of Understanding is reproduced hereunder : “RECEIPT We (1) MRS. SUDERSHAN NANDKUMAR KHANNA and MR. VIPUL NANDKUMAR KHANNA , the party hereto of the FIRST PART do hereby acknowledge the receipt of the sum of Rs.3,00,000/-(Rupees Three Lacs only) being the earnest money hereinabove mentioned by cheque No.260656 dated 23rd June 2004 drawn on Punjab National Bank Worli Branch issued in favour of Mrs. Ekta Vipul Khanna at our request from Mr. SATYAPAL RAMPRAKASH KHANNA the withinnamed party of the SECOND PART. We say, received Date 23rd June 2004 Sd/- Defendant No.1 Sd/- 7 8 nms-1251-s-890-06.doc Sudershan Khanna Sd/- Received Cheque Ekta Khanna Dated 23rd June 2004.” 4. According to the Plaintiff, he requested the Defendant No. 1 and his late mother to execute the documents as agreed in Paragraph 5 of the said MOU. They assured the Plaintiff that the documents would be executed shortly and accordingly the Defendant No.1 under cover of his letter dated 15th August 2004 addressed to the Plaintiff forwarded to the Plaintiff a copy of the Partnership Deed of M/s. Khanna Textile and the Profit and Loss Account of the said firm for the last three years and recorded that he will send all necessary documents in a short time. In the meantime in pursuance of the MOU executed on 23rd June 2004, Defendant No.1 also requested the Plaintiff to prepare necessary documents. The said letter dated 15th August 2004, written by the Defendant No.1 also bears the signature of his deceased mother Sudershan Khanna. A copy of the said letter dated 15th August 2004 is annexed as Exhibit –C to the Plaint. 5. According to the Plaintiff, in the meantime, the mother of the Defendant Nos. 1 and 2 Smt. Sudershan Khanna fell sick and was confined to bed. According to the Plaintiff, during the life time of the mother of the Defendants, the Plaintiff had personally approached the Defendant No.1 and had handed over/forwarded the draft of documents which were required to be executed by them. The Defendant No.1 informed the Plaintiff that his mother is likely to recover from her 8 9 nms-1251-s-890-06.doc health problems and the said documents would be executed after her recovery. However, unfortunately the Defendants mother expired on 29th December 2004 leaving behind the Defendants as her heirs and legal representatives. According to the Plaintiff, the Defendants were duly bound to execute the documents in favour of the Plaintiff in conformity with the MOU as the said MOU is also binding upon the Defendant No.2 in his capacity as one of the legal representative of his mother late Sudershan Khanna. The Plaintiff by his Advocate’s letter dated 15th April 2005 called upon the Defendant No.1 as a party to the said MOU and Defendant Nos. 1 and 2 as legal representatives of Ms. Sudershan Khanna to execute the documents required for the transfer of their rights in accordance with the MOU to enable the Plaintiff to make payment of the balance consideration to the Defendants. According to the Plaintiff, he did not receive any response from the Defendant No.1. The Plaintiff’s Advocate therefore sent another letter dated 1st July 2005 to the Defendant No.1 inter alia calling upon the Defendant No.1 to execute the necessary documents in favour of the Plaintiff in respect of the suit properties. However, the Defendant No. 1 did not respond to the same. According to the Plaintiff the Advocate for the Defendant No.2 by his letter dated 26th April 2005 in response to the Plaintiff’s Advocate’s letter dated 15th April 2005 inter alia called upon the Plaintiff’s Advocate to give inspection of the documents i.e. the said MOU. The inspection of the MOU was given to the Advocate for the Defendant No.2. According to the Plaintiff, even after taking inspection of the said MOU, the Defendant Nos. 1 and 2 failed and neglected to perform their part of the obligations under the said MOU. The Plaintiff, therefore, filed the above suit 9 10 nms-1251-s-890-06.doc seeking the aforestated reliefs. 