1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL, CIVIL JURISDICTION APPEAL NO.1081 OF 2005 IN NOTICE OF MOTION NO.1915 OF 2005 IN SUIT NO.1796 OF 2005 WITH CROSS OBJECTION (LODG.) NO.2 OF 2005 WITH CROSS OBJECTION (LODG.) NO.14 OF 2005 WITH CROSS OBJECTION (LODG.) NO.15 OF 2005 M/s.Chheda Housing Development ) Corporation, a Partnership firm ) registed under the provisions ) ofIndian Partnership Act ) 1932,havig their office a 109- ) 111, Goyal Shopping Arcade S.V. ) Road,Borivali (West), Mumbai- ) 400 092. )..APPELLANT Versus 1.Bibijan Shaikh Farid ) 2.Fazal Shaikh Farid ) 3.Afzal Shaikh Farid ) 4.Auragzeb Shaikh Farid ) 5.Alizer Shaikh Farid ) 6.Aroz Shaikh Farid ) 7.Firoz Shaikh Farid ) 8.Noorie Shaikh Farid ) 2 9.Naseeb Shaikh Farid ) All of Mumbai, Indian ) Inhabitants, having their ) address at 93, Amrut Nagar, ) 502/503, Nirman Apartment, ) M.V.Road, Kurla Andheri ) Road, Andheri (East), ) Mumbai-400 069. ) 10.Mohammed Hussein Merchant ) Mumbai, Indian Inhabitant ) carrying on business at 210/ ) 211, Gundecha Chamber, 2nd ) Floor, Nagindas Master Road ) Fort, Mumbai-400 023. ) 11.Star Habitat Pvt. Ltd., a ) Company registered under the ) Provisions of the Companies ) Act, 1956 having office at ) 210/ 211, Gundecha Chamber,2nd) Floor, Nagindas Master Road ) Fort, Mumbai-400 023. ) 12.Akshay Doshi of Mumbai ) Indian Inhabiant, having his ) address at Bhoomi Hills, Near ) Suncity, Thakur Village, ) Kandivali(East),Mumbai-400 101) 13.Ajay Mehta, of Mumbai, Indian) Inhabitant,having ) address at Bhoomi Hills, Near ) 3 Suncity, Thakur Village, ) Kandivali(East),Mumbai-400 101)..RESPONDENTS Dr. Virendra V. Tulzapurkar, Senior Counsel with Mr. Virag Tulzapurkar, Mr. P.N. Modi, Mr. Pramodkumar and Mr. A.H. Khatri, i/b. Pravin Mehta & Mithi & Co., and M/s.Pramodkumar & Co., for Appellants. Mr. Rohit Kapadia, Senior Counsel with Mr. N.G. Thakkar, Senior Counsel i/b. Vinod Mistry & Co., for Respondent No.10. Mr. Arif Y. Bookwala, Senior Counsel with mr. A.H. Gokhale i/b.Ranjit & Co., for Respondent No.11. Mr. Janak Dwarkadas, Senior Counsel with Mr. T.N. Subramanian,, Senior Counsel i/b. Wadia Ghandi & Co., for the Respondent No.12 and 13. Mr.K.N. Gaikwad, for Respondent No.14. Ms. Trisha Pangarkar i/b. Yusuf & Abraham for Respondent Nos. 1 to 9. CORAM: F.I. F.I. F.I. REBELLO REBELLO REBELLO & MRS.V.K.TAHILRAMANI, MRS.V.K.TAHILRAMANI, MRS.V.K.TAHILRAMANI, JJ. JJ. JJ. DATE: 15th February, 2007 4 JUDGMENT (PER F.I. REBELLO, J.) . This an Appeal by the Plaintiff. Along with the Appeal respondent Nos. 1 to 9 and Respondent Nos.10 and 11 have also filed cross objections. All of them are being heard and finally disposed of by this judgment. 2. The Appeal is preferred by the Appellant who is the original plaintiff. The respondent Nos. 1 to 9 are the original defendant Nos. 1 to 9, Respondent No.10 is the original defendant No.10, respondent No.11 is the original defendant No.11 and respondent Nos. 12 and 13 are the original defendant Nos. 12 and 13. The respondent Nos. 1 to 9 are the legal heirs of one late Shaikh Farid Shaikh Kalander, who had filed a suit in respect of the suit property and other properties against Behramjee Jeejeebhoy Pvt. Ltd.. being Suit No.2105 of 1989, claiming adverse possession against Behramjee Jeejeebhoy Pvt. Ltd. Consent terms came to be filed on 22nd June, 1992 under which a declaration was granted declaring late Shri Shaikh Farid Shaikh Kalandar to be the owner of the property. The consent decree came to be registered on 24th August, 2000. It is the case of the Appellants that on 20th April, 2004 there was a Memorandum of Joint development entered into between 10th respondent and the appellants for joint development of the property which was identified as a 5 specific part of Plot C-2 in terms of the lay out scheme/Sub Division sanctioned under reference No.C/Office-7A/Sub Division/SR/3496 dated 15th October, 2002. A certificate had been issued by the Advocates and Solicitors for respondent No.10 that the title in the said property was in late Shaikh Farid Shaikh Kalandar and respondent No.10. Respondent NO.10 in respect of the cause of action against respondent Nos. 1 to 9 filed a suit being Suit No.2180 of 2004, for various reliefs amongst others for an injunction against respondent Nos. 1 to 9 from causing any obstruction or hindrance or interfering with the right of the respondent No.10 from exercising the power under the Power of Attorney. The plaint was amended by adding respondent No.11 as defendant. The suit came to be decreed on 10th March, 2005. The Appellants contend that another certificate was issued on 23rd March, 2005 by the Advocate for Respondent No.10, certifying that the certificate