1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.2741 OF 2007 IN SUIT NO.2028 OF 2007 Ravi Prakash Parikh ...Plaintiff Vs. Ms. Karishma R. Uchil through her father and Constituted Attorney Rajesh Manjiappa Uchil & Anr. ...Defendants Mr.Piyush Shah for Plaintiff Mr.P.M. Shah for Defendants 1 & 2 CORAM: SMT.ROSHAN DALVI, J. DATED: 14 TH OCTOBER, 2008 P.C. 1. The suit is for specific performance of the agreement for sale dated 2nd March, 2006. The agreement is in respect of the flat of the Defendants. Defendant No.1 is the daughter of Defendant No.2. The Defendant No.2 has applied as the guardian- ad- litum of his other daughter, one Aishwarya, who was then a minor. These parties shall be referred to as “Defendant ”. The suit flat stood in the name of the Defendant. The Defendant, as the transferor, agreed to transfer the suit flat to the Plaintiff. The entire consideration was Rs.31.5 lakhs. Rs.1 lakh was paid as earnest money 2 prior to the execution of the agreement. Rs.4.5 lakhs were paid on the execution of the agreement, remaining 26 lakhs were to be paid on or before 11 th April, 2006 against possession. Time was the essence of the agreement. 2. The Plaintiff was to purchase the suit flat from a loan obtained from I.C.I.C.I.Bank , since the flat was inter alia in the name of the minor, I.C.I.C.I Bank refused to sanction the loan unless the guardian was appointed by the Court. Hence the father of the minor child applied to this Court for appointing him as the guardian of the minor child. Misc. Petition No.14 of 2006 came to be filed. He was appointed guardian of the minor child Aishwarya on 12 th January, 2007. He was directed to receive and deposit 50% of the consideration received upon the sale of the flat as per the agreement dated 2nd March, 2006 in the bank account of the minor child showing him as the guardian. 3. Sale and transfer of the suit flat was allowed as per the agreement of sale and the supplementary agreements signed by the parties. The supplementary agreements were annexed as Exhibits- F & H to that Petition. These have been recited in prayer (b) of the Petition. 4. It is contended by the Plaintiffs that as required by the 3 Bank the NOC was obtained by Defendant on 6th March, 2006 for being submitted to I.C.I.C.I Bank for sanction of the loan. Thereafter the Plaintiffs entered into a supplementary agreement dated 7 th April, 2006. Time for making payment of balance consideration of Rs.26 lakhs was extended under the supplementary agreement. This supplementary agreement came to be executed, because the bank would not sanction the loan unless the order of the Court appointing guardian- ad- litum was passed. Hence the parties agreed to extend the time for making payment and the Defendant applied for and obtained the required order of the Court appointing him as guardian- ad- litum. 5. It is the Plaintiff's case that for that purpose the I.C.I.C.I Bank re-sanctioned the loan on 11 th January, 2007 and the Defendant obtained the aforesaid orders on 12th January, 2007 and 25 th January, 2007. 6. The Plaintiff by his letter dated 12 th March, 2007 wrote to the Society where the flat was situated that the Society would require to give the NOC in the enclosed format, a building occupancy certificate issued by the BMC and the property register card of the CTS number where the property was situated. The format of the NOC required by the I.C.I.C.I Bank was enclosed with that letter. This exercise 4 was undertaken to obtain the loan. 7. It may be mentioned that these are the usual requirements for a bank or a financial institution sanctioning a loan in respect of any flat in any Co-operative Society. The NOC shows that the flat is free from encumbrances and there are no claim of other parties. The building occupancy certificate shows that the flat is in a building authorisedly constructed under sanctioned plans of the BMC. The property register card shows the title of the Society. These documents would be required not only for seeing a clear title but also as a security for the financial institutions granting the loan to be able to create mortgage or a charge of the flat for which the loan is sanctioned and granted. 8. In reply to the letter dated 12 th March, 2007 the Defendant by his letter dated 20 th March, 2007 mentioned about the High Court order appointing him guardian -ad- litum. He also mentioned about the documents requested by the Plaintiff from the Society which were given by the Society earlier on 22 nd February, 2006. He further stated about considering the order appointing him guardian- ad- litum and directions regarding investment of 50% share of the minor. He further stated about the legal notice received by the 5 Society on 9 th January, 2007 from “Some one claiming to be holding certain documents” pertaining to the suit flat. He showed his inability to travel to Bombay from Bangalore due to his work pressure and his children's annual examination. The Plaintiff once again by his letter dated 26th March, 2007 mentioned about the execution of the supplementary agreement as well as the orders of the Court and the fresh NOC required by the I.C.I.C.I Bank in addition to the earlier NOC issued by the Society on 22nd February 2006. The Plaintiff called upon the Defendant to expedite the issue of NOC, which the Society wanted to have done through the Defendant. The Plaintiff repeated the said request in his further letter dated 16 th April 2007. 