-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 2931 OF 2006 with CIVIL APPLICATION NOS. 1512 AND 1513 OF 2007 with CROSS OBJECTION (STAMP) NOS. 31034, 31039, 31049 AND 31051 OF 2006 1. Manubhai Vadilal Shah ) 2. Atul Ajitkumar Shah ) Both are adults, occ. Business, having their office ) at D/001, Sheetal Park, Sheetal Nagar, ) Mira Road (E), Tal. & Dist. Thane )..Appellants versus 1. Pandurang Mahadev Thakur ) since deceased through L.Rs respondent Nos. 2 to 7 ) 2. Prakash Pandurang Thakur ) 3. Raju Pandurang Thakur ) All are adults, Occ. Business residing at Jamuna Niwas, ) Opp. Police Station, Phatak Road, Bhayandar (W), ) Tal. & Dist.Thane ) 4. Mrs. Suman Narayan Mhatre ) residing at Bnkode, Gauri Niwas, Vashi, New Mumbai. ) 5. Mrs. Surekha Santosh Mokal, ) R/at Santosh Niwas, Chikkuwadi, ) Shimpoli Village, Borivli (W), Mumbai-400 092 ) 6. Mrs. Madhuri Suryakant Mhatre, ) R/at Salasar Tower, Near Nagar Bhavan, Kashimira Road, ) Bhayandar (W),Thane-401 101 ) -2- 7. Mrs. Bharati Pandurang Mhatre, ) r/at Jamuna Niwas, Vrindavan Complex, ) Bhayandar (West),Thane-401 101 ) 8. M/s. Priyal Enterprises, ) through its Proprietor Jayesh Khangi Maoroo ) having office at Khandelwal Wadi, Shimpoli Road, ) Borivli (West), Mumbai-400 092 ) 9. Nayan Shah, adult, Occ. Business, ) R/at Santacruz Mansion, Naharu Road, Santacruz (E) ) Mumbai-55. ) 10. M/s. Somnath Builders, ) represented by Ashok Himtlal Joshi, ) having office at Rashmi Park, Shop O.1, Shanti Park, ) Mira Road (E), Dist.Thane. ) 11. Kedarnath Developers, represented by ) Ramchandra Vaishnav, having office at ) Bhayandar (W), Tal. And Dist. Thane. ) 12. The Mira Bhayandar Municipal Corporation, through ) its Commissioner, having office at Chh. Shivaji Marg, ) Bhayandar (W),Tal. & Dist. Thane. ).Respondents Mr. A.Y. Sakhare, Senior Advocate, instructed by Mr. Sandesh D. Patil and Mr. Shivraj Patil, for the appellants. Mr. Y.S. Jahagirdar, Senior Advocate, instructed by Mr. Tejas Deshmukh for respondent Nos. 1 to 7. Mr. A.A. Kumbhakoni, instructed by Smt. Sanika Deshpande, for respondent No. 8. Mr. A.A. Kumbhakoni, instructed by Mr. P.S. Dani, for respondent No.9. Mr. A.A. Kumbhakoni, instructed by Mr. Sandesh Deshpande, for respondent No. 10. None for respondent No.11. Mr. Mandar Limaye with Mr. Mahendra Agvekar for respondent No. 12. -3- CORAM: P.B. MAJMUDAR & R.V. MORE, JJ. Judgment reserved on : 12 th October, 2009 Judgment pronounced on: 19 th November,2009 JUDGMENT: (Per P.B. Majmudar, J.) 1. This appeal is directed against the judgment and order dated 7th October, 2006, passed by the learned Joint Civil Judge, Senior Division, Thane, in Special Civil Suit No. 556 of 2004 by which the learned Judge has dismissed the suit filed by the present appellants who were the original plaintiffs in the said suit. The appellants herein instituted the aforesaid suit for getting a decree for specific performance of the suit agreement. For the sake of brevity, the appellants and the respondents shall be described as plaintiffs and defendants respectively. 2. It is the case of the original plaintiffs that the plaintiffs are having business of purchasing and selling the lands as well as developing the lands. The defendant No.1 is the father of defendant Nos. 2 to 7. Defendant No.8 has allegedly acquired the rights of development in respect of the suit property and defendant No. 12 is Mira-Bhayandar Corporation. Defendant Nos. 9, 10 and 11 are claiming rights over the suit property as defendant No.1 has executed some -4- documents in their favour. 3. The defendant No.1 was the owner of the suit property which is situate at Survey No. 476 (old) and Survey No. 120 (new), Hissa No.2 admeasuring 9150 sq.mtrs. equivalent to 10,943 sq.yds. Defendant No.1 had acquired the said property under Section 43 of the Bombay Tenancy and Agricultural Lands Act. It is the case of the plaintiffs that the plaintiffs and defendant No. 1 were having cordial relations and since defendant No.1 was in financial need, he agreed to sell the suit property along with the rights of development to the plaintiffs by executing an agreement on or about 8th August, 1997. Defendant Nos. 2 and 3 are the sons of defendant No.1. It is the case of the plaintiffs that Defendant Nos. 4 to 7 have no right, interest or claim in the suit property. As per the terms and conditions of the agreement, the amount of consideration was fixed at Rs. 500/- per sq.yard and the amount of consideration was to be calculated on carrying out actual survey of the suit property. It is also the case of the plaintiffs that at the time of executing the agreement, Rs. 