*1* ao.726.10.24.sxw kps IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION APPEAL FROM ORDER NO.726 OF 2010 WITH CIVIL APPLICATION NO.917 OF 2010 M/s Mahant Builders & Land Developers and others.. ..Appellants -versus- Dilip Premji Chheda and others. ..Respondents ............ Mr.P.K.Dhakephalkar, Senior Advocate i/by Mr.Rahul Singh, for the Appellants/ Defendant Nos.25 to 27. Mr.G.S.Godbole i/by M/s Pramod Kumar & Company, for the Respondent No.1/Plaintiff. ............ CORAM : S.C.DHARMADHIKARI, J. Date : 11th December, 2012. P.C.: 1 Heard. Admit. 2 Since the contesting parties are before the Court and even heard extensively, with their consent the Appeal is heard finally. 3 This Appeal challenges the interim order passed by the Trial Court below Exhibit-5 in Special Civil Suit No.536/2009 dated 30.04.2010. 4 The Appellants before me are original Defendant Nos.25 to 27. The Respondent No.1 before me is the original Plaintiff. 5 The suit was laid in the Trial Court by the Respondent No.1/ Plaintiff seeking the following reliefs:- “(a) It be ordered, decreed and declared that the Memorandum of Understanding dated 16th August 2005 executed by the Defendant Nos.1 to 8 in favour of the *2* ao.726.10.24.sxw Defendant Nos.25 to 27, the agreements for development dated 22nd March 2007 and 16th April 2007 executed by the Defendant Nos.1 to 24 or some of them in favour of the Defendant Nos.25 to 27 and the suit agreement viz. the Memorandum of Unerstanding dated 5th April 2006 executed by the Defendant Nos.25 to 27 in favour of the Plaintiff in respect of the suit property viz. all those pieces and parcels of following agricultural lands, all lying, being and situate at Revenue Village Navghar, Bhayandar, Taluka and District Thane, Registration Sub-District of Bhayandar and District of Thane and now within the limits of Mira Bhayandar Municipal Corporation:- Sr.No. Old Survey No. New Survey No. Hissa No. Area (H-R-P) 1 295 178 8 0-07-6 2 303 179 2 0-29-6 3 303 179 3 0-18-5 4 303 179 4 0-00-8 5 303 179 8 0-19-5 are legal, valid, enforceable in favour of the Plaintiff and binding upon the Defendants; (b) The Defendants may be jointly and each severally ordered, decreed and directed to specifically perform the Memorandum of Understanding dated 16th August 2005, the agreement for development dated 22nd March 2007 and 16th April 2007 and the suit agreement viz. the Memorandum of Understanding dated 5th April 2006 in respect of the suit property viz. all those pieces and parcels of following agricultural lands, all lying, being and situate at Revenue Village Navghar, Bhayandar, Taluka and District Thane, Registration Sub District of Bhayandar and District of Thane and now within the limits of Mira Bhayandar Municipal Corporation:- Sr.No. Old Survey No. New Survey No. Hissa No. Area (H-R-P) 1 295 178 8 0-07-6 2 303 179 2 0-29-6 *3* ao.726.10.24.sxw 3 303 179 3 0-18-5 4 303 179 4 0-00-8 5 303 179 8 0-19-5 in favour of the Plaintiff and carry out and comply with all of the obligations of the Defendants thereunder and finally to convey their rights, titles, interests in the suit property to and in favour of the Plaintiff; (c) In the event of failure on the part of the Defendants to specifically perform the Memorandum of Understanding dated 16th August, 2005, the agreements for development dated 22nd March 2007 and 16th April 2007 and the suit agreement in favour of the Plaintiff, a fit and proper person be appointed as Court Commissioner for execution of conveyance of the suit property in favour of the Plaintiff and for doing all other necessary and expedient acts, for and on behalf of the Defendants; (d) In the alternative to prayer clauses (a) to (c) hereof, the defendants may be ordered, decreed and directed to pay to the Plaintiff a sum of Rs.11,00,00,000/- (Rupees Eleven Crores only) as and by way of damages, together with further interest @ 18% p.a. on the said amount of Rs.11,00,00,000/- (Rupees Eleven Crores only) from the date of the suit till realization. (e) The Defendants, their agents, servants or anyone claiming through or under them may be restrained by an appropriate order and decree of permanent perpetual injunction restraining them either from disturbing possession of the Plaintiff over the suit property and/or from dispossessing the Plaintiff from over the suit property and/or from creating third party interests in respect of the suit property and/or from obstructing construction and development activities intended to be undertaken by the Plaintiff in or upon the suit property and/or from acting in any other manner detrimental or prejudicial to the valuable rights of the Plaintiff in respect of the suit property and every party thereof; (f) Interim and ad-interim reliefs in terms of prayer clause (e) above be granted; (g) Cost of the suit be provided for; *4* ao.726.10.24.sxw (h) Such other and further reliefs be granted to the Plaintiff as the nature and circumstances of the case may require and to which this Hon'ble Court may deem fit and grant.” 