9. The Defendant purported to terminate the agreement of the Plaintiff by his notice of termination dated 28 th April, 2007 in continuation of his letter dated 20 th March, 2007 which was in reply to the Plaintiff's earlier letter dated 12th March, 2007. The reason mentioned in the notice is “unreasonable requirement” raised by the Plaintiff in his letter dated 12 th March, 2007. The Defendant referred to the agreement for sale dated 2nd March, 2006 as well as the supplementary agreement dated 7th April, 2006 and contended that because the time was the essence of the contract and the Plaintiff declined to make payment both the 6 agreements stood revoked, cancelled and terminated. The Defendant offered to refund the amount along with 10% interest thereon. 10. “The unreasonable requirements” in the letter dated 12th March, 2007 would be first required to be seen. The letter mentions about the fact of the minority of one of the daughters in whose name the flat stood. It was because of her that the Misc. Petition was required to be filed and an order obtained from the Court permitting the sale of the flat. The three documents required by the bank were NOC in prescribed form, O.C., and P.R. Card. No unreasonable requirement is seen in that letter. That letter has been replied on 20 th March, 2007. No grievance of any unreasonable requirement was made. Reference to the High Court Order was made. The Defendant was required to understand the order. It may be mentioned that the High Court order dated 12 th January, 2007 did not require the Defendant to invest 50% of the minor's share. It allowed the Defendant to deposit 50% of the consideration which represented the minor's share in a bank account of the minor showing the Petitioner as her guardian. The order did not restrain re-investment of that amount. It only required the Petitioner to deposit the minor's share in the bank account of the minor. Since the Petitioner as the guardian 7 would require to withdraw that amount for investing in any property in Bangalore as required by him that the amount was allowed to be deposited in a bank. The aspect of legal notice by “some one” is completely without particulars as no one has made any legitimate claim. The Defendant has shown no encumbrances upon the flat and hence, none could make any claim thereto. This aspect has been recited in the agreements between the parties also. 11. It is seen that after the letter dated 20 th March, 2007 the Defendant has sought to back out of the agreement and the supplementary agreement. If there was any unreasonable requirement the Defendant would have made a grievance in the letter dated 20 th March, 2007 itself. 12. The contention of the Defendant about the delay on the part of the Plaintiff is rather egregious. The entire delay has been because of the Defendant. The Defendant required to obtain the Court permission for selling the property standing in the name of his minor daughter. The Plaintiff could not have obtained finance from I.C.I.C.I Bank without such permission being obtained. The Defendant knew that the Plaintiff was to obtain loan from the bank. Hence, all the requirements of obtaining documents would follow as a matter of corollary. The NOC of the Society, O.C., and the 8 P.R. Card are the most basic requirements for grant of any loan by any Bank. The last paragraph of the Defendant's letter dated 20 th March, 2007 itself shows that the sale could not be completed because the Defendant could not travel to Bombay. He could not travel to Bombay because of his work pressure and his children's annual examinations. There is nothing on the part of the Plaintiff to show or suggest that the Plaintiff delayed or tried to resile from the agreement or the supplementary agreement admittedly executed and mentioned in the termination notice itself. In fact it is as per the supplementary agreement dated 7th April, 2006 itself that the Defendant sought to refund Rs.5.5 lakhs which were till then received by him as part consideration along with interest @ 10% p.a., thereon, as stated in the agreement dated 7 th April, 2006. 13. The Plaintiff's suit for specific performance of the agreement dated 2nd March, 2006 is, therefore, seen to be a legitimate action. The supplementary agreement dated 7th April, 2006 is essentially only to extend the time for performing the reciprocal promises of the parties under the agreement dated 2nd March, 2006. It is seen that the Defendant has sought to resile from the validly executed agreement after its execution came to be delayed only on account of the Defendant. 