3,50,000/- was paid and the balance amount was to be paid in four quarterly instalments. The first instalment was to be paid as and when the vendors deduce the marketable title and erect the boundary wall at their own costs. It is also the case of the plaintiffs that the purchasers were to issue a public notice in the newspaper inviting objections and was to intimate the objections to the vendors and vendors were to remove the same at their own costs and risks. The -5- possession of the property was to be handed over at the time of executing the document itself with license to develop the land. The vendors agreed to obtain permission for sale under Section 43 of the Tenancy Act an to get permission under ULC Act and to remove the name of one Estate Investment Company from the column of other rights. It is the case of the plaintiffs that an amount of Rs. 2 lakhs was paid by plaintiff No.1 by cheque bearing No. 438613 dated 11th August, 1997 from his account maintained at Mercantile Co-operative Bank Limited. A cheque of Rs. 75,000/- was drawn in the name of defendant No.1 and the plaintiffs were to pay Rs. 75,000/- to defendant Nos. 2 and 3 by cheque drawn of Bank of India, Malad (East), bearing No. 611426 and 611429. The Bank also issued a certificate stating that the said cheques were honoured on 1st June, 2002. It is also the case of the plaintiffs that the defendant Nos. 1 to 3 have executed the power of attorney in favour of the plaintiffs on 20th August, 1997 and also a declaration-cum-indemnity bond whereby the possession of the suit property was handed over to the plaintiffs for which a separate letter of possession was issued by defendant Nos. 1 to 3. It is also the case of the plaintiffs that the plaintiffs had displayed their name board on the suit property and at the instance of defendant Nos. 1 to 3, one Mr. Avinash Mhatre and Associates, Architects and Engineers, issued a certificate on 2nd August, 1997 stating that the suit property falls in the residential zone and total FSI permissible is 1,02,750 sq.ft. It is the case of the plaintiffs that the plaintiffs invested large amount of Rs. 60 lakhs for filling the plot for development. To the public notice -6- issued by the plaintiffs, various objections were received and were communicated to defendant Nos. 1 to 3. One Mr. Parshuram Thakur raised an objection through his Advocate on 3rd September, 1997, one Mr. Gomes also raised his objection on 5th September, 1997. Defendant No.8 has claimed his rights in the suit property as per agreement dated 6th October,1984 and defendant No.9 has claimed that MoU is executed in his favour by defendant No.1 on 18th October, 1999. According to the plaintiffs, all these documents are fabricated and are false and the same have been executed by the defendants with an intention to defeat the claim of the plaintiffs. 4. It is the case of the plaintiffs that the plaintiffs are ready and willing to perform their part of the contract and are willing to complete the transaction. It is also the case of the plaintiffs that one M/s. Kedarnath Construction Company (Defendant No. 11 in the suit) claimed FSI of the suit property and filed a Writ Petition in the High Court. The plaintiffs have intervened in the said petition and thereafter the plaintiffs issued the notice on 25th September, 1999 to the Chief Officer of Defendant No. 12 Corporation asking them not to grant any permission or approve the plans in favour of defendant No.11. It is also the case of the plaintiffs that in December, 2000, the Income tax Department effected a raid at the residential premises of Defendant Nos. 1 to 3 wherein some documents were found in respect of the suit property for which notice was also issued on 29th January, 2001, calling upon them to produce the concerned documents including -7- the transaction of the suit property. The plaintiffs had also lodged complaints with the police authorities and filed criminal case before the Judicial Magistrate, First Class, Thane as defendant Nos. 1 to 3 tried to deal with the suit property with other persons and to create third party interest in it. It is also the case of the plaintiffs that on 14th May, 2002, defendant Nos. 2 to 7, along with other unknown persons, tried to remove the Board which was prevented by the security personnel appointed by the plaintiffs. 