1 pdp IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORIDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO. 581 OF 2009 IN NOTICE OF MOTION NO. 2214 OF 2008 IN SUIT NO. 1805 OF 2008 WITH NOTICE OF MOTION NO. 25 OF 2010 Utsav Infrastructure .. Appellant (Org.Deft. No.47) Vs. Kukreja Construction Co. and ors. .. Respondents (Respt. No.1 -Org. Plaintiff and Respt. Nos. 2 to 47 – Org. Deft. Nos.1 to 46) WITH APPEAL NO. 22 OF 2010 IN NOTICE OF MOTION NO. 2114 OF 2008 IN SUIT NO. 1805 OF 2008 2 Naval Vasant Shinde and ors. .. Appellants (Org.Deft.Nos.13 to 16, 20 to 24, 29, 30, 32 to 34, 36 & 37) Vs. Kukreja Construction Co. & ors. .. Respondents (Respdt.No.1 – Org. Plaintiff, Respdt. Nos. 2 to 32 – Org.Deft. Nos.1 to 12, 17 to 19, 25 to 28, 31, 35 & 38 to 47) Mr. Ravi Kadam, Senior Counsel a/w Mr. Girish Godbole, Mr. Ashish Kamath, Mr. G.V. Bhagwat, Mr. Y. V. Divekar i/by Divekar & Co. for appellant in Appeal No. 581/09 and for respondent no.32 in Appeal No. 22/2010. Mr. D.D. Madan, Senior Counsel a/w Naushad Engineer, Vivek Shetty i/by DSK Legal for respondent no.1 in Appeal No. 581/09. Mr. Arif Bookwala, Senior Counsel a/w Naushad Engineer & Chirag Mody i/by DSK Legal for respondent no.1 in Appeal No. 22/2010. Mr. A.V. Anturkar a/w Mr. Anirudha Joshi i/by Nivit Srivastava for appellants in Appeal No. 22 of 2010 and for respondent nos.14 to 17, 20 to 24, 29, 30, 32 to 34, 36 and 37 in Appeal No. 581 of 2009. CORAM: B. H. MARLAPALLE & SMT. V.K. TAHILRAMANI, JJ. February 08, 2010. 3 ORAL JUDGMENT (Per B.H. Marlapalle,J.): 1. Heard the learned counsel for the appellants. 2. Admit. 3. Respondents waive service. Print dispensed with as private paper book copies have been circulated and appeals have been finally heard. 4. Both these appeals are directed against the interlocutory order dated 13th October, 2008, passed by the learned Single Judge, thereby partly allowing Notice of Motion No. 2114 of 2008 filed in Suit No. 1805 of 2008 by the present respondent no.1 – Developer. The Notice of Motion has been made absolute in terms of prayer clause (a), except the bracketed portion and, therefore, the relief granted by the learned trial Judge and which is the subject matter of challenge in these appeals reads as under: “That pending the hearing and final disposal of the suit, the defendants, their servants and agents be restrained by an order and injunction of this Hon’ble Court from disposing of, 4 transferring, alienating, encumbering or developing the suit property or creating third party rights of any nature whatsoever on the suit property or any part thereof.” Appeal No. 581 of 2009 has been filed by defendant no.47 and Appeal No. 22 of 2010 has been filed by the members of the owners’ family from amongst defendant nos.1 to 46. Hence both the appeals are being decided by this common judgment. 5. According to the plaintiff-company, defendant nos.1 to 46 – the members of the Shinde family in their capacity as the owners of the suit plot admeasuing about 8800 sq.yrds. equivalent to 7579.44 sq.mtrs. bearing C.T.S. Nos. 1813 and 1814 of Chembur, Bombay Suburban District had put in its possession pursuant to the development agreement dated 29/6/1981. Broadly, it was agreed that the four structures standing on the suit plot i.e. “A”, “B”, “B-1” and “B-2” would be vacated and demolished and a multi- storied structure will be constructed thereon. The structure “A” was occupied by the tenants, whereas structures “B”, “B-1” and “B-2” were in occupation of the owners. The total FSI of the suit plot would be about 80,000 sq.ft. The developer agreed to pay a compensation of Rs.75/- per 5 sq.ft. of the built up area (FSI) to the owners after the plans were sanctioned and the owners would be provided with a built up area of 5000 sq.ft. for their occupation. On this area of 5000 sq.ft. the developer would not be entitled to pay any compensation and, in fact, the owners would pay a consideration of Rs.6,00,000/- for the construction of that area. Thus the consideration of Rs.75/- per sq.ft. was on the balance of about 75000 sq.ft. built up area. It was also agreed that it would be the owners’ responsibility to get building “A” vacated from the tenants and thereafter on sanctioning of the development plan, the consideration amount will be worked out. Some amount, out of the total consideration, was already paid. Parties signed supplementary agreements on 2/11/1990, 25/7/1991, 31/1/1991 and 14/2/1991. In the meanwhile, the owners executed a power of attorney in favour of the developer on 3/3/1989. The development plans were sanctioned in the year 1994, the developer settled with three tenants but could not settle with the remaining seven tenants (we are now informed that two more tenants have settled after the impugned order was passed) and declarations were signed on or after 29/1/2003 between the developer and the owners. The developer constructed one structure of 10 flats with a built up area of 5000 sq.ft. and it was handed over for the occupation of the members of the families of owner nos.1 to 5 and to their nominees. 