of title dated 16th March, 2004 issued by the Advocates was still good and the said property was free from all encumbrances and reasonable doubts. . At this stage it may be pointed out from the pleadings that the case of Respondent Nos.10 and 11 is that there was an agreement entered into between the respondent Nos. 10 and 11 on 22nd January, 2004 whereby the respondent NO.11 was entrusted the right 6 to develop the larger property. It may also be added that in respect of the sub division plots identified as sub plot No.A1, B and C1 were to be developed by one M/s.R.N.A. Builders. An agreement came to be entered into on 24th March, 2005 between the respondent Nos. 1 to 9 and 10th respondent on the one hand and the appellants on the other whereby development rights were granted to the Appellants in respect of 2,00,000 sq.ft. of plot C-2. One of the Clauses in the Agreement was that the area admeasuring 2.00 lakh sq.ft. to be built was by utilising the FSI of 1.00 i.e. 1.00 lakh sq.ft. and by respondent Nos. 1 to 10 making available TDR to the extent of balance 1.00 lakh sq.ft. which would be available and/or generated from the larger portion of the property or by acquiring slum TDR from the market if required. Pursuant to this agreement the joint development agreement of 28th April, 2004 was returned back as cancelled. On the same day respondent Nos. 1 to 10 issued letter of confirmation that it authorised respondent No.10 to initiate and execute development agreement of 2.00 lakh sq.ft.on Plot C-2. The Appellants paid to respondent Nos. 1 to 11 a sum of Rs.2,60,00,000/-, the receipt whereof is acknowledged by respondent Nos. 1 to 10. Further part consideration of Rs.40.00 lakhs was to be paid within 15 days from the owners obtaining Plinth Commencement Certificate. The balance amount was to be paid in 5 equal 7 quarterly instalments and the last instalment was to be Rs.1.35 crore. A sum of Rs.5.00 lakhs was to be paid on completion of transaction and on execution of vesting documents including Conveyance in favour of the Society/Societies, Organisations as may be formed and registered by the Developers of premises in the building/s to be constructed by the Developers under the Agreement. The possession was given to the appellant by letter dated 24th March, 2005 and recorded. A supplemental agreement was entered into on 25th March, 2005 whereby the price was increased to Rs.3.35 crores. . Pursuant to a public notice on 14th May, 2005 a claim was filed by the 11th respondent. The Respondent No.11 is a company incorporated under the Indian Companies Act and whose Directors are the members of the family of respondent No.10. Pursuant to this, correspondence was exchanged on one hand between the Appellants and Respondent No.1 to 10. As Respondent Nos.11, 12 and 13 were developing on an area which was to be provided as access to Plot No.C-1, a notice was also given to them. A suit came to be filed in which Notice of Motion was taken out, being Notice of Motion No.1915 of 2005 for ad-interim relief. The impugned order came to be passed on 1st September, 2005. 3. The defence of Respondent Nos.10 is that 8 there were two immovable properties belonging to respondent Nos. 1 to 10, one at Goregaon and the other the suit property at Kandivali. Respondent No.10 approached the appellants for financial assistance for development the property at Goregaon to the tune of Rs.5.00 crores. Accordingly, two allotment letters dated 24th March, 2004 and 20th April, 2004 were issued to secure part payment of Rs.2.50 crores which had to be made by the appellants. It was the understanding that payment was to be made against these two allotment letters. The Appellants, however,desired that there should be a proper security as they are investing a considerable sum and the appellants sought security of 8.00 lakhs sq.ft. of FSI of suit property and that is how the joint development agreement in respect of Kandivali property was executed, as the Appellants apprehended that on account of several tenants and occupants in Goregaon property, the development proposal may not be feasible and in those circumstances the property would not constitute an adequate security. It is in these circumstances a security was given of 8.00 lakhs which was subsequently was reduced, as the appellants failed to bring in further sum of Rs.2.50 crores. The security was reduced to 2.00 lakh sq.ft. In the alternative it was submitted that the Agreement was adjudicated and stamped as a Development Agreement and the law is settled that Development Agreement cannot be 9 specifically enforced. The respondent No.11 have adopted the stand of the respondent No.10. It was pleaded that