9 14. The excuse made out as a defence to the suit will have to be considered in view of the aforesaid position that prevailed prior to the suit. The Defendants' defence in the written statement goes further than the reasons stated in the notice of termination dated 28 th April, 2007 and also his prior letter dated 20 th March, 2007. The Defendant has sought to contend that despite the execution of the agreement dated 7 th April, 2006 a further oral agreement came to be made between the parties for paying a further amount of Rs.8.5 lakhs which was later agreed at Rs.7.5 lakhs for which the Defendant sought to amend page 3 of the agreement dated 7 th April, 2006 in Bangalore and sent that page by courier to the Plaintiff. He has further contended that when he came to Bombay, he met the Plaintiff's father, who instead chose to make payment of the additional amount in cash and hence, page 3 of the agreement which was modified by the Defendant was not substituted in place of the original page No.3 in the agreement dated 7th April, 2006. He claims a further sum of Rs.7.5 lakhs under such oral agreement. It is seen that the agreement dated 7th April, 2006 was prepared in 2 parts and the stamp duty payable was franked thereon. The 2 agreements have been made and have been signed by both the parties. The Defendant has signed each page of the said agreement including page No.3. 10 15. It is sought to be argued on behalf of the Defendant that the agreement dated 7th April, 2006 relied upon by the Plaintiff in the plaint is not the correct agreement, but the correct agreement is another agreement dated 7th April, 2006. My attention has been drawn to 2 franking Nos.09676 and 09677 thereon. Both the franking impressions are dated 7 th April, 2006 at 13.09 hours. The Defendant's Advocate has produced a xerox copy of the agreement in his possession to show me this fact. This shows that the Defendant was given a copy of the agreement dated 7th April, 2006. The Plaintiff's Advocate has produced both the original agreements duly franked as aforesaid, signed by the parties and initialed by the Defendant on each page. The copy of the agreement produced by the Advocate of the Defendant and shown to Court is verbatim the same as the agreements dated 7th April, 2006 franked as aforesaid. Page 3 is not seen to be altered. In fact that is not even the Defendants' case in his written statement. The only case of the Defendant is that he sought modification of the agreement, modified page 3, carried it to the Plaintiff but it remained at that. 16. It is the further case of Defendant that this agreement dated 7 th April, 2006 franked as aforesaid came to be 11 executed on 17 th July, 2006 but the date was not corrected. The Plaintiff has admitted this fact as true. The Plaintiff's Advocate explained that the parties re-entered into supplementary agreement essentially and only for extension of the period for the performance of the agreement caused the Defendant to make an application to the Court for being appointed guardian within 12 months of the date of the agreement. Since the permission of the Court for sale of the property of the minor was important, it was agreed that if such permission was not obtained, the agreement dated 20th March, 2006 would be terminated. The Defendant obtained the permission. He was appointed guardian- ad- litum. He was allowed to deposit the minor's share in the bank account of the minor showing him as guardian. There was no impediment upon re-investment of the amount. Prayers (a) and (b) of the Guardianship Petition were granted. Clause 2 of the supplementary agreement, which granted him time for that purpose came to be complied. There was no reason for termination of the agreement by either party. 17. It is seen that because of the passage of time the Defendant has sought to pressurise the Plaintiff to pay further consideration. There is no such agreement between the parties. The oral agreement pleaded by the Defendant stands excluded by the written agreement itself. The very 12 defence of the Defendant in the written statement shows that there has been no modification of the agreement dated 7th April, 2006. Hence the copy produced by the Defendant's Advocate is also verbatim the same as the original agreement produced by the Plaintiff. 18. It is only in reply to the Defendant's new case made out for the first time in the written statement, which is conspicuously absent in the correspondence between the parties prior to the suit, that the Plaintiff has produced the original agreements in Court and denied the Defendant's contention with regard to any substitution of page No.3 or any other oral agreement for payment of further consideration in cash. In fact the Plaintiff has clearly shown that the delay, if any, has been only on account of the Defendant. The Plaintiff as a flat purchaser, who would obtain loan from I.C.I.C.I Bank to make payment of the entire balance consideration. The Defendant having not known that fact, was enjoined to co-operate the Plaintiff to obtain the required NOC, O.C and P.R.Card as called upon by the Bank. This would be in addition to the earlier NOC given by the Society on 22 nd February, 2006 which was not in the “required format ”. 