1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE JURISDICTION WRIT WRIT WRIT PETITION PETITION PETITION NO.2709 OF 2008 NO.2709 OF 2008 NO.2709 OF 2008 Neil Constructions and Ors. ...Petitioners. Vs. Mr.Madhav Laxman Ghodake ...Respondent. Shri Nitin Deshpande Advocate for the petitioners. Mr. Sanjay Kshirsagar Advocate for the respondent. CORAM CORAM CORAM : A.A.Sayed, J. : A.A.Sayed, J. : A.A.Sayed, J. Date : October 21, 2008. P.C. 1. Rule; Rule made returnable forthwith and heard finally by consent. 2. This petition is directed against the order dated 7th March, , 2008 passed by the District Judge, Pune in Misc. Civil Appeal No. 5 of 2008 whereby the order of the Trial Court, 2 rejecting the Interim Application of the respondent in Special Civil Suit No. 2070 of 2007 was reversed and the petitioners were restrained from disturbing the peaceful possession of the respondent and from creating any third party interest in respect of the suit plot till the disposal of the suit. 3. The controversy in the matter is with regard to the Development Agreement dated 22.12.2005 between the respondent, who is the owner and the petitioners, who are the developers. Prior to the execution of the Development Agreement, the respondent- owner had agreed with the partner of the petitioners to give the suit property for development under the MOU dated 14.11.2005. Under the Development Agreement, dated 22.12.2005 the petitioners had agreed to pay certain amount to the respondent- owner. The petitioners had also agreed to give built up area of 3500 sq.ft. to the respondent- owner and the construction work was to be completed within 36 months from the date of receipt of physical possession of the suit plot. 4. It appears that certain disputes arose 3 between the parties and the respondent-owner terminated the Development Agreement. According to the petitioners, the Agreement is not a mere development agreement but also creates an interest in the suit property and, therefore, the respondent-owner is not entitled to terminate the agreement. 5. It is the case of the petitioners that in pursuance of the said agreement, they have paid certain amounts to the respondent-owner and they are put in possession of the suit plot and the respondent-owner was also provided alternate accommodation by taking a premises on leave and licence and an irrevocable power of attorney was also executed in their favour, and therefore, now the respondent- owner cannot restrain the petitioners from development of the said plot. 6. The suit and Injunction Application was filed in the Trial Court by the respondent-owner. Upon hearing the Application for injunction, the Trial Court came to the conclusion that the Agreement was not merely a Development Agreement but in the nature of Agreement for Sale of the suit property and that since the petitioners have 4 taken steps in pursuance of the Development Agreement, the injunction Application of the respondent-owner came to be rejected. 7. Upon an Appeal being filed by the respondent-owner against the order of rejection of injunction Application, the Appeal Court by the impugned order set aside the order of the trial court and restrained the petitioners from entering the suit plot and from disturbing the peaceful possession of the respondent-owner and creating any third party interest in respect of the suit plot. The Appeal Court inter alia noted that it was specifically agreed by the parties that the Agreement is not to be treated as partnership or agreement of sale of the suit property and the respondent-owner would execute the sale deed in respect of the flats agreed to be sold by the petitioners to the purchasers and that is why it was clear that it was simply an agreement for development of the plot and it cannot be said that the money paid by the petitioners to the respondent owner was towards part of consideration of sale of suit property. 