: 1 : nms-3759-07=.sxw USJ IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO. 3759 OF 2007 IN SUIT NO. 2782 OF 2007 M/s. Krishna Developers (Pvt.) Ltd. .. Plaintiffs v/s. Shailesh Vijaykumar Ruparelia & Anr. .. Defendants ......... Mr. P. Sancheti i/by Deepak Chitnis and Chiparikar & Co. for the plaintiffs Mr. Satish Shetye, Ms. Meenaz Merchant i/by H.G. Ganatra for defendant no.1. Mr. K.R. Parekh, Ms. Kunjal Sanghani i/by K.R. Parekh & Co. for defendant no.2 ......... CORAM : R.Y.GANOO, J. DATE : 24th AUGUST, 2010. P.C. : 1. The plaintiffs have entered into a development agreement with the defendants being Agreement dated 10th February, 2005. It is noticed that a sum of Rs.22 lakhs have been paid to the defendants towards consideration up to October, 2005. According to the plaintiffs, balance consideration is deposited : 2 : nms-3759-07=.sxw with M/s. Kanga and Co. Advocates and Solicitors. In the course of hearing of the motion, a doubt was expressed by learned Counsel for the defendants as to whether the said amount is presently lying with M/s. Kanga & Co. I do not wish to go into this controversy and I take it that the said amount is lying with M/s. Kanga & Co. According to the terms of the agreement, defendants were required to construct a wall on the property abutting to Mithi river and after that job was done, the defendants were to put plaintiffs in possession of the property and get the balance consideration from M/s. Kanga & Co. It is seen that meeting took place between plaintiffs and defendants to resolve the disputes as regards construction of wall on 20th October, 2005. In the said meeting, minutes were drawn and signed by respective parties. Clause 7 of the said minutes indicates that defendants were to construct wall from three sides and so far as the wall abutting Mithi river is concerned, the job was to be done by the plaintiffs with the assistance of the defendants and if this is not done, plaintiffs were to take up the job keeping away the defendants and then deduct a sum of Rs. 1 lakh from the amount lying with M/s. Kanga & Co. This clause has not been fulfilled by and between the parties. : 3 : nms-3759-07=.sxw Correspondence ensued between the parties in terms of letters which are at pages 120 onwards of the plaint. It is required to be mentioned that defendants at one stage, claimed that they had constructed the wall from three sides and it got washed off in the floods of July, 2005. The very fact that on 20th October, 2005, it was agreed that the defendants would construct walls on three sides except the Mithi river side, would clearly indicate that on that day, there were no walls in regard to the property in question. 2. Learned Counsel for the defendants contended that on account of non-fulfillment of clauses regarding construction of wall, the contract has frustrated and, therefore, specific performance cannot be granted and consequently no injunction should be granted. It was also submitted that on account of order passed by this Court in Public Interest Litigation, no encroachment is permissible on the suit property adjacent to Mithi river. Learned Counsel for the defendants wanted to contend that putting plaintiffs in possession of the property would amount to encroachment as they would construct structure on the suit land. : 4 : nms-3759-07=.sxw 3. Learned Counsel for the defendants pointed out that letter dated 17th February, 2007 sent by advocate for the defendants to M/s. Kanga & Co. plaintiffs were called upon to pay additional amount of Rs.1200/- per sq.ft. and the said amount was to be paid by 28th February, 2007. In the said letter itself, it is stated that if the said amount is not paid, the defendants shall treat that the contract has come to an end. With these facts, learned Counsel for the defendants contended that the agreement has come to an end and hence, no specific performance can be granted. 4. After having considered the points in question, I am inclined to reject the stand of the defendants that the agreement stands frustrated. The arrangement arrived at dated 20th October, 2005 clearly permitted plaintiffs to enter upon the property for the purposes of construction of the wall on the Mithi river side. Said arrangement did not materialize. Thereafter, defendants seems to have changed their stand and have demanded an additional consideration of Rs.1200/- per sq.ft. In view of the aforesaid demand, it is clear that they are not : 5 : nms-3759-07=.sxw inclined to respect Agreement dated 10th February, 2005. This will mean that the defendants are not inclined to accept the terms of the contract. In my view, defendants in such a case are required to be restrained from creating third party rights and / or parting with possession till disposal of the suit as this Court will have to go into the question as to which party is at fault and whether there has been a novatio between the parties as regards consideration. 5. It is sought to be contended that giving possession by the defendants to plaintiffs of suit land would amount to encroachment and would be in violation of order passed by the High Court in Public Interest Litigation. If this is the argument on behalf of the defendants, certainly, defendants would not be able to create third party rights in favour of any other person as it would mean that defendants are allowing encroachment. Such a contention cannot be accepted. 6. For the aforesaid reasons, I hold that plaintiffs have made a prima-facie case for grant of an injunction restraining defendants from creating third party rights and / or parting with possession : 6 : nms-3759-07=.sxw of the suit property. The balance of convenience is in favour of plaintiffs. The plaintiffs paid Rs. 22 lakhs to defendants and deposited balance consideration with M/s. Kanga & Co. They have complied with important terms of contract. 7. Learned Counsel for the plaintiffs submitted that Receiver be appointed in terms of prayer clauses (b) of the notice of motion and plaintiffs should be permitted to carry out work through the Receiver. It was contended that the property in question is open plot of land and it may be encroached by outsiders. In my view, apprehension raised by the plaintiffs cannot be accepted as the conduct of the defendants clearly indicates that they are interested in protecting the property. This is so because a structure admeasuring 3500 sq. ft. stands on the suit land and defendants maintain that they are in possession of suit property. The record shows that defendants have full control over the suit property. Hence, at this juncture, I am not inclined to appoint a Receiver in terms of prayer clause (b). 8. For the reasons mentioned aforesaid, following order is passed to dispose of notice of motion. : 7 : nms-3759-07=.sxw ORDER (i) Pending the hearing and disposal of the suit defendants, their agents, servants are restrained from creating third party rights and / or parting with possession of suit property described in prayer clause (a) of the notice of motion. (ii) As of today, no orders on prayer clause (b). (iii) In the facts and circumstances of the case, there shall be no order as to costs. After the aforesaid order is passed, learned Counsel for the defendants wanted that plaintiffs should communicate to them the exact amount which has been deposited with M/s. Kanga & Co and mode by which the said amont is deposited. The request The plaintiffs shall inform to the defendants the exact amount deposited with M/s. Kanga & Co. and mode by which the said amount is deposited. (R.Y.GANOO, J.)