6 What these reliefs denote is that there is a Memorandum of Understanding (MoU) dated 16.08.2005 executed by the Defendant Nos.1 to 8 in favour of the present Appellants (Defendant Nos.25 to 27). Then there are agreements for development dated 22.03.2007 and 16.04.2007 executed by the Defendant Nos.1 to 24 or some of them in favour of the present Appellants (Defendant Nos.25 to 27) and then there is reference to the suit agreement which is MoU dated 05.04.2006 executed by the Appellants (Defendant Nos.25 to 27) in favour of the Respondent No.1 (Original Plaintiff). 7 The original Plaintiff in such suit stated that he is in business of purchase, acquisition and development of the landed properties and construction of buildings thereon in Mumbai and Thane districts. One Yashwant Sowar Patil was the agricultural tenant and as such in possession, occupation, enjoyment and cultivation of the suit land. The original Defendant Nos.1 to 24 are stated to be claiming through said Yashwant Sowar Patil. The plaint recites that these are pieces and parcels of the agricultural lands. 8 After pointing out as to how upon death of Yashwant Patil, he left behind him the Defendant Nos.1 to 6 as legal heirs according to the Law of Succession, it is stated that the Defendant Nos.7 to 24 are the other family members of the Defendant Nos.1 to 6 and as such heirs of the deceased Yashwant Patil. It is claim of the Plaintiff that the Defendant Nos.1 to 6 are well and sufficiently entitled to and as such in possession, occupation and enjoyment of the suit property as the true and lawful owners thereof. The Defendant No.1 gave a statement before the Revenue *5* ao.726.10.24.sxw Authorities in or about 2004 and requested the Revenue Authorities to insert the names of the Defendant Nos.7 and 8 as the co-owners of the suit property and other landed properties. The Mutation Entry No.560 was accordingly entered and certified, by virtue of which the names of the Defendant Nos.7 and 8 were entered in the Record of Rights along with the Defendant Nos.1 to 6. 9 Then it is stated that the Defendant Nos.1 to 8 were desirous of selling, transferring and alienating the suit property and other landed properties and/or developing the same through the suitable developer. On knowing their intention, the present Appellants (Defendant Nos.25 to 27) approached them and offered to acquire the suit property and therefore, a MoU dated 16.04.2005 was executed and that the same is referred to in paragraph 5 of the plaint as dated 16.04.2005 and in prayer clauses that I have reproduced above it is stated to be 16.08.2005. Be that as it may, this is styled as MoU and what the Plaintiff recites in the plaint itself is that there is an agreement between the Defendant Nos.1 to 8 and Defendant Nos.25 to 27 whereunder the Defendant Nos.1 to 8 agreed to sell, transfer and alienate the suit property in favour of the Defendant Nos.25 to 27 on the terms and conditions more particularly mentioned in that MoU. Surprisingly, it is stated that at the time of execution of the MoU dated 16.04.2005, the Defendant Nos.25 to 27 were not aware that the major portion of the suit property and other landed property has been declared as surplus by the competent authority under the Urban Land (Ceiling and Regulation) Act, 1976 and the name of the State of Maharashtra has been entered into and recorded in the Record of Rights as owners vide Mutation Entry No.596. The Defendant Nos.25 to 27 later on came to know about the fact that a major portion having already been declared as surplus. The Plaintiff stated that the possession of the suit property was *6* ao.726.10.24.sxw with the Defendant Nos.1 to 8 even after the certification of Mutation Entry No.596. In fact the State of Maharashtra has not taken any effective steps to recover possession of the surplus land from the Defendant Nos.1 to 8. Therefore, there were negotiations and deliberations as between the Defendant Nos.1 to 8 and the Defendant Nos.25 to 27 afresh. Eventually, the Defendant Nos.1 to 8 and the Defendant Nos.25 to 27executed one more MoU dated 16.08.2005 cancelling earlier MoU dated 16.04.2005. Thus, there is subsequent MoU whereunder earlier MoU stood cancelled or altered by consensus and that is what is pleading in paragraph 6 of the plaint. The responsibility of releasing the suit property from the clutches of ULC authorities was shouldered by the Defendant Nos.25 to 27. There are also ancillary and incidental documents executed by the Defendant Nos.1 to 8 in favour of the Defendant Nos.25 to 27 authorizing them to do all acts necessary for releasing the portion of the suit property from the clutches of ULC authorities. That MoU is styled as treaty dated 16.08.2005. 