8. The learned Counsel for the petitioners 5 has laid emphasis on the fact that granting injunction at this stage would amount to decreeing the suit. Relying upon Sections 39 and 202 of the Indian Contract Act, 1872, the Learned Counsel argued that the Agreement is not merely a Development Agreement but creates a right in respect of the suit property and, therefore, the respondent-owner was not entitled to revoke the development agreement. He submitted that various steps have been taken by the petitioners in pursuance of the Agreement and the building plan has also been sanctioned and Commencement Certificate has also been issued and considerable expenses had been incurred and therefore the Development Agreement constitutes an Agreement for Sale. Learned Counsel for the petitioners submitted that the Agreement cannot be terminated by mere notice as an interest has been created under the said agreement in favour of the petitioners. 9. In support of his contentions, the learned Counsel for the petitioners has placed reliance on the decisions in case of (1) BHASKAR (1) BHASKAR (1) BHASKAR ADITYA ADITYA ADITYA VS. SMT MINATI MAJUMAR, reported in AIR VS. SMT MINATI MAJUMAR, reported in AIR VS. SMT MINATI MAJUMAR, reported in AIR 2003 2003 2003 CALCUTTA 178 and (2) VOLITION INVESTMENT CALCUTTA 178 and (2) VOLITION INVESTMENT CALCUTTA 178 and (2) VOLITION INVESTMENT 6 PVT.LTD. PVT.LTD. PVT.LTD. VS. MADHURI JITENDRA MASHROO, reported VS. MADHURI JITENDRA MASHROO, reported VS. MADHURI JITENDRA MASHROO, reported inin in 2003(5) BOM.C.R. 262. 2003(5) BOM.C.R. 262. 2003(5) BOM.C.R. 262. 10. On the other hand, the learned Counsel for the respondent-owner,supporting the impugned order, has placed reliance on the decisions in (1) (1) (1) SAHARA SAHARA SAHARA INDIA COMMERCIAL CORPORATION LTD. VS. INDIA COMMERCIAL CORPORATION LTD. VS. INDIA COMMERCIAL CORPORATION LTD. VS. B. B. B. JEEJEEBHOY VAKHARIA AND ASSOCIATES AND ORS, JEEJEEBHOY VAKHARIA AND ASSOCIATES AND ORS, JEEJEEBHOY VAKHARIA AND ASSOCIATES AND ORS, reported reported reported in 2007 (4) BOM.C.R. 65, (2) BARSES J. in 2007 (4) BOM.C.R. 65, (2) BARSES J. in 2007 (4) BOM.C.R. 65, (2) BARSES J. A. A. A. D’DOUZA VS. MUNICIPAL CORPORATION OF GR. D’DOUZA VS. MUNICIPAL CORPORATION OF GR. D’DOUZA VS. MUNICIPAL CORPORATION OF GR. BRIHAN BRIHAN BRIHAN MUMBAI AND ORS. reported in 2003(4) MUMBAI AND ORS. reported in 2003(4) MUMBAI AND ORS. reported in 2003(4) MH.L.J. MH.L.J. MH.L.J. 451. 451. 451. 11. Having heard the rival contentions of the parties and perusing the material on record, in particular, the Agreement signed by the parties, prima facie, I find that the Agreement is a Development Agreement and it cannot be said that any right has been created in favour of the petitioners. In so far as the contention of the learned Counsel for the petitioners that granting interim injunction at this stage would amount to decreeing the suit, it is to be noted that in the peculiar facts of the present case, such injunction is warranted notwithstanding the fact that it may amount to granting the relief which 7 are prayed in the suit. Merely because certain steps have been taken by the petitioners as developers towards development of the said plot, it would not mean that the respondent-owner is not entitled to interim reliefs. It is relevant to note clause 7 of the Development Agreement which reads as follows :- "7. This Agreement shall not be treated as partnership between the OWNER and the DEVELOPER or an Agreement for Sale of the SAID PROPERTY to DEVELOPERS. The OWNER has given only right to develop the said property as aforesaid" Thus, prima facie, the Agreement being merely an Agreement for Development, the same cannot be enforced. Moreover, I also find that the suit has also been expedited by the Appeal Court. It is further noted that the MOU is executed by a different entity than the petitioners. 12. In the circumstances, I find that the Appeal Court has considered the Development Agreement in its proper perspective and no fault can be found in the impugned order. 8 13. Consequently, the impugned order does not call for interference in exercise of writ jurisdiction by this Court under Article 227 of the Constitution of India. The petition is dismissed with no order as to costs. Rule discharged. 14. It is clarified that the Trial Court shall decide the Suit on its own merits without being influenced by the observations made in this Order. ... [A.A.Sayed, [A.A.Sayed, [A.A.Sayed, J.] J.] J.]