1 nms736-11 vai IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.736 OF 2011 IN SUIT NO.552 OF 2002 Laxman K. Agarwal ....Plaintiff V/s. Bridget Souto & Anr. ....Defendants Mr.Sailesh Shah, Senior Counsel with Mr.Munir Merchant, Ms.Mrunalini Panchal and Ms.Priyanka Master i/b Munir Merchant for the Plaintiff. Mr.Armin Wandrewala with Mr.Akshay Vani for Defendant No.1. CORAM : S.J. VAZIFDAR, J. DATE : 18TH OCTOBER, 2011. P.C. :- 1. This is a suit for specific performance of an agreement for sale of a flat by defendant No.1 to the plaintiff dated 16.8.2010. Defendant No.2 is the society in which the suit flat is situated. The agreement was admittedly signed by defendant No.1. The question is whether defendant No.1 agreed to sell her 2/3rd share in the flat for the consideration stipulated in the agreement or whether the price stipulated in the agreement was for the entire flat. 2. The flat admeasures 1561 sq. ft. carpet area and is located in a prime area in the city. The consideration is Rs.7,12,00,000/-. The 2 nms736-11 plaintiff relies upon clauses 6, 7, 8 and 13, which read as under :- 6. The Vendor doth hereby declare and covenant with the Purchaser that she shall ensure that the said premises is free from all encumbrances of any nature whatsoever and that the Vendor has full right, title and interest in the said premises and has full and absolute right and authority to assign and transfer the whole entire interest in the said flat in the Society and the said shares in respect thereof to the Purchaser. 7. The vendor agrees to indemnify and hereby indemnifies the purchaser for any claim and/or demand in respect of the said flat by any third party or by any brother or sisters of the Vendor including of Mrs. Monica Nazareth who has filed various litigations out of which Testamentary Suit No. 99 of 2000 is pending in the High Court and for cost, charges and expenses which the purchaser may have to incur in dealing with such claim and/or demand. Any such claim if any shall be satisfied and met out by the Vendor from the sale price before the completion of the sale and the Purchaser shall not be liable for any further claim. 8. The Vendor has represented to the Purchaser :- a. that the Vendor has paid all the dues and outgoings in respect of the said premises up-to-date. b. that the said premises is free from all encumbrances and claims whatsoever of any nature. c. that the said premises belongs to the Vendor absolutely and that no other person or persons have any right, title or interest whatsoever therein by way of sale, gift, exchange, inheritance, lease, lien or otherwise in the said shares / said premises. d. that notwithstanding anything herein contained, any act, deed, matter or thing of whatsoever nature done by the Vendor or any person or persons lawfully or equitably claiming by from through or in trust for her, the Vendor has in herself full right, power and absolute authority to sell and / or transfer to the Purchaser the said premises and all her right, title and interest in the said Society and that the Vendor have 3 nms736-11 not done or committed or omitted to do any act, deed, matter or thing whereby the ownership, possession and/or occupation of the said premises by the Vendor may be rendered illegal and / or unauthorized for any reason or on any account whatsoever. e. That the Vendor shall carry on and take all necessary actions as required including ensuring that the Shares Certificate is duly transferred in her name by the Society and an NOC is obtained and handed over to the Purchaser before the completion of the sale. f. that the description as mentioned herein of the said premises as represented by the Vendor is to the best of her knowledge true and correct and the purchaser shall not be liable in any manner to the vendor or become liable to pay any additional amount in respect of the same if the actual description does not match with description as represented by the vendor and mentioned herein. g. that the Vendor shall obtain the necessary No Objection Certificate from the said Society for transfer, sale of the interest of the Vendor in the said Society, as well as the right, title and interest of the Vendor in the said premises as herein contained to the Purchaser and also to the admission of the Purchaser to the membership of the said Society in place and instead of the Vendor and when the sale herein is completed by delivering the vacant and peaceful possession of the said premises to the Purchaser. h. that on payment of the full purchase price herein reserved, the Purchasers shall be entitled to the vacant and peaceful possession of the said premises as absolute and exclusive owner thereof. 