there is suppression of material facts and that the suit as filed is not maintainable. The Appellants were aware of the Agreement entered into between the respondent Nos. 10 and 11 on 22nd January, 2004 and it is not open to the Appellants to contend that it was only noticed during the search of the proceedings of the City Civil Court. The Agreement between respondent Nos.10 and Respondent No.11 are prior agreements and must take precedence to the Agreement between the appellants and respondent Nos. 1 to 10. Respondent No.11 made payment to respondent No.10 as per Agreement dated 22nd February, 2004 and development work was in progress. The stand of respondent Nos. 12 to 13 is that the appellants have an alternative access in terms of the development plan of the property and as such the relief as prayed for could not be granted. Respondent Nos.1 to 9 adopted the stand of respondent No.10. 4. The learned Single Judge held, relying on the Agreement that the area agreed to be sold was part of Plot C-2. based on the sanctioned lay out. The learned single Judge also held that at the prima facie stage it was not possible to hold whether the Agreement is a Development Agreement. The learned single Judge held that the Agreement would have to be 10 read as a whole and material will have to be considered which could only be done at the trial of the suit. The contention urged that in view of Section 14 of the Specific Relief Act, the Agreement could not be enforced was rejected by the learned Judge by holding that the issue can only be decided at the final hearing of the suit. The various other contentions urged in support of the contention that the Agreement was a development agreement were rejected on the ground that the document would have to be construed by considering the other material on record and the evidence. After so holding and on considering the documentary evidence, the learned single Judge held that he was satisfied that a prima facie case has been made out. The learned Judge thereafter was pleased to make the Motion absolute in the following terms:- "Defendants, their servants, agents are restrained by an order and injunction from in any manner disposing of or alienating and encumbering an area admeasuring 2 lakh sq.ft. on Plot No.C-2 more particularly described in second schedule to the Agreement dated 24th March, 2005 as also utilising benefit of TDR/DRC generated by defendant Nos. 1 to 10 so as to adversely affect Plaintiff’s right to construct and sell the said area in accordance with the agreement Exh.F-4 to the 11 Plaint." After this order was pronounced certain additional submissions were made and the learned Judge thereafter was pleased to further order as under:- "46. In my view, once the injucntion/linterlocutory relief is to protect right of Plaintiffs under this agreement, plaintiff cannot get anything more than what is the entitlement under the agreement. Hence, the defendant Nos. 1 to 11, their servants, agents are restrained by an order and injunction from in any manner disposing of or alienating the area of 2 lakh sq.ft. to be used and utilised by construction of building as shown on plan annexed as Annexure "B" to the agreement, available as free sale on the property being part of property being C-2 shown shaded in the same plan and more particularly described in the Agreement so as not to adversely affect plaintiffs right under the same. The injunction granted in the foregoing paragraphs be read in this light and the clause in the Agreement reproduced above." 5. The Appellants are aggrieved by these observations in para.46 of the order, which according to them has resulted in denying them protections for 12 their right of development of additional 1,00,000 sq.ft. by way of TDR on the suit plot. They are also aggrieved by the non-grant of the injunction in respect of the suit way. 6. There was a delay in preferring the Appeal, which on a Motion taken out being Notice of Motion No.3537 of 2005 the delay was condoned. It is only after this, did the respondent Nos. 1 to 9 and 10 and 11 file their cross objections. 7. On behalf of the Appellants the issues raised and submissions made are as under:- (a) After having held, that the Plaintiffs have made out a prima facie case and having made the notice of Motion absolute in terms as mentioned in para.42 of the judgment, could the learned Judge clarify the order by adding a rider at the end of para.46 of the judgment which reads as under:- "The injunction granted in the foregoing paragraphs be read in this light and the clause in the Agreement reproduced above" which rider has the effect of nullifying the protection to the appellants and thereby permitting the respondents to deal with the TDR to the extent which could be made 13 available by the respondents to the appellants by acquiring or purchasing slum TDR from the open market free from all encumbrances, claims and dues. (b) Whether inspite of the specific provision in the agreement granting to the appellants right of way through the Plot No.2A to Plot A-2 of the respondents property the relief in respect thereof should have been refused. 