1 app481-484.934.sxw ast/- IN THE HIGH COURT JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL SIDE JURISDICTION APPEAL NO. 481 OF 2006 IN NOTICE OF MOTION NO.1139 OF 2003 IN SUIT NO.745 OF 2003 Narayan R. Gowda, S/o. Raju Gowda. .. Appellant. V/s. Dilipbhai Durlabhji Shah & Anr. .. Respondents. WITH APPEAL NO. 482 OF 2006 IN NOTICE OF MOTION NO.1138 OF 2003 IN SUIT NO.1014 OF 2003 Narayan R. Gowda, S/o. Raju Gowda. .. Appellant. V/s. Shri Ramnikbhai D. Shah(H.U.F.)& Anr. .. Respondents. WITH APPEAL NO. 483 OF 2006 IN NOTICE OF MOTION NO.1136 OF 2003 IN SUIT NO.858 OF 2003 Narayan R. Gowda, S/o. Raju Gowda. .. Appellant. 2 app481-484.934.sxw V/s. Sharad D.Shah(HUF) & Anr. .. Respondents. WITH APPEAL NO. 484 OF 2006 IN NOTICE OF MOTION NO.1136 OF 2003 IN SUIT NO.746 OF 2003 Narayan R. Gowda, S/o. Raju Gowda. .. Appellant. V/s. Shri Nehal S. Shah & Anr. .. Respondents. WITH APPEAL NO. 934 OF 2005 IN NOTICE OF MOTION NO.1135 OF 2003 IN SUIT NO.816 OF 2003 Narayan R. Gowda, S/o. Raju Gowda. .. Appellant. V/s. Jayesh R. Shah(since deceased) through Lrs. & Anr. .. Respondents. WITH APPEAL NO. 935 OF 2005 IN NOTICE OF MOTION NO.1140 OF 2003 IN SUIT NO.1057 OF 2003 3 app481-484.934.sxw Narayan R. Gowda, S/o. Raju Gowda. .. Appellant. V/s. Nehal S. Shah & Anr. .. Respondents. --- Mr. P.K.Samdhani, Sr.Advocate with Mr. Chetan Kapadia i/b. M.G.Gawde for the Appellant. Mr.A.R.Mishra for Respondent No.1. Mr.D.D.Madon, Sr.Advocate i/b. K.R.Tiwari & Co. for Respondent No.2. --- CORAM: D.K.DESHMUKH AND V.R.KINGAONKAR,JJ. DATED: APRIL 12, 2010 P.C.: 1. By these Appeals, the Appellants challenge the Order dated 3rd October, 2005. The facts and circumstances involving in all these appeals are similar. Therefore, they can be conveniently disposed of by a common order. 2. The relevant facts are that the Plaintiffs filed 4 app481-484.934.sxw Suits in this court against two defendants i.e. Shri Ketan R Shah and Shri Narayan R. Gowda claiming a decree of declaration that the agreement entered into by the Plaintiffs with the Defendant No.1 for allotment of flats in the building that the Defendant No.1 was proposing to construct is valid and a decree for Specific performance of that agreement including delivery of possession. The case of the Plaintiffs was that the Defendant No.1 had entered into an agreement with the Plaintiff to allot them flats in a development scheme, which he was to undertake. That scheme was however not completed. However, thereafter, Defendant No.1 acquired rights to develop a slum rehabilitation scheme and therefore, he agreed to allot flats free sale component from that slum rehabilitation scheme in favour of the Plaintiffs. The case of the Plaintiffs in the plaint is that the Defendant No.1 entered into a Memorandum of Understanding with the Defendant No.2 for development of the scheme and therefore, they are entitled to the reliefs that are claimed in the plaint against the second defendant also. 5 app481-484.934.sxw 3. In these suits, Notice of Motions were taken out claiming an order of temporary injunction restraining the Defendants from creating third party rights in the flats, which according to the Plaintiffs, Defendants had agreed to sell to them. Notice of Motions were opposed mainly by the Defendant No.2. The case of the Defendant No.2 was that the Society of the Slum Dwellers had entrusted the project of development on the plot of land to the defendant No. 1. He was unable to complete the project. He entered into a Memorandum of Understanding with the Defendant No.2 for completion of the project. But then, nothing could happen. Ultimately, the Society of the Slum Dwellers terminated the agreement with the Defendant No.1 and entered into an agreement with a Company called M/s. Sai Shakti Developers and Builders Private Limited, of which second defendant is the chairman and it is that company which completed development and handed over the building that was constructed for housing the slum dwellers and utilised free sale area for construction of a 6 app481-484.934.sxw hotel. The case of the second defendant is that the Plaintiffs have no privity of contract with the second defendant. Learned Single Judge decided the Motion by this order, which is impugned in these Petitions. The learned Single Judge not only granted temporary injunction that was sought by the Plaintiffs, but also appoint a Court Receiver, though admittedly, no prayer was made by the Plaintiffs for appointment of Court Receiver. It is this order which is impugned in these appeals at the instance of the Defendant No.2. 