13. The Vendor agrees that she shall give a marketable title to the Purchaser and take all steps to ensure the same and to ensure that the Purchaser gets a clear title of the said Flat. “ 3. The above clauses do place the responsibility of obtaining the consent of all other claimants to the flat on defendant No.1. The 4 nms736-11 clauses also indicate that defendant No.1 represented that she had full right, title and interest in the premises. However, the agreement must be read as a whole. So read, it is clear that defendant No.1 has only a 2/3rd share in the premises and that she informed the plaintiff about the same. 4. That the plaintiff was aware of the claim by third parties to the flat is ex-facie clear from a reading of the agreement for sale as a whole. The recitals trace the title from the original owner even prior to the year 1954 and state the following facts. The original owners sold the flat to the mother of defendant No.1 Mrs.Adriana Souto. The said Mrs.Adriana Souto is the mother of defendant No.1 one Ms.Beatriz Souto and Ms.Monica Souto. The recital further states that the names of the children of the said Mrs.Adriana Souto were wrongly included in the share certificate and that an application was made to the society for deletion of their names therefrom ; the society however, did not effect the change in view of an order of injunction dated 24.12.1997 passed by the Co-operative Court ; the Deputy Registrar passed an order declaring the said Mrs.Adriana Souto to be the only member of the society and directed the society to recast the records of the society and the share certificate accordingly. Thereafter, the said Mrs.Adriana Souto and her children entered into a family arrangement / agreement on 6.11.1999 and 17.11.1999 whereby the children agreed that their mother was the absolute, sole and exclusive owner of the flat and that 5 nms736-11 none of them had any right therein. The recitals then state that the said Mrs.Adriana Souto died on 18.9.1998 leaving behind a will dated 26.4.1996 whereby she bequeathed the said flat to her children Anthony Souto and defendant No.1. The said Anthony Souto died intestate on 9.4.2008. The share certificate however remained in the name of the first defendant’s mother. The first defendant’s sister Ms.Monika Souto had filed proceedings before various Courts against defendant No.1 including testamentary suit, which is pending in this Court. 5. The above recitals establish clearly that the first defendant was not and is not the sole owner of the flat and that the plaintiff was aware of the same. Defendant No.1 and her deceased brother Anthony Souto had a 50% share each in the flat. Anthony Souto having died intestate, his share devolved upon his heirs including the first defendant. Accordingly defendant No.1 had a 66.67% share in the flat. 6. Curiously the above recitals are followed by a recital to the effect that defendant No.1 “is now seized and fully possessed of and is otherwise sufficiently entitled to the said flat in the building of the said Society.” This recital is an erroneous conclusion of all the facts disclosed in the previous recitals. The agreement was admittedly prepared by the plaintiff’s advocate. 7. This recital is however followed by the following recital :- “AND WHEREAS the Vendor herein has agreed to sell and 6 nms736-11 transfer the said flat and the Purchaser has agreed to acquire all right, title and interest of the Vendor in the said flat and the said shares with all legal consequences including the right of occupation of the said premises in the said building of the said society including the Vendors right, title and interest in the said premises for a total consideration of Rs.7,12,00,000/- (Rupees Seven Crore and Twelve Lakhs only.)” This recital read with the other recitals makes it clear that the consideration was only in respect of the first defendant’s share in the flat. Moreover clause 1 provides that defendant No.1 had agreed to sell to the plaintiff “all the right, title and interest of the Vendor’s in the said flat.” Read with the recitals, this would prima-facie indicate that defendant No.1 had only agreed to sell her share in the said flat. This is obvious from the fact that the recitals made it clear that the plaintiff had only a share in the flat and was not entitled to the entire flat. 8. The plaintiff however, places strong reliance upon the clauses set out earlier. The said clauses certainly cast an obligation on defendant No.1 to ensure that the flat is free from all encumbrances and that defendant No.1 contended that she is entitled to sell “the whole entire interest in the said flat” to the plaintiff. Defendant No.1 has also indemnified the plaintiff for any claim and/or demand in respect of the flat by any third party including her siblings. The recitals however ought to have made it clear to the plaintiff who had the benefit of legal advice that defendant No.1 did not have full and clear title to the flat. 7 nms736-11 9. The first defendant’s case is that draft agreements were