19. The Defendant has delayed the transaction though time 13 was of the essence of the contract. The Defendant has made excuses for not performing his part of contract. The Defendant required permission of the Court on which account they got the supplementary agreement executed. Thereafter the Defendant has sought to back out of the contract after being appointed guardian of his minor daughter. No unreasonable requirement has been demanded by the Plaintiff. In fact the Plaintiff has had to delay obtaining possession of the flat after part payment has already been made. No claim of any other party (“some one”) is also seen. The admission of the Defendant in the last para of his first letter dated 20 th March,2007 shows the transaction having been delayed on account of the Defendant himself. The Plaintiff has primafacie shown that he is entitled to specific performance of the agreement dated 2 nd March, 2006. He has also shown the unreasonableness of the notice of termination dated 28 th April, 2007. The Plaintiff is entitled to be granted the relief of injunction as prayed for in the Suit. 20. The Notice of Motion is made absolute in terms of prayer (a). 21. The Defendant shall not directly or indirectly dispose off, alienate, encumber, induct any 3rd person or create any 3rd 14 party rights in the suit flat or any part thereof by way of any transfer, assignment, license, or any agreement in favour of any party other than the Plaintiff pending the Suit. 22. The original Memorandum of Understanding dated 7th April, 2006 under franking Nos.09676 and 09677 as well as the copy of the Memorandum of Understanding dated 7th April, 2006 produced by the Defendant's Advocate as the copy relied upon by the Defendant in paragraph 22 of his written statement shall be kept in a sealed cover in the custody of the Prothonotary & Sr. Master of this Court pending the Suit. They shall be produced by the Prothonotary and Sr. Master only at the time of the recording of evidence in this Suit. Both parties shall be entitled to inspect these documents by notice to the Prothonotary & Sr. Master of this Court. 23. The written statement is filed. The admissions of the parties are recorded as follows:- i) The suit flat stands in the name of Defendant No.1 and Aishwarya Uchhal, the minor. Her father has been appointed her guardian- ad- litum under orders dated 12 th January, 2007 and 25 th January, 2007 of this Court. ii) The parties executed the agreement for sale in 15 respect of the suit flat on 2nd March, 2006. iii) The parties entered into a supplementary agreement on 7 th April, 2006. That agreement was actually signed and executed by the parties on 17 th July, 2006. iv) The Defendant had obtained the NOC of the Society dated 6 th March, 2006. 24. In view of these admissions the only controversy between the parties is whether the Defendant would have to be ordered and directed to specifically enforce the admittedly executed agreement dated 2nd March, 2006 or whether the Defendant would prove the oral agreement set up by him to be entitled to refuse to specifically perform the agreement dated 2 nd March, 2006. Hence, the following issues arise upon the disputed facts between the parties:- I S S U E S 1. Whether the MOU dated 7th April, 2006 under Serial Nos.159017 (franking No.09677) mentioned the additional amount of payment for Rs.8.5 lakhs and later Rs.7.5 lakhs requiring the agreement to be changed and re-typed by the Defendant as averred in paragraph Nos.17 and 18 of the written statement. 2. Whether the Plaintiff agreed to pay Rs.7.5 lakhs cash 16 component as averred in paragraph 19 of the written statement. 3. Whether the Plaintiff is entitled to specific performance of the agreement dated 2nd March, 2006. 4. What relief, if any, is Plaintiff is entitled to? 25. Both the parties shall file their respective affidavits of documents within 4 weeks. Both the parties shall be entitled to take inspection of the documents impounded and directed to be kept in the sealed cover with the Prothonotary and Sr. Master of this Court. The inspection, if any, required shall be offered by the Prothonotary and Sr. Master in her presence, after which the documents shall be resealed and kept as aforesaid. 26. The Defendant has the Right to Begin uner Order XVIII Rule 1 of the C.P.C. Hence the Defendant shall file his affidavit of examination- in-chief first. 27. Admissibility of the documents, if any, relied upon by the Defendant shall be considered by the Court after the affidavit of examination- in-chief is filed. 17 28. Suit to be on board on 15 th December, 2008. (SMT. ROSHAN DALVI, J.)