10 Even after acquiring the right, title, interest and possession, according to the Plaintiff, the Defendant Nos.25 to 27 did precious little either in the matter of development or in the matter of releasing the portion of the suit property from the ULC authorities. That is how the Defendant Nos.25 to 27 approached the Plaintiff and represented to him that they were seized and possessed of or otherwise well and sufficiently entitled to all rights or are in possession of the suit property and also entitled to further transfer, alienate and assign in favour of third party. Relying upon all this and some negotiations that the MoU dated 05.04.2006 styled as Suit Agreement came to be executed whereunder the consideration was determined at Rs.3,58,81,870/-. 11 The averments are, therefore, that there is concluded contract *7* ao.726.10.24.sxw in terms of the suit agreement. The suit agreement is referred to as the agreement of 05.04.2006, but that is based on the MoU dated 16.08.2005 as between the Defendant Nos.1 to 8 and the Defendant Nos.25 to 27. 12 Rs.60 lacs are claimed to have been paid and thereafter what the pleading is that the Appellants (Defendant Nos.25 to 27) are stated to have assured that attempts will be made to obtain N.A. permission and sale permission from the concerned authorities and equally take steps to release the land. What paragraph No.8 recites is that after payment of Rs.60 lacs, the Defendant Nos.25 to 27 contemporaneously handed over vacant, physical and peaceful possession of the suit property to the Plaintiff in part performance of the contract. 13 Thereafter, what is stated and or averred is that the Plaintiff has protected the suit property by engaging security personnel. He has also approached the owners of the adjacent lands for obtaining permanent right of way for ingress and egress and obviously for the purpose of development. He has secured right of way and thus, taken some concrete steps. 14 However, the Plaintiff accuses the Defendant Nos.25 to 27 of doing precious little in the matter of obtaining permissions from the various authorities and alleges failure to comply with their obligation under the suit agreement. There is correspondence on this issue and later on, what the Plaintiff states in paragraphs 10 to 14 of the plaint is issuance of certain public notices by persons interested in the suit property. However, the correspondence does not rest there because on 06.11.2007 a letter was addressed by the Plaintiff and reference thereto is made in paragraph 14. A reply thereto was given for the first time, according to the Plaintiff, on 28.12.2007 by the Defendant Nos.25 to 27. They stated that the agreement dated 05.04.2006 has been cancelled by *8* ao.726.10.24.sxw the termination notice dated 12.07.2006. The Plaintiff pleads no knowledge of such termination. However, while reiterating that the agreement is binding and subsisting, in paragraph 17 it is stated that the Plaintiff came to know from his well wishers that the Defendant Nos.1 to 24 or some of them have entered into certain agreements for development dated 22.03.2007 and 16.04.2007 in respect of the suit property in favour of the Defendants Nos.25 to 27. Once the Appellants (Defendant Nos.25 to 27) have executed a MoU which is the suit agreement in favour of the Plaintiff, that means the Plaintiff has acquired all rights, title and interest in the suit property on the basis of the suit agreement and as such in possession, occupation and enjoyment of the suit property. 15 Therefore, the Plaintiff states that not the Appellants herein, but he alone is entitled to the suit property and benefits of the MoU which is between the Defendants inter-se. In paragraphs 18 and 19 of the plaint, this is what is stated:- “18. Sometimes in the last week of August, 2008, the Plaintiff learnt from the reliable sources that the surplus vacant portion of the suit property which has been acquired by the Government of Maharashtra under ULC Act, is likely to be released in the near future from the clutches of ULC Act, in view of the various orders passed by the Hon'ble High Court of Judicature at Mumbai. The Plaintiff states that the property at Sr.No.2 bearing old Survey No.303 new Survey No.179 Hissa No.2 admeasuring 0H-29R-6P of village Navghar, Bhayandar, Taluka and District Thane was not under acquisition under ULC Act and hence was always available for development. The Plaintiff states that the possibility of release of the suit property from the clutches of ULC Act, has paved a way for smooth development of the entire suit property by the Plaintiff. 