8. On the other hand on behalf of the respondent No.10 it is contended that the Agreement was an agreement for security and in the alternative is a development agreement and consequently the appellants are not entitled to specific performance of the agreement. . On behalf of respondent No.11 it is submitted that the rights of the respondent No.11 were antecedent/prior to the rights of the appellants as the agreement entered into between the respondent No.11 and respondent No.10 was dated 22nd January, 2004 prior to the agreement between the appellants and respondent Nos. 1 to 10 which was on 20th April, 2004 and further that the agreement dated 22nd January, 2004 had been acted upon and that the agreement between the appellants and respondent Nos. 1 to 10 was an agreement for development and consequently could not be specifically enforced. 14 . On behalf of the respondent Nos. 1 to 9 the argument advanced on behalf of the respondent No.10 has been adopted. 9. On behalf of respondent No.12 and 13 it is contended that the issue relating to right of way was not seriously pressed or argued or placed for consideration before the learned single Judge. At any rate, it is submitted that the appellants are claiming right on plot C-2 which has an access in terms of the approved plan. In these circumstances the Appellants on the ground that there was an existing right of way can claim no right as pursuant to the approved lay out plan it is the plan as approved, which has make provided for access to the various sub divisions. 10. From the above submissions of the parties the principal contentions which have to be decided are:- (1) Whether the appellants have made out a prima facie case that the agreement relied upon was an agreement for sale and not an agreement for security and/or alternatively an agreement for development which could not be specifically performed. If prima facie case is made out, for specific performance then whether the appellants are entitled to an injunction to restrain the respondents from alienating, transferring or using the TDR available from the suit 15 plot and the remaining plot pending the hearing and final disposal of the suit. (2) Whether the appellants have made out a case for grant of injunction in what is described as the existing right of way, after a lay out plan has been approved on 15th October, 2002 and an access has been provided to Plot C-2 to the D.P. Road. 11. We shall first deal with the contention as to whether the appellants have made out a prima facie case. In this context prima facie, a finding will have to be first recorded, that there is an agreement which can be specifically performed. It is only on arriving at this conclusion, can it be said that the appellants have made out a prima facie case warranting grant of interim injunction subject to the other requirements of balance of convenience and irreparable loss and injury. The learned Single Judge on a consideration of the various documents including the agreement has come to the prima facie finding that the agreement is an agreement to sell, which can be specifically enforced. The respondents, therefore, will have to make out a case that the finding by the learned single Judge is perverse. The view taken by the learned trial Court, ordinarily will have to be upheld,if it was a view capable of being taken, irrespective of the Appellate Court arriving at a conclusion that another view is 16 probable which is a better view and as long as the findings based on which the view is taken are not perverse. . Before we answer the issue, let us consider the judgments cited at the bar for the proposition as to which contract can be specifically enforced. Let us first deal with the judgment relied upon by the appellants. In the case of Vallammal Rangarao Vallammal Rangarao Vallammal Rangarao Ramachar Ramachar Ramachar vs. vs. vs. Muthukumaraswamy Gounder & Anr. (1982) Muthukumaraswamy Gounder & Anr. (1982) Muthukumaraswamy Gounder & Anr. (1982) 3 SCC 508m, SCC 508m, SCC 508m, the Supreme Court noted, that there were interpolations of material nature in the document and no explanation was offered on that count. The Appeal preferred by one of the appellants (Defendant No.2) was dismissed. The Court held that the