exchanged between the parties on earlier occasions upon which she had made certain alterations. Defendant No.1 has produced copies of the same along with her affidavit in reply. Against many of the above clauses, defendant No.1 had affixed a “X” mark. Her doing so, would also be logical in view of the fact that she did not have exclusive title to the flat. She has contended in her affidavit in reply that she did not have any legal assistance and relied upon the plaintiff’s advocate and that despite her alterations and suggestions to the draft agreement, some of the clauses were retained in the final draft on the plaintiff’s representation that it was necessary to have the agreement in that form to enable the plaintiff to work out the matter with the second defendant. 10. I am not inclined to reject this contention in view inter-alia of the recitals which indicate clearly that defendant No.1 did not have full title to the flat, the alterations indicated by the plaintiff on the earlier drafts and the fact that defendant No.1 had no legal assistance. Despite the same, had the matter rested there, I may have granted an injunction restraining defendant No.1 from selling the premises allowing her however to give the same out on leave and licence basis. Such an order would have met the ends of justice for a variety of reason. Firstly, defendant No.1 does not appear to be residing in the flat. Her financial requirements would have been met by the compensation received by her upon giving the flat out on leave and 8 nms736-11 licence. 11. However, in the facts of this case and in view of the stand taken by the plaintiff, it is not possible to pass any order. Admittedly, the third parties have raised a claim in respect of the flat. Admittedly again the plaintiff was aware of the same even before he entered into the agreement. The third parties have not been impleaded. The only relief that can be granted by the Court qua the flat can be in respect of the plaintiff’s share in the property. An order appointing a Court Receiver would affect the rights of the third parties, who are not before the Court. 12. It is difficult, if not impossible, to grant any reliefs for specific performance in any form in respect of the flat in view of the stand taken by the plaintiff. This is so, even assuming that the plaintiff’s case is entirely correct and that the agreement is enforceable against defendant No.1. I will assume that defendant No.1 is bound and liable to ensure a marketable title in respect of the entire flat. She admittedly even as on date, does not have a marketable title to the entire flat. The Court can, at the highest, compel her to try and settle the matter with the other co-owner. The Court in any event, cannot compel the co- owners to do so. A decree therefore, directing defendant No.1 to obtain the consent of the other co-owner to relinquish their share in the flat would be futile and cannot be passed. There is no application under section 12 of the Specific 9 nms736-11 Performance Act. In fact after taking instructions from the plaintiff, more than once, Mr.Shah made a statement that the plaintiff would not be interested in paying even 2/3rd of the consideration stipulated in the agreement to defendant No.1 for acquiring her 2/3rd share in the flat. The plaintiff in other words insists upon being put in possession of the flat as a sole owner thereof on the payment of the consideration stipulated in the agreement. The plaintiff does not desire to have his rights implemented in any other manner. Thus even at the final hearing of the suit, no reliefs qua the flat can be granted. I hasten to add that defendant No.1 also does not agree to accept only 2/3rd of the consideration for assigning/transferring her undivided share in the flat but that is a different matter. In these circumstances, it would be impossible for the Court at the final hearing of the suit to grant any reliefs to the plaintiff. 13. The agreement was entered into in August, 2010. The alleged breach thereof took place only a few months later by defendant No.1 contending that she had agreed to sell only her share in the flat for the entire consideration mentioned in the agreement. Considering the above circumstances, this is a fit case where the plaintiff must be relegated to a claim for damages being the difference in the price agreed upon between the parties under the said agreement and the market price as on the date of the breach. 14. There is therefore, no warrant for passing any interlocutory 10 nms736-11 orders in respect of the flat which would affect the rights of defendant No.1, a senior citizen. Such an order would also affect the third parties, who are not before the Court and who are also senior citizens. 15. In the circumstances, the notice of motion is dismissed. The interim order shall however continue upto and including 30.11.2011.