19. Upon flashing of a news in the market about likelihood of the suit property getting released from the clutches of ULC Act, the Plaintiff further learnt from the reliable sources that the Defendants in collusion with each other *9* ao.726.10.24.sxw are in the process of creating third party interests in respect of the suit property and cause prejudice to the rights of the Plaintiff qua the suit property. Sometimes in the month of September 2008, the Plaintiff was shocked to come across an order dated 5th September 2008 passed by the Collector, Thane, whereby the Collector, Thane was pleased to direct the Tahasildar, Thane to record the name of the Estate Investment Company Pvt.Ltd. as the land holder/ superior holder in Kabjedar Column in 7/12 extracts in respect of various lands in village Mira, Bhayandar, etc.. As per knowledge of the Plaintiff, the said order is still under challenge in the appropriate proceedings before the Hon'ble High Court of Judicature at Mumbai and that there is a likelihood of the dispute being resolved in the Hon'ble High Court. The order passed by the Collector, Thane has yet not attained finality. In the premises, the Plaintiff has every right to claim specific performance of the suit agreement and of the Memorandum of Understanding dated 16th August, 2005 and of the agreements for development dated 22nd March 2007 and 16th April 2007 from all the Defendants.” 16 It is in such suit that the Plaintiff applied for interim relief and what the contesting Defendants brought to the notice of the Court below is that all the Defendants have never entered into an agreement with the Plaintiff. There is no privity of contract between the Plaintiff and the Defendant Nos.1 to 24 and therefore, the Plaintiff is not entitled for any decree of specific performance. Then it is stated that the contents of the plaint are contradictory and confusing. There is incorrect statement that the Defendant Nos.1 to 8 have handed over vacant, physical and peaceful possession of the suit property unto and in favour of the Defendant Nos.25 to 27 in part performance of the contract. Therefore, it is denied that vacant, physical and peaceful possession of the suit property has been handed over to the Plaintiff in part performance by the *10* ao.726.10.24.sxw Defendant Nos.25 to 27. It is denied that the Plaintiff paid and the Defendant Nos.25 to 27 received a huge consideration of Rs.60 lacs as earnest money. It is stated that in fact the Defendant Nos.25 to 27 have received only Rs.34 lacs as part consideration amount in respect of the suit property and the balance amount of Rs.26 lacs was in respect of a dealing of certain other properties with Mr.Ranawat & Mr. Dinesh Chheda and Mr.Morarji Chheda and those deals took place through the Defendant Nos.25 to 27. Therefore, there is attempt to club all these deals and to pass of the sum received towards consideration under the suit agreement. 17 All these allegations and counter allegations have been reiterated before the learned Judge and the learned Judge while allowing the application, has passed the following interim order pending the suit:- “1) Application is partly allowed. 2) Defendants, their agents, servants or any other person on behalf of the Defendants are hereby restrained from creating third party interest over the suit property and disturbing possession of the Plaintiff over the suit property till final disposal of the suit and both the parties to maintain status-quo. 3) The relief of injunction restraining the Defendants from interfering with the construction activities is hereby rejected. 4) Parties to bear their respective costs.” 18 It is this order which is challenged in the present Appeal. 19 Mr.Dhakephalkar, learned Senior Counsel appearing for the Appellants/ Defendant Nos.25 to 27, has taken me through the suit agreement/MoU dated 05.04.2006 which is between M/s Mahant Builders and Land Developers, on one part and the Plaintiff (Dilip Premji Chheda) on the other part. M/s Mahant Builders and Land Developers is a partnership firm and of which Mr.Sumersingh Narayansingh Champavat and Mr.Bhagirathbhai Govardhandas Kumawat are partners. They are *11* ao.726.10.24.sxw styled as Vendors. The Plaintiff is styled as Purchaser and the owners are the Patils. 