6 Two of these ten flats have been sold or were sought to be sold by the allottees by seeking permission/no objection from the developer. 6. It is the case of the plaintiff that it received caveat notice in May, 2008 and it learnt that the owners had alienated the entire suit plot in favour of defendant no.47 by way of a registered sale deed dated 30/12/2006 and, therefore, plaintiff filed Suit No. 1805 of 2008 seeking dual reliefs i.e. (a) for the declaration that the agreements signed between the owners and the developer are binding, subsisting and the agreements dated 28/12/2006 and 30/12/2006 are illegal, void ab initio and unenforceable and (b) for the specific performance of the agreement dated 29/6/1981 as well as the supplementary agreements signed thereafter. Notice of Motion was taken out praying for injunction and as noted earlier it has been made absolute in terms of the relief quoted hereinabove. 7. It was submitted by Mr. Anturkar the learned counsel appearing for the owners that the agreements signed between the developer and the owners cannot be a subject matter of a suit for specific performance, the plaintiff did not take any steps for almost 25 years from the date of the first agreement so as to comply with its part of the contract 7 and even the agreed consideration amount was not paid as well as out of the 10 constructed flats, only 5 were handed over to the owners, as against ten flats agreed upon. It was, therefore, claimed that the developer acted in breach of the agreement, did not take any steps for enforcement of the agreement for about 25 years, the owners on their part had time and again from 1995 onwards approached the developer and requested to take steps for early construction of the building and despite such oral request, the developer refused to proceed with the development of the plot. As there was no response from the developer, the owners, as a last resort, have entered into the sale transaction dated 28/12/2006, which has been duly registered, with defendant no.47 who has offered much better deal than the plaintiff. Mr. Kadam the learned Senior Counsel appearing for defendant no.47 (appellant in Appeal No. 581 of 2009) has reiterated the arguments advanced by Mr. Anturkar and also submitted that the sale deed has been registered and the owners approached defendant no.47 only after they realized that the plaintiff had by its inaction refused to go ahead with the development activities for a period of more than two decades even after the plans were sanctioned in the year 1994 by the Municipal 8 Corporation. It was also pointed out that pursuant to the registered sale deed between the owners and defendant no.47, substantial amount of consideration has already been paid to the owners by defendant no.47 and for almost a period of one and half years, the developer did not approach the court. Both the appellants have also disputed the possession of the plaintiff over the suit plot. The appellants have relied upon the decisions in the case of M/s. Bharat Barrel & Drum Mfg. Co. Pvt. Ltd. vs. Hindusthan Petroleum Corporation Ltd. and ors. [AIR 1989 Bombay 170] and Kishorsinh Ratansinh Jadeja vs. Maruti Corp. and ors. [2009(5) SCALE 229]. 8. Mr. Madan and Mr. Bookwala, the learned Senior Counsel, appearing for the plaintiff have taken us through the terms and conditions of the original agreement dated 29/6/1981, the supplementary agreements, the power of attorney dated 3/3/1989 as well as the declaration signed on or after 29/1/2003 between the developer on one hand and the owners on the other and it is urged before us that there was no time schedule fixed for completion of the development work in any of these agreements, the developer has not only paid the agreed compensation amount but indeed about Rs.3,00,000/- more, though it was the responsibility of the owners to 9 get the tenants shifted from the suit premises, they could not do so and