5. The plaintiffs thereafter filed a Regular Civil Suit No. 349 of 2002 before the Civil Judge, Junior Division,Thane, on 16th May, 2002, for injunction simplicitor. The defendant Nos. 1 to 3 appeared in the said suit and contended that defendant Nos. 4 to 7 are having rights in the suit property and they had also challenged the validity of the agreement dated 8th August 1997. The defendants thereafter issued a notice to the plaintiffs on 13th July, 2002 stating that the agreement is without any consideration and the same is null and void which notice was replied to by the plaintiffs on 20th August, 2002 denying all the allegations levelled against them. The plaintiffs ultimately filed the aforesaid suit for specific performance on the ground that the defendants have no right to cancel the agreement dated 8th August, 1997 and that the plaintiffs are entitled to specific performance of the said agreement. It is also the case of the plaintiffs that even though the plaintiffs have paid an amount of Rs. 3.5 lakhs which was received by the defendants, yet the defendants are falsely denying the -8- receipt of the same and other defendants are also falsely claiming rights in the suit property. By mutation entry No. 5943 , the name of defendant No.8 has appeared in 7/12 extract by which the plaintiffs came to know that defendant Nos. 1 to 7 had sold the suit property to defendant No.8 for Rs. 50 lakhs which fact came to the knowledge of the plaintiffs during the pendency of Regular Civil Suit No. 349 of 2002. It is the case of the plaintiffs that the plaintiffs sent a notice to defendant No. 13 through their Advocates on 27th August, 2004, but the defendants neither took any steps to comply with the same nor gave any reply. It is the case of the plaintiffs that they could not develop the plot as the defendant Nos. 1 to 3 did not cooperate. According to the plaintiffs, they had acquired the rights in the suit property and ultimately the plaintiffs could have earned the profit which is estimated by the plaintiff at Rs. 7 crores. The plaintiffs ultimately claimed that in case the decree or specific performance is refused, defendant Nos. 1 to 3 may be jointly directed to pay Rs. 7 crores. Accordingly, the Regular Civil Suit No. 349 of 2002 filed by the plaintiffs which was a suit for simplicitor injunction was withdrawn and thereafter the present suit for specific performance has been filed. 6. The aforesaid suit was resisted by defendant Nos. 1 to 7 by filing the written statement at Exh. 80. Defendant No. 9 denied the claim of the plaintiffs by filing written statement at Exhibit-84. Defendant No. 8 adopted the say of defendant No. 9. Defendant No. 10 filed his written statement at Exh. 88 and -9- defendant No. 12 filed its written statement at Exhibit-60. Defendant No. 11 submitted a purshis at Exhibit-56 stating that he is not interested in the suit proceedings. 7. It is the say of defendant Nos. 1 to 7 that the suit is false, frivolous and vexatious. The suit is bad for non-joinder and misjoinder of the parties. The Government is a necessary party as the land in question is declared as surplus vacant land by the Additional Collector and Competent Authority under the Urban Land Ceiling Act, 1976. It is the case of the said defendants that the plaintiffs have filed Regular Civil Suit No. 349 of 2002 for injunction in which defendant No. 13 submitted an application under Order II Rule 2 (3) of Civil Procedure Code. It is also the say of the said defendant Nos. 1 to 3 that they have cancelled the alleged agreement by a notice dated 13th July, 2002 through their advocates and the said agreement was void, ab initio for want of consideration. It is also the case of the said defendants that the said agreement was in violation of Urban Land Ceiling Act and Sections 43 and 63 of the Bombay Tenancy and Agricultural Lands Act. It is the case of the said defendants that the suit is barred by limitation and that the defendants are in exclusive possession of the suit premises. It is also the case of defendant Nos. 1 to 3 that they have not received any consideration at all nor any cheques were issued to them by the plaintiffs at the time of executing the agreement. No such cheques as alleged by the plaintiffs were received in the accounts of defendant Nos. 1 to 3. -10- It is also the case of the said defendants that the plaintiffs have not taken any steps since 1987 for specific performance of the alleged agreement. It is also their case that defendant Nos. 4 to 7 have an undivided right in the suit property and consent of defendant Nos. 4 to 7 was not taken at the time of executing the so- called agreement. It is also the case of the defendants that the present suit is not maintainable as no leave was taken from the Court in Regular Civil Suit No. 349 of 2002. It is also the case of the defendants that defendant No.1 is a