20 Mr.Dhakephalkar has placed reliance on clauses 8 and 9 of this agreement, to submit that unless and until the obligations in clause 9 are complied with by the Vendors, there is no question of delivery of possession of the suit property with a right to the Purchaser to affix his name board and to engage the security personnel on the suit property for protecting it from encroachment of any nature. It is submitted by Mr.Dhakephalkar that the clause 12 of this agreement and subsequent clauses would denote that something more was required to be done and it is not as if clause 15 can be seen as an isolated covenant. There, it is stated that the Vendors do hereby jointly and severally agree and declare that upon execution of these presents, the Vendors shall put to the Purchaser into the vacant, peaceful and physical possession of the suit property. Upon accepting possession of the said property from the Vendors, the Purchaser shall be entitled to affix and erect his sign board and engage the security personnel for protecting the said property from trespass and encroachment and he shall also be entitled to issue a paper notice in the local news paper for inviting objections from the public at large to the proposed deal in respect of the suit property. 21 Mr.Dhakephalkar has submitted that there was no question of any physical possession being handed over much less as claimed because the claim of physical possession is made for the first time by letter dated 06.11.2007. Prior thereto, there is correspondence and letter dated 29.11.2006 addressed by the Plaintiff himself and he does not state that physical possession was handed over to him. In fact he relies upon recitals in the agreement to the effect that the duties and obligations of the Vendors have to be carried out as laid down therein. Mr.Dhakephalkar, *12* ao.726.10.24.sxw therefore, submits that in the light of these doubtful and questionable agreements, the learned Judge should not have passed an order on the footing that physical possession of the property is with the Plaintiff. The finding that after the deal the possession of the land came to the Plaintiff and he kept security guards and receipt to that effect is produced and equally, plea that the Plaintiff had held negotiations with the adjacent land owners to acquire a right of way is enough to conclude prima facie that the Plaintiff is in possession of the suit property, is erroneous inasmuch as the Written Statement and above facts have been ignored by the learned Judge. If physical possession is not with the Defendant Nos.25 to 27 and possession is not taken from the owners, namely, Patils, then, the learned Judge should not have held that prima facie case to this extent is made out. There is no question of any right, title and interest in the property in favour of the Plaintiff. In fact everything is uncertain and depends upon the agreements inter-se between the Defendants. If that is the admitted foundation on which the plaint proceeds, then, injunction as wide as in clause (2) of the impugned order could not have been issued. 22 On the other hand, Mr.Godbole, learned counsel appearing on behalf of the Respondent No.1/ Plaintiff, relies on the pleadings and clause 22 of the agreement dated 05.04.2006 in which the parties agreed that notwithstanding anything contained in any of the foregoing clauses and notwithstanding the fact that an Agreement for Sale cum Development shall be executed at a future date, the parties agreed that all the material terms and conditions of the agreement have already been agreed upon between the parties and that a concluded contract has already come into existence. According to Mr.Godbole, the MoU is a concluded contract. In these circumstances this is not a case where the Plaintiff's pleadings could have been brushed aside. On the other hand, *13* ao.726.10.24.sxw the order of the learned Judge is in consonance with the documents placed before him. The learned Judge has not committed any error or perversity while protecting the physical possession of the Plaintiff. For these reasons, the Appeal be dismissed. 23 I have already narrated the case of the Plaintiff. After having perused the plaint carefully and equally the agreement on which heavy reliance is placed by both sides, with the able assistance of the learned counsel, I am of the opinion that the learned Judge committed an error in granting injunction to protect the alleged physical possession of the Plaintiff. One can understand in such cases, an injunction to restrain creating of third party rights or direction to parties to maintain status-quo, can be issued. However, to hold that the Plaintiff's possession is established prima facie and therefore, pending the hearing and final disposal of the suit, same deserves protection, was an obvious error. The learned Judge lost sight of the fact that the agreement on which reliance is placed in the suit, namely, dated 05.04.2006 is not as between the Defendant Nos.25 to 27 and the Plaintiff solely. The Plaintiff therein is Purchaser. However, the Plaintiff himself is aware that the ownership rights in the property do not vest in the Defendant Nos.25 to 27. They vest in the Defendant Nos.1 to 24. It is they who had agreed to transfer the rights in favour of the Defendant Nos.25 to 27 and upon