the developer settled with three of these tenants by 1991, the plans were approved in the year 1994 by the Municipal Corporation, 10 family members of the owners or their nominees have been put in possession of 10 flats of 500 sq.ft. each built up area. It was also pointed out that in the supplementary agreements it was agreed between the parties that the amount of Rs.6,00,000/-, which was agreed to be given by way of construction costs by the owners to the developer, was given up and any additional FSI, that would be available to the developer, would also be counted for payment of compensation at the rate of Rs.75/- per sq.ft. However, if the TDR would be available by way of additional FSI, there would not be any compensation payable to the owners, on such an additional FSI. It has also been pointed out that time was not essence of the contract and till the suit was filed, at no point of time, any of the owners issued any notice to the developer pointing out that constructed flat of a total built up area of 5000 sq.ft. were not handed over to owner nos.1 to 5 and that the developer had acted in breach of any of the agreements. Notice of termination of any of these agreements was not received either from the owners or through their Advocates and the developer was taken by surprise when it received a caveat notice in May, 2008 and, therefore, it 10 had no alternative but to file the suit for the dual reliefs i.e. relief for specific performance as well as declaration. Reliance was placed on the decision of this court (DB) in the case of Chheda Housing Development Corporation vs. Bibijan Shaikh Farid and ors. [2007(3) Mh.L.J. 402] so as to point out that the development agreement could be specifically enforced in a suit for specific performance. It was further pointed out that the facts in the case of Kishorsinh Jadeja (Supra) were entirely different and the directions issued by the Apex Court in the said case are based on the peculiar facts of that case alone. 9. The learned Single Judge noted the allegations that on 31/3/2008 one Shri Nitin Gandhi tried to enter the suit property and, therefore, a police complaint was filed by the plaintiff and they were served with a caveat on behalf of defendant no.47 and the said Shri Gandhi on 5/4/2008. By a further letter dated 5/5/2008 the attorney of defendant no. 47 disclosed that there were two deeds of conveyance entered into and executed in favour of defendant no. 47 by the owners. The plaintiff obtained a copy of the conveyance dated 30/12/2006 executed by the defendant nos. 6 to 8, 10 to 16, 20 to 34, 36 and 37 in favour of defendant no. 47. The plaintiff also obtained a copy of the conveyance executed by 11 defendant nos.1, 3, 4, 44 and 45 in favour of defendant no.47. The conveyance dated 30/12/2006 was registered in January 2007 and conveyance dated 28/12/2006 was lodged for registration along with Deed of Confirmation dated 20/9/2007. The Notice of Motion was opposed by defendant no.13 by filing a reply and so also by defendant no.47. The defendant no.15 filed an affidavit in his capacity as the Constituted Attorney of defendant nos. 15, 16, 20, 21 to 24, 29, 30, 32 to 34, 36 and 37 adopting the averments in the affidavit of the defendant no. 13. It was claimed by the defendant no.13 before the learned trial Judge that the suit agreements had come to an end on account of the plaintiff’s failure to fulfill their obligations. The rejoinder filed by the plaintiff was also taken into consideration by the learned trial Judge and he also referred to the additional affidavit regarding the allotment of 10 flats with a total built up area of 5000 sq.ft. 10. After having heard the respective parties, the learned trial Judge held that the issue as to whether the agreement dated 29th June 1981 could be enforceable for a specific performance is a matter which will have to be gone into during the trial of the suit and, therefore, he proceeded to consider the plaintiff’s prima facie case on the basis of the agreement 12 dated 29/6/1981, the subsequent supplementary agreements, the power of attorney and the declarations signed between the owners and the plaintiff. He noted that a sum of Rs.2,24,000/-, with reference to the agreement dated 29/6/1981 was the only balance amount and after signing the supplementary agreement on 2nd November, 1990, an amount of Rs. 10,50,000/- as agreed as the total compensation was paid to the owners. Till the defendant no.13 had filed an affidavit in the suit in the year 