motivated interpolation in a solemn document completely vitiates the document. In the other Appeal which was pending, the Court noted that the High Court after evaluating the evidence recorded a conclusion that the plaintiff was always ready and willing to perform his part of the agreement and consequently found no reason to differ from the view taken by the High Court. . At this stage we may note the judgment, reliance on which placed by the Counsel for respondent No.11 namely M/s.Bharat Barrel & Drum Mfg. M/s.Bharat Barrel & Drum Mfg. M/s.Bharat Barrel & Drum Mfg. Co. Co. Co. Ltd. vs. Hindustan Petroleum Corporation Ltd. Ltd. vs. Hindustan Petroleum Corporation Ltd. Ltd. vs. Hindustan Petroleum Corporation Ltd. & Ors., AIR 1998 Bom.170. Ors., AIR 1998 Bom.170. Ors., AIR 1998 Bom.170. The issue before the 17 Division Bench of this Court was consideration of explanation to Section 16(c) of the Specific Relief Act. That explanation requires that the plaintiff must aver performance of or readiness and willingness to perform the contract according to its true construction. The learned Division Bench held, that the correct interpretation would be, if the plaintiff avers his readiness and willingness to perform the contract according to its true construction by the Court. The Court also noted that in an ordinary suit for specific performance where the parties are ad idem about the interpretation of the agreement it is not necessary that the plaintiff should adopt any particular set off words to indicate that he was and is ready and willing to perform the agreement. The Court on the facts of that case was considering not an ordinary suit for specific performance, but a case where parties were not at ad idem about the interpretation of an agreement. The ratio of the judgment therefore is that parties must aver readiness and willingness to perform the contract according to the interpretation the Court places upon it in a case where there is a dispute about its true interpretation. The ratio of that judgment will, therefore,, have to be applied in a a case where there is a dispute as to the true interpretation of a document for agreement to sell. The , parties must aver in such a case that they are ready and willing, to perform the contract as the Court interpreted by 18 the Court. In the instant case firstly we are at an interim stage. It is still open to the plaintiffs to amend the plaint if the circumstances so warrant. Secondly there is no dispute about the terms of the contract. The dispute is whether it is an agreement to sell or a security agreement or alternatively development agreement. . In an unreported judgment in Mrs. Pallavi R. Mrs. Pallavi R. Mrs. Pallavi R. Karani Karani Karani vs. M/s.Dadhawala Builders Pvt. Ltd. & vs. M/s.Dadhawala Builders Pvt. Ltd. & vs. M/s.Dadhawala Builders Pvt. Ltd. & Ors., Ors., Ors., in Appeal No.784 of 1991 in Notice of Motion in Appeal No.784 of 1991 in Notice of Motion in Appeal No.784 of 1991 in Notice of Motion No.2743 No.2743 No.2743 of 1990 in Suit No.3067 of 1990 of 1990 in Suit No.3067 of 1990 of 1990 in Suit No.3067 of 1990 a learned Division Bench after considering the earlier judgments of this Court, noted that the order of 7th March, 1988 in Appeal No.285 of 1988 in Notice of Motion No.76 of 1987 cannot be read as laying down the law that specific performance for development can never be granted or interim relief in such a suit should always be refused. In Notice of Motion No.763 of 1989 in Suit No.844 of 1989 M/s.Ghori & Khatri Builders (Regd) Vs. Iqbal Hussein Usman Fakir Mohamed Mansoori & ors., decided on February 8, 1991 a learned single Judge of this Court relying on the judgment in Appeal No.285 of 1988 in Notice of Motion No.76 of 1987 in Suit No.3419 of 1986 held on the facts there, that the agreement was a development agreement and accordingly refused to grant injunction. In the Appeal which was preferred, being Appeal No.218 of 1991 in Notice of Motion No.763 of 19 1989 in Suit No.844 of 1989, the Appellate Bench by order dated March, 9, 1993 held that the contention advanced was that it was a finance agreement. The learned Appellate Bench did not agree with the view of the learned single Judge and held that the Agreement would indicate that the respondents therein had created interest in the land and felt that the Agreement was clearly for development of the property and allowed the Appeal. Next reliance was placed in the case of Volition Investment Pvt. Ltd. vs. Mrs. Volition Investment Pvt. Ltd. vs. Mrs. Volition Investment Pvt. Ltd. vs. Mrs. Madhuri Madhuri Madhuri Jitendra Mashroo and etc., AIR 2003 Bom.360. Jitendra Mashroo and etc., AIR 2003 Bom.360. Jitendra