1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION’ NOTICE OF MOTION NO. 3996 OF 2007 IN SUIT NO. 2954 OF 2007 Control Print (India) Limited. .. Plaintiff Vs 1. M/s. Kaysons Cable Industries & 2 ors. .. Defendants Mr. Pravin K. Samdani, senior counsel with Mr. Neville Mukherjee i/b Wadia Ghandy & Co. for the plaintiff. Mr. Pravin Patel for the defendants No.1 to 3. CORAM: S.J. VAZIFDAR, J. DATED : 1ST DECEMBER, 2009 P.C. : The suit is filed for specific performance of an agreement for sale dated 6th June, 2006 entered into between the plaintiffs and the defendants. By the said agreement, the defendants agreed to sell to the plaintiffs, an industrial gala for a consideration of Rs.96,00,000/- and on the terms and conditions stated therein. Part-payment of Rs.7,00,000/- was made by 31st 2 August, 2006. 2. The plaintiff, by it’s letter dated 26th April, 2007, requested the defendants to complete the sale. The defendants, however, by their letter dated 4th May, 2007, terminated the agreement. 3. The only defence is that the plaintiff had failed and neglected to pay an amount of Rs.13,00,000/- to the society in which the premises are situated. Under clause 2 of the said agreement, a sum of Rs.2,50,001/- was payable as earnest money upon the execution thereof. Under clause 2(b), out of the balance consideration, the plaintiff was to pay directly to the society, the outstanding dues of the defendants to the tune of “approximately Rs.13 lacs”. In other words, the amount payable by the plaintiffs to the society was not crystallized in the agreement. It is important to note that the defendants did not, at any stage prior to terminating the agreement, call upon the plaintiffs to pay any sum of money under clause 2(b) to the society. The defendants did not even contend with the plaintiffs that the outstanding dues stood crystallized. Prima facie, therefore, the termination of the agreement on the ground that the plaintiffs had committed a breach of clause 2(b) is not sustainable. 3 4. It was contended on behalf of the defendants that the property has been mortgaged to Centurion Bank of Punjab Limited. The mortgage cannot be affected by the suit agreement unless the plaintiffs adopt any proceedings in respect thereof. It is necessary, however, to protect the plaintiffs rights in respect of the property including by ensuring that the compensation receivable by the defendants under a leave and licence agreement in respect of the suit property is appropriated, in the first instance, towards paying the mortgage dues. 5. In the circumstances, Notice of Motion is disposed of by the following order:- (i) Pending hearing and final disposal of the suit, the defendants shall not alienate, encumber, part with possession of or create any third party right, title and/or interest in, to, upon or in respect of the suit property, except as stated below. (ii) The defendants shall pay over the compensation received under the leave and licence agreement to the said mortgagee towards 4 payment of the mortgage dues. (iii) The defendants shall be entitled to enter into a fresh leave and licence agreement, subject to the licencee filing an Affidavit in this court agreeing and undertaking not to claim any rights in respect of the said property except as a licencee. The compensation receivable under any fresh leave and licence agreement shall also be appropriated, in the first instance, towards repayment of the said mortgage dues. (iv) In the event of the mortgagee’s dues being paid up and the mortgage being redeemed, liberty to the defendants to apply to enter into a fresh leave and licence agreement. It would be open to both the parties to raise all contentions regarding the terms and conditions on which the same may be permitted. (v) The draft of any proposed leave and licence agreement shall be forwarded by the defendants’ Advocates to the plaintiffs’ Advocates atleast one week before the finalisation thereof. Similarly, the undertaking to be filed by the licencee shall also be furnished to the 5 plaintiffs’ Advocates simultaneously. 6. Notice of Motion, accordingly, disposed of.