2008, none of the owners had complained that the plaintiff failed to comply with the requirements of providing the total area of 5000 sq.ft. to the co-owners, though the declaration referred to the allotment of 500 sq.ft. to each branch and there did not seem to be any dispute about the execution of joint declaration on 29/1/2003 or there about. The names of 10 allottees were disclosed before the trial court and it was pointed out that the five other allottees were the nominees of the owners. It was under these circumstances, the learned trial Judge reached to the conclusion that there was a prima facie material available on record to show that Shinde families were allotted 10 flats and the consideration amount, as agreed and modified in the supplementary agreements, was paid by the developer to the owners. As per the trial court, the material on record, prima facie, indicated that the plaintiff had not acted in breach of the agreements for development and the 13 power of attorney. 11. As far as the decision in the case of Chheda Housing Development Corporation (Supra) is concerned, undoubtedly it holds that in a given set of facts, an agreement for development can be a basis for specific performance under the Specific Reliefs Act and the enforceability of the agreement depends on the nature of terms and conditions set ouit therein. As noted earlier, in the instant case, the reliefs sought for by the plaintiff-company are for declaration as well as specific performance. Even though the learned trial Judge noted that the issue as to whether the agreements could be enforceable under the Specific Reliefs Act is an issue to be decided during the trial of the suit, in our opinion, the prima facie conclusions arrived at in the impugned order so as to grant a limited injunction, as noted hereinabove, cannot be termed as erroneous so as to call for interference in these appeals. In his well reasoned order, the learned trial Judge has set out a prima facie case to grant the said reliefs and the learned counsel for the plaintiff are right in their submissions that the facts in the case of Kishorsinh Jadeja are not comparable to the facts of this case. 14 12. We have noted from the records that though the impugned order has been passed on 13th October, 2008, the defendant no.47 has filed Appeal No. 581 of 2009 on 10/12/2009 and the owners have filed Appeal No. 22 of 2010 on 11/1/2010. The restraining order impugned in these appeals operates against all the parties i.e. the plaintiff as well as the defendants. But for the averments made in the Written Statement by the defendants, there is no material to record a prima facie finding that the suit plot was not put in possession of the plaintiff. On the other hand, the power of attorney dated 3/3/1989 as well as the supplementary agreement dated 2/11/1990 state that the suit plot was put in possession of the plaintiff. At no point of time notice of termination of the agreement dated 29/6/1981 or the supplementary agreements and revocation of the power of attorney dated 3/3/1989 was issued by the owners to the plaintiff. It was contended on behalf of the defendant no.47 that he should be allowed to go ahead with construction on the open plot at his costs on his undertaking that he would not create any third party interests, he would not claim any equity and would demolish the entire structure in case the suit is finally decreed in favour of the plaintiff. It was further submitted that the suit plot is in a prime locality and would not be available for construction by anybody in view of the impugned order of temporary injunction. These 15 submissions did not impress us and defendant no.47 cannot be allowed to argue on such a relief in a Notice of Motion filed in the suit. It prima facie appears from the record that defendant no.47 had the knowledge that the owners had already entered into agreement with the plaintiff and despite the same, the defendant no.47 did not take any steps, either to undertake a search of the title or to put on notice the plaintiff about his intentions to enter into the sale deed with the owners in respect of the suit plot. 13. In the premises, we are satisfied that the challenge raised in these appeals against the interlocutory order is devoid of merits and these appeals must fail. They are hereby dismissed. Parties to bear their own costs. 14. Notice of Motion No. 25 of 2010 does not survive and the same shall stand disposed as such. (SMT. V.K. TAHILRAMANI,J.) (B. H. MARLAPALLE, J.)