4. Learned Counsel appearing for the second defendant submits that the order impugned in the Appeals suffers from total and complete non- application of mind and misappreciation of the facts on record. The learned Counsel submits that the learned Single Judge totally lost sight of the fact that there was a clear statement made in the affidavit filed on behalf of the second defendant dated 7th April, 2005 stating therein that the agreement entered into by the slum dwellers society 7 app481-484.934.sxw with the first defendant was terminated and that a fresh agreement for development was entered into with a company by name M/s. Sai Shakti Developers and Builders Private Ltd. and it is that company, which has carried out that development. The learned Counsel further submits that the learned Single Judge did not consider that there was no privity of contract between the plaintiffs and second defendant and the company which actually carried out the development and therefore, the Plaintiffs could not have claimed any relief against the second defendant. The learned Counsel submits that the observation made by the learned Single Judge that there is any fraud practised by the second defendant, is totally uncalled for and unnecessary. 5. Learned Counsel appearing for the Plaintiffs on the other hand submits that the second Defendant is guilty of suppressing relevant and material facts from this court and therefore, relying on the two Judgments of the Supreme Court, one in the case of S.P.Chengalvaraya Naidu(dead) by L.Rs. 8 app481-484.934.sxw V/s.Jagannath(dead) by L.Rs & ors.[AIR 1994 SC 853] and other in the case of Dhananjay Sharma v/s. State of Haryana & Ors.[AIR 1995 SC 1795], the learned Counsel submits that because the defendant No.2 is guilty of fraud, not only orders should be made against him, but action should be taken against him for fraud and perjury. Not only the defendant NO.2 had entered into Memorandum of Understanding with Defendant No.1 but he had also entered into a partnership deed, which they had suppressed from the Court. Therefore, according to the learned Counsel, it is clear that there was privity of contract between the Plaintiffs and Defendants. 6. From the record, we find that there was an agreement entered into for allotment of flats between Plaintiffs and Defendant No.1. It also appears that there was a Memorandum of Understanding entered into between Defendant No.1 and Defendant No.2 in relation to the same project. However, that Memorandum of Understanding in clear terms provided that any agreement the defendant No.1 might have entered into 9 app481-484.934.sxw will not be binding on the Defendant No.2. The relevant clause is Clause-2, reads as under: 2. The 2nd Party has agreed to bear the entire expense of the development which includes, construction cost, construction of transit camps, departmental expenses and shall not call upon the 1st Part to make any contribution. Similarly, the Party of the 1st Part shall not call upon nor make the 2nd Party responsible for any expenses, payment, liabilities incurred by him, prior to the date of execution hereof. Therefore, the Memorandum of Understanding will not result in creating any privity of contract between the Plaintiffs, who had entered into an agreement with Defendant No.1 before the date of Memorandum of Understanding with the Defendant No.2. 