6. After the above suit was filed, the Defendants filed a joint affidavit-in-reply dated 30th May 2006 to the Notice of Motion. In the said Affidavit it is admitted by the Defendants that on 8th July 2005 i.e. prior to the filing of the present suit, the Plaintiff had given inspection of the MOU dated 23rd June 2004. However, a grievance is made that a photostat copy of the MOU was not provided to the Defendants. It was further contended by the Defendants, that the Defendant No.1 (wrongly stated as Defendant No.2) had taken to alcohol and ultimately was required to be kept in a rehabilitation centre. The Defendant No.1 is handicapped and the mother of the Defendants late Sudershan Khanna was a widow, old, sick, too literate and only knew how to sign in English. Her husband had committed suicide leaving no liquid cash for their survival. Though the Defendants had admittedly taken inspection of the original MOU, in the said affidavit, they have pointed out certain defects in the MOU based on a typed copy annexed to the Plaint namely that it is not on non-judicial stamp paper; there is no witness; there is no date and month of the execution; there are no initials on every page; there is only one signature mentioned i.e. of Ms. Sudershan Khanna and there is no signature shown of Mr. Vipul Khanna, the Defendant No.1. It is further alleged in the said Affidavit that in Clause No.5 of the original MOU there was some erasure and figure ‘3’ was added before the figure ‘60 days’ which does not appear in the typed copy. It is further alleged that there is no signature or initial next to the said addition. It is further alleged in the said Affidavit, that on 7th May 2006 the Defendant No.2 had visited the 10 11 nms-1251-s-890-06.doc Notary to find out if the Defendant No.1 and Ms. Sudershan Khanna had executed any document before him and that the notary after checking his register informed him in the negative and that this fact has been placed on record by letter dated 18th May 2006 addressed by the Defendant No.2 to the said Notary. In the said Affidavit the Defendant No.1 has not denied the execution of the MOU dated 23rd June 2004 nor have the Defendants alleged that the signature in the MOU is not of their deceased mother. Without admitting the contents and the execution of the MOU, the Defendants submitted that under Clause (6) of the MOU it is provided that if the party of the First Part i.e. the Defendant No.1 and his deceased mother fail to execute the documents as stated in Clause (5) of the MOU within the time stated therein, the party of the First Part will immediately return the earnest money of Rs. 3 lakh paid on the execution of the Agreement to the party of the Second Part i.e. the Plaintiff with interest @ 12% p.a. The Defendants therefore submitted that from the said clause it is clear that the said contract in its nature is determinable and hence cannot be specifically enforced under Section 14 of the Specific Relief Act, 1963 and in view thereof no interim relief can be granted. By the said Affidavit it was further contended that the Plaintiff in prayer clause (c) of the Suit has alternatively sought an order and decree against the Defendants to pay to the Plaintiff a sum of Rs.3 lakhs together with interest @ 12% p.a. It is pertinent to note that in the said Affidavit the Defendants have not dealt with the contention in the Plaint that a sum of Rs.3 lakhs was paid by cheque towards earnest money at the time of execution of the said MOU, which cheque was at the request of Defendant No.1 and his deceased mother, issued in the name of Ms. Ekta Khanna (wife of 11 12 nms-1251-s-890-06.doc Defendant No.1) and that Ms. Ekta Khanna has also issued a receipt acknowledging the said payment. The Defendants have also not disputed the letter dated 15th August 2004 addressed by the Defendant No.1 to the Plaintiff (Exhibit –C to the Plaint), which letter is also signed by the late mother of the Defendants. The Defendant No.1 has also not denied/disputed receipt of letters from the Advocate for the Plaintiff dated 15th April 2005 and 1st July 2005 (Exhibits – E and F to the Plaint). 7. On 2nd May 2006 ad-interim relief in terms of prayer clause (a) of the Notice of Motion was granted against Defendant No. 1. On 3rd May 2006 the said order was modified and the following order was passed :- “The defendants are restrained by an order of injunction from selling, encumbering, alienating, disposing of or transferring the share of the plaintiff in the suit properties mentioned at Schedules-I and III (wrongly mentioned as II) of the plaint which parties agree is 50%.” Thereafter the Plaintiff took out Chamber Summons No.810 of 2006 seeking amendments to the Plaint as well as Notice of Motion No. 1251 of 2006 as set out in the Schedule to the Chamber Summons. The Chamber Summons was allowed by an order dated 4th December 2008 and the amendments were carried out to the Plaint on15th December 2008. 12 13 nms-1251-s-890-06.doc 8. Thereafter the Defendants have filed their Written Statement dated 29th January 2009 in the above Suit. In the said Written Statement the Defendant No.1 has stated that his signature appears on the MOU. However, he does not admit to have executed the same and that he does not remember having signed any such document. It is further alleged that during the relevant period the Defendant No.1 was heavily addicted to alcohol due to which in February 2005 he was required to be admitted to the rehabilitation centre for 111 days. After having admitted that his signature appears on the MOU, in the same paragraph Defendant No.1 has submitted that : “assuming without admitting that the same is the signature of the Defendant No.1 it is apparent that the said signature must have been obtained by the Plaintiff from the Defendant No.1 while he was under the influence of alcohol.” The Defendants have further submitted that they do not admit that the alleged MOU is signed by their late mother Ms. Sudershan Khanna. The Defendants further contended that the cheque of Rs.3 lakhs was given in the name of Ms. Ekta Khanna and she was told at that time that the same is related to the share of the Defendant No.1 from the income of the property of M/s. Ramprakash Nandkumar and the same was never in consideration of the Defendants or their mother agreeing to transfer their share in the properties in favour of the Plaintiff. It is further contended that when the signature of the wife of the Defendant No.1 was taken on the receipt, what was shown was only the receipt which was not annexed to the MOU and therefore the wife of the Defendant No.1 had signed the same, as the receipt does not state anything about transfer of properties. It is also contended that it is impossible to believe that any prudent family 13 14 nms-1251-s-890-06.doc member would agree to sell their share in the suit property for a paltry sum of Rs.25 lakhs as the said property is worth crores of rupees. The Defendants also alleged that there are several unauthenticated additions and alterations in the MOU and in the typed copy of the MOU annexed to the Plaint, the date and month of the execution is blank and in clause (5) of the MOU there is an erasure and figure ‘3’ is added before figure ’60 days’ to make it 360 days. It is further contended that the Defendant No.1 always spells his name as Vipal and not Vipul as mentioned in the MOU and in the Plaint and if the Defendant No.1 had actually executed the MOU, he would have definitely rectified the mistake in his name. In the Written Statement the Defendant No.1 has also denied the execution of the letter dated 15th August 2004 which is annexed as Exhibit –C to the Plaint. It is also alleged that the Plaintiff has not disclosed any accounts of M/s. Ramprakash Nandkumar from the year 1994 till date. The Defendant No.1 has also denied having received the letter from the Advocate for the Plaintiff dated 15th April 2005 on the ground that the Defendant No.1 was allegedly in a rehabilitation centre from 5th February 2005 for 111 days i.e. till the end of May 2005. The Defendant No.1 has also denied receipt of the letter from the Advocate for the Plaintiff dated 1st July 2005 on the ground that after coming out from the rehabilitation centre in June 2005 he had left for Amritsar for more than a month. The Defendant No.1 also denied that the Plaintiff has approached him or his mother with drafts of any documents for transferring/releasing their shares in the ancestral properties, and therefore the Defendant No.1 could not have assured the Plaintiff that after recovery of health of his mother they would execute the documents. 14 15 nms-1251-s-890-06.doc 9. The Defendant No.1 thereafter has also filed an Affidavit- in Reply dated 23rd September 2009 in the above Notice of Motion. In this Affidavit he has not referred to and/or relied upon his earlier Affidavit-in-Reply to the Notice of Motion dated 30th March 2006 which was filed by him jointly with Defendant No.2. He has also not referred to and/or relied upon his Written Statement. In the said Affidavit he has alleged that the MOU has never been signed by him