pensioner and residing with defendant Nos. 2, 3 and 7 and there was no legal necessity to sell the suit property for a meagre amount of Rs. 500/- per sq.yd. It is their case that the documents are prepared by the plaintiffs on their own and defendant Nos. 1 to 3 are not conversant with the English language. The alleged documents were never read over or explained to defendant Nos. 1 to 3. The Defendant Nos. 1 to 3 have signed it on the good faith and under the impression that the plaintiffs shall make the payment of consideration but no such amount was paid as per the agreement. It is the case of the defendant Nos. 1 to 3 that the documents executed by them in favour of defendant no.8 is legal and valid. On these and such other grounds, he suit of the plaintiff was resisted by the defendants. It is further the case of the defendants that the suit property is in use and occupation of defendant Nos. 8 to 9 and defendant No. 10 also constructed a building on the portion of the suit property as an assignee of defendant No.8 and even the mutation entry No. 5945 is also recorded in the revenue records. -11- 8. Defendant No. 9 filed his separate written statement at Exh. 84 denying the claim of the plaintiffs. It is the case of the said defendant that the suit of the plaintiff is hit by the provisions of Section 4 of the Indian Partnership Act as the said partnership is not a registered one. Defendant No. 10 filed his written statement at Exh. 88 denying the suit on various grounds. Defendant No. 12, Mira-Bhayander Corporation, also filed its written statement at Exh. 60 stating that the Corporation is not at all a necessary and proper party to the present proceedings. 9. From the rival pleadings, the learned trial Judge framed various issues at Exh. 85. After considering the evidence on record, the learned trial Judge found that the plaintiffs have failed to prove the said agreement. The plaintiffs have filed to prove that they are in possession of the suit property. It is found that plaintiffs were not ready and willing to perform their part of the contract. The trial Court also negatived the claim of damages put forward by the plaintiffs. The learned trial Judge however held that the suit of the plaintiffs is not hit by Order 2 Rule 2 (3)of the Civil Procedure Code. The trial Court accordingly dismissed the said suit against which the original plaintiffs have filed the present First Appeal. So far as the finding regarding Order 2 Rule 2 (3)is concerned, the defendants have also filed cross objections. 10. Mr. Sakhare, learned counsel appearing for the appellants submitted -12- that the trial Court had not properly appreciated the oral and documentary evidence on record and had gravely erred that the plaintiffs had failed to prove the suit agreement. Mr. Sakhare submitted that part payment was made by the plaintiffs by way of cross cheques and, therefore, the trial Court should have held that the plaintiffs have paid the part consideration to defendant Nos. 1 to 3. It is submitted by Mr. Sakhare that the sale consideration was to be fixed after the measurement of the area and since the defendants had not taken any steps for such measurement and since defendant Nos. 1 to 3 had not co-operated in connection with taking appropriate steps for various permissions, the plaintiffs could not commence their work for developing the suit property. Mr. Sakhare submitted that even at the time of executing the agreement, the concerned defendants had executed a power of attorney and also executed declaration and indemnity bond. Possession was also given to the plaintiffs for which he has relied upon the possession receipts. Mr. Sakhare also relied upon oral and documentary evidence on record to substantiate his say that the plaintiffs were always ready and willing to perform their part of the contract and the defendants tried to back out from the same. It is submitted by Mr. Sakhare that the trial Court has rightly found that the present suit is not hit by the provisions of Order II Rule 2 (3) of Civil Procedure Code as the earlier suit was a simplicitor suit for injunction and that the present suit is filed for specific performance. It is submitted by Mr. Sakhare that in case this Court is of the opinion that the specific performance cannot be granted then alternatively the remedy as prayed -13- for by the plaintiffs should be given. 