7. Then, the learned Counsel submitted that thereafter there was the Deed of Partnership entered into between the Defendant No.1 and Defendant No.2. The learned counsel submitted that it is because of that Partnership Deed, there will be privity of contract between the plaintiffs and defendant No.2. What is however, pertinent to be noted is that in the plaint, till the impugned order was passed, there 10 app481-484.934.sxw were no averments made in relation to this alleged partnership deed nor the documents were produced and that the documents were produced before us. 8. When we enquired with the Counsel appearing for the Appellant, he invited our attention to the plaint in Suit No.1525 of 2005 filed by the Defendant No.1 in this Court, wherein it appears that there is a prayer made by the Defendant No.1 that Deed of Partnership, which is alleged to have been entered into between the first and second defendant should be registered. This clearly shows that there was no registered partnership entered into between the first defendant and second defendant. Even the suit appears to have been withdrawn by Defendant No.1. What is further pertinent to be noted is that though the Plaintiffs rely on the Deed of Partnership to claim that rights were created in their favour by the Partnership deed, they have not cared even to deny following averments made in the affidavit of the second defendant dated 7th April, 2005. I say that after the termination of the 11 app481-484.934.sxw Agreement with the defendant No.1, the said New Sanjay Nagar(SRA)Co-operative Housing Society Ltd. entered into an Agreement for development with the said company M/s.Sai Shakti Developers and Builders Pvt.Ltd., of which I am the Chairman. I crave leave to refer and rely upon the Agreement dated 20th October 2000 made between the said New Sanjay Nagar(SRA) Co- operative Housing Society and said company M/s. Sai Shakti Developers and Builders Pvt.Ltd., when produced. I say that as the 1st Defendant did not commence any development work on the said plot of land bearing CTS No.539/C-1(pt.) under SRA Scheme, he could not have had any right to construct the building to sell in market and the question of the defendant No.1 having any authority to sell any flat in the said SRA Scheme did not arise at all. Perusal of the above quoted averments shows that as the defendant No.1 did not complete the development work, as agreed, the slum dwellers society terminated the agreement in his favour and entered the agreement of development with a company by name M/s.Sai Shakti Developers and Builders Private Ltd., and it is that company, which completed development work. By not denying this averments, the Plaintiffs have accepted this position that development actually on the land is carried out by a company by name M/s.Sai Shakti Developers and Builders Private Limited. The learned Single Judge also lost site of the fact that as per averments, which have not been denied by the 12 app481-484.934.sxw Plaintiffs, actual development on the land is carried out by M/s. Sai Shakti Developers and Builders Private Limited. That Company admittedly has not been joined as party defendant in the Suit and still the learned Single Judge has granted interim order, which will adversely affect the interest of the party, which is not before the Court. 9. We also find that apart from these things, admittedly, there was no prayer made for appointment of Court Receiver. The learned Single Judge however, proceeded to appoint Court Receiver in the absence of any prayer made. In our opinion, there can never be any justification for the Court to grant any relief. which is not prayed for, unless that relief is lesser relief, when a larger relief is prayed for. 10. We find that the interim order granted by the learned Single Judge was totally uncalled for. The Plaintiffs suit was absolutely frivolous and suffered from non-joinder of the necessary party and therefore, no interim order could have been made by 13 app481-484.934.sxw the learned Single Judge in favour of the plaintiffs. In the result, the Appeals succeed and allowed. The Orders impugned in the Appeals are set aside. Notice of Motions on which those orders have been made are disposed of. Court Receiver stands discharged without passing of accounts. 11. At this stage, request is made that the operation of this order be stayed. After having found that the impugned order is totally uncalled for and unjustified, in our opinion, it is inappropriate to continue operation of the impugned order. Hence, request is rejected. (D.K.DESHMUKH,J.) (V.R.KINGAONKAR,J.)