11. Mr. Jahagirdar, learned counsel appearing for defendant Nos. 1 to 7, on the other hand, submitted that the suit of the plaintiffs is hopelessly barred by time. Mr. Jahagirdar submitted that there is no concluded contract between the parties and that the matter was only at the negotiation stage. Mr. Jahagirdar submitted that defendant Nos. 1 to 3 have never received any amount from the plaintiffs and no cheques were received by them in their account. Mr. Jahagirdar submitted that there is no consideration in connection with the suit agreement as no sale price was fixed. He submitted that since there is no concluded contract, the suit for specific performance is not maintainable. Mr. Jahagirdar further submitted that even otherwise from the conduct of the plaintiffs it is clear that the plaintiffs were even otherwise never ready and willing to perform their part of the contract nor they have taken any follow up action for all these years. Mr. Jahagirdar submitted that even otherwise the suit is barred under Order II Rule 2 (3)of Civil Procedure Code as the present suit is filed without obtaining prior leave from the trial Court before whom Regular Civil Suit was pending. Mr. Jahagirdar submitted that the so-called possession receipt is without any date and the plaintiffs themselves prepared the same at the time of drafting the agreement but the same has not been acted upon. It is, therefore, submitted that the power of attorney and the receipt are undated one. In this behalf Mr. Jahagirdar also relied upon the averments made in the plaint by the plaintiffs. -14- 12. Mr. Kumbhakoni, learned counsel appearing for defendant Nos. 8, 9 and 10, submitted that the plaintiffs have failed to prove that they were put into possession of the suit property. It is submitted that handing over of the possession is not even mentioned in the agreement. Mr. Jahagirdar and Mr. Kumbhakoni also relied upon documentary evidence on record and submitted that the trial Court has rightly dismissed the suit for specific performance. The trial Court has also found that no consideration has passed in favour of defendant Nos. 1 to 3. Mr. Jahagirdar also submitted that the cross objections filed by defendants are required to be allowed by holding that the present suit is not maintainable as the same was filed without taking prior leave from the previously instituted suit and, therefore, it is hit by Order II Rule 2 (3)of the Civil Procedure Code. 13. We have heard the learned counsel appearing for the parties at length. We have also gone through the voluminous documentary and oral evidence on record. We have also gone through the written submissions submitted on behalf of the appellants as well as the submissions placed on record by Mr. Kumbhakoni. 14. The principal question which is required to be determined in this appeal is as to whether from the evidence on record, the plaintiffs can be said to -15- have proved the suit agreement and whether the plaintiffs are entitled to any decree for specific performance or alternatively decree for damages as claimed by the plaintiffs. Another question which is required to be considered is as to whether the cross objections submitted by the defendants are required to be allowed. 15. On behalf of the appellants-original plaintiffs, affidavit in lieu of examination-in-chief of one Manubhai Vadilal Shah, plaintiff No.1 is tendered. The said witness has stated that he, along with plaintiff No.2, has filed the aforesaid suit against the defendants for specific performance, declaration, injunction and in the alternative compensation. The said witness has stated that he is doing business of purchasing and selling the lands as well as developing the lands as developers. In his affidavit he has stated that defendant No. 1 was the owner of the land situate at revenue village Bhayandar within the limits of Mira- Bhayandar municipal Corporation bearing survey No. 476 (old) i.e. Survey No. 120 (new). The said witness has given measurement of the disputed land. He has stated that the suit property was standing in the name of defendant No.1 and defendant Nos. 4 to 7 have no right or interest in the suit property or any part thereof. Since defendant Nos. 4 to 7 are daughters of defendant No.1, they are joined as party defendants in the suit. He has stated that defendant Nos. 2 and 3 are parties to the agreement along with defendant No.1 and that defendant No. 8 has allegedly acquired the rights of development in respect of the suit property without any authority. He has further stated in the affidavit that the suit -16- property is acquired by defendant No.1 under Section 43 of the Bombay Tenancy and Agricultural Lands Act and that as he wanted the suit property to be developed and since he was